Greece is rolling out five major pension reforms designed to correct longstanding financial inequalities, raise monthly payments, and create new incentives for retirees to remain in the workforce.
The reform package includes an additional increase to primary pensions, a restructuring of the Pensioners Solidarity Contribution, financial protection and restored benefits for widows, and enhanced pension top-ups for working retirees.
Under the plans, primary pension payments are expected to rise by around 4 percent. The potential increase comes as the Bank of Greece revised its economic forecasts for 2026, raising its annual growth projection from 2.2 percent to 2.3 percent and its inflation estimate from 2.7 percent to 3 percent.
Greek authorities are also exploring potential increases to supplementary pensions. Officials indicated that any rise will depend on the financial performance of the supplementary insurance branch of e-EFKA, the National Social Security Fund, and confirmation of a surplus recorded throughout 2024. As the primary social security institution in Greece, e-EFKA oversees pension administration across both public and private sectors.
Overhaul of solidarity contribution tax
A major component of the reform package involves an overhaul of the Pensioners Solidarity Contribution, known locally as EAS. The contribution currently impacts retirees receiving a primary pension above specific income thresholds. In 2025, the deduction applies to primary pensions exceeding 1,434 euros per month, with that threshold scheduled to rise further in coming years as pension brackets adjust alongside general payment increases.
Growing concerns over the long-term effectiveness of the current EAS levy have prompted government planners to consider a radical overhaul of the system. Under the proposed model, the contribution would be split into four proportional brackets, with deductions calculated only on the portion of a pension that exceeds each bracket threshold rather than the total monthly amount.
Under the proposed system, a retiree earning a primary pension of 1,600 euros per month would no longer pay a 3 percent levy on their entire income. Instead, the deduction would apply only to the 166 euro portion between the 1,434 euro threshold and the 1,600 euro total. Officials noted that applying a higher rate to a significantly smaller sum would result in a lower final deduction for many retirees, while a planned cap would ensure no pensioner pays more than under the existing system.
EAS was originally introduced in Greece as a special contribution on higher pension payouts to support the national social security system. Over time, fixed threshold rules meant that routine pension increases pushed some retirees into higher tax brackets, reducing their net income.
Incentives for working pensioners
To encourage older citizens to remain active in the labor market, the reform package introduces specific tax exemptions for working retirees. Under the proposed rules, any additional pension rights accrued through continued employment will not be factored into EAS calculations.
For instance, if a working retiree earns an additional 40 euros per month in pension rights and consequently crosses the 1,434 euro threshold, the extra 40 euros will not be subject to EAS deductions. The mechanism is intended to prevent working pensioners from moving into a higher deduction bracket solely because of income earned through active employment.
Alongside tax exemptions, the government is moving forward with an expanded pension top-up scheme for working pensioners. Currently, working retirees earn an extra rate of approximately 0.77 percent for each additional year of employment, calculated based on salary or contributions for self-employed individuals. Planners are now considering raising that rate to 0.98 percent.
On a monthly salary of 1,000 euros, one year of continued work currently yields an extra pension top-up of around 8 euros per month, which doubles to 16 euros after two years of employment. Under the proposed 0.98 percent rate, the top-up on a 1,000 euro salary would rise to 10 euros per year worked. To activate the increased payout, retirees must formally end their employment, file a declaration with e-EFKA, and submit a request for their pension to be recalculated.
Restoration and protection for widows pensions
Significant changes to widows pensions are scheduled to take effect on August 28, when 8,500 public sector beneficiaries will see their monthly benefits doubled. Their payouts had previously been slashed from 70 percent to 35 percent of the deceased spouse's original pension. Greek Prime Minister Kyriakos Mitsotakis stated that 8,500 beneficiaries would see increases up to pre-cut levels, describing the measure as correcting a major social injustice.
While more than 75,000 widows pension beneficiaries will not receive an immediate payout increase, they will gain permanent protection against future benefit reductions for the first time. Additionally, approximately 122,000 insured individuals are guaranteed the retention of both national pensions. However, around 60,000 older recipients of widows pensions will receive no increase despite having endured previous benefit cuts.
The Greek pension system has undergone extensive structural adjustments over the past decade following wider economic reforms. Details of the five-point pension plan were originally published in the Greek newspaper Apogevmatini before being outlined by social security authorities.
Broader economic developments and related news
The pension announcements come alongside several notable economic and political developments in Greece. Recent reports highlight an investment wave transforming the port city of Piraeus by reviving abandoned urban properties into active spaces. In the energy sector, Greek industrial firm METLEN has been expanding its European presence through battery energy storage solutions. Meanwhile, Greek Prime Minister Kyriakos Mitsotakis recently met UK opposition leader Kemi Badenoch to discuss energy and migration issues, while authorities continue to investigate a maritime incident off Pylos involving a missing Spanish businessman whose family received geographic coordinates.
