Throughout 1998, social protection was the subject of several major changes, addressing two key areas:
- the adoption of appropriate measures to provide immediate support for the existing social security system;
- measures to deal with unemployment-related problems.
1. Social security
Following a major social debate between the Government and the social partners, measures were adopted with an immediate and far-reaching impact on the existing social security system. The planned regulations are both functional and structural in nature and include measures to support the current system.
The most significant measures are as follows:
- the dual aim of rationalising the Greek social security system and to put the finances of loss-making insurance funds back onto a healthy footing, has led the Government to merge certain insurance funds for self-employed people. This includes the insurance fund for craftsmen and other professionals (TEBE), the storekeepers’ insurance fund (TAE) and the motorists’ pension fund (TSA). These funds have been merged into a single fund, entitled the "insurance organisation for the liberal professions". The membership of the said funds totals 850,000 insured parties and 220,000 pensioners;
- in a bid to reduce health-related costs, a control mechanism has been set up to curb the benefits offered by the health funds. According to 1998 figures, these health benefit costs are estimated to be DR 1 trillion. It is hoped that the introduction of control measures will lead to cost cuts of between 25% and 30%;
- the role of preventive medicine is becoming decisive and mandatory;
- a list containing a fixed number of pharmaceutical products has been established for use by all insurance organisations. Moreover, after 1 October 1998, a single type of prescription enters into application for the supply of medicines which has become mandatory for all insurance funds;
- the exploitation of the tangible and intangible assets of the insurance funds is to be facilitated as from the year 2001, when the insurance funds will be allowed to invest up to 23% of their assets in real estate, shares and other securities quoted on the stock exchange, as well as in mutual funds (compared with the current rate of 20% of their assets);
- the conditions for payment of the survivor’s pension become stricter as of 5 January 1999. The pension will be paid to the surviving spouse unconditionally for an initial period of three years following the decease of the insured party or his/her retirement. After this period, the surviving spouse retains his/her entitlement to the survivor’s pension, providing a certain number of conditions are satisfied (age, employment, other resources, etc.);
- considerable restrictions have been introduced with regard to the employment of pensioners. For pensioners under 55 who start working again, payment of their pension will be suspended. For pensioners continuing to work after the age of 55, the portion of the pension exceeding DR 250,000 per month will be reduced to a level of 70%. The regulations relating to the employment of pensioners will come into force after 1 January 2001;
- for new insured parties (who were insured for the first time after 1.1.93), the minimum pension is increased by 50%. Moreover, measures to simplify administrative procedures and improve relations between the State and insured parties have been adopted in the field of social security;
- as part of the measures to curb tax evasion, there are plans to set up a special contribution control service as part of IKA, at both central government and regional level, endowed with far-reaching powers;
- finally, a new basic scheme for farmers’ insurance was set up on 1 January 1998. This is a purely contributory system which guarantees farmers a level of insurance at least equal to that enjoyed by the urban population.
2. Unemployment
a. As part of the programme "Young people in working life", 50,000 young unemployed people aged between 20 and 27 are due to receive subsidies during the course of 1998 in order to help them to find jobs.
It is planned for 40,000 of these young unemployed people to benefit from a monthly allowance of DR 100,000 to carry out practical training placements to enable them to subsequently take up new jobs in those same companies. The remaining 10,000 young unemployed people will receive an annual allowance of between DR 1,200,000 and 1,600,000 to enable them to set themselves up in business.
The payment of subsidies is planned to last between 18 and 20 months (22 months for regions with a higher unemployment rate). The total sum which it is planned to distribute via this programme during the course of 1998 is DR 108 billion. The programme will also run in 1999 and 2000, and a total of 200,000 young unemployed people will benefit.
b. The long-term unemployed, aged between 28 and 64, will receive subsidies for a period of 16 - 18 months (18 - 20 months in regions with a higher unemployment rate). The amount of the subsidy is the same as for young unemployed people. In regions hit harder by unemployment, the annual subsidy for setting up a business ranges between DR 1,600,000 and 1,800,000.
A total of 8,000 long-term unemployed are due to receive subsidies in 1998, take part in a training placement and then enter new jobs, while 2,000 others will set up their own businesses.
This programme will last three years and is expected to cost a total of DR 20 billion.
c. Special assistance measures have been introduced in order to address the problem of mass redundancies, enabling people who have been made jobless to re-enter the employment market under the aegis of training and work experience programmes.
d. In early May 1998, the first job-promotion centre was inaugurated as part of the organisation of labour. In the coming two years, other such centres will be created in the country’s 52 administrative regions.
The aims of these centres are:
- to match job supply with demand by seeking vacant posts for unemployed people in companies with openings;
- to customise the provision of information to meet the needs of interested unemployed people;
- to monitor the changes taking placing in the local labour market;
- to distribute the "personal employment card" for a variety of purposes, primarily for payment of unemployment benefit and vocational training.
- a recent Law provides for IKA membership for young unemployed people aged under 29 to receive benefits in kind in the case of illness. Not covered are young unemployed people who are insured in their own right, young unemployed people covered as a family member of an insured person or students studying at a Greek or foreign university.
The contributions for these young unemployed people are paid to IKA out of the "employment and vocational training account" (LAEK), which comes under the "Labour Organisation" (OAED). The monthly contribution for each young unemployed person totals 6.45%, calculated on the basis of a fictitious salary under IKA’s fourth insurance class (currently DR 6,600 or ECU 30).
e. Finally, the provisions of EEC Directive 94/33 concerning employment protection measures for young workers under the age of 18 were recently transposed into Greek legislation by a Presidential Decree.