Free choice of contributions for any insured freelancer
The prime minister spoke about "free choice of contributions, depending on the wishes and plans of each insured person", when talking about the upcoming changes in 2020, for 1,5 million freelancers, farmers and self-employed.
Kyriakos Mitsotakis presented the basic principles of the new insurance system for the 1,5 million freelancers and farmers that will come into force in 2020 from the Thessaloniki Summit 2019, on Thursday night.
As he explained the "new, innovative, simple and efficient system", disconnects insurance from years of work and income and it offers a free choice of contributions, depending on the wishes and plans of each insured person.
In practice the new insurance system for freelancers, farmers and self-employed will foresee that the higher the contributions, the greater the pension.
According to Ministry of Labor officials, a key feature will be the decoupling of insurance deductions (in favor of primary health insurance) of non-employeed from taxable income.
As the circles of the Ministry of Labor have emphasized, the new system will stop the existing calculation of contributions based on the most recently cleared taxable income from the exercise of professional activity, which is effective from 1st January 2017.
Under the new system, the new insurance categories will not be income-related, nor will the transition from the first to the next scale be mandatory.
The EFKA (Social Security System) data show that the three-year implementation of the Insurance System of the former Minister of Foreign Affairs (Katrougkalos) has led to a decrease in collectability and an increase in tax evasion. Specifically, collectability is stuck at 56% -60% and the declared income appears to be reduced, and as a result, after the setoff each year, EFKA returns more than 200 million euros to freelancers and farmers.