About 440,000 Greek public sector pensioners face ongoing monthly pension cuts after a court postponed a key ruling on the Pensioners Solidarity Contribution. The government recently announced legislative plans to eliminate widowhood pension cuts for approximately 8,500 individuals as a pre-election measure. However, public sector retirees with monthly pensions exceeding 1,468 euros expressed disappointment over total government silence regarding their deductions.
Public sector pensions above 1,468 euros per month have undergone unequal deductions under the Pensioners Solidarity Contribution, known as EAS, since 2010. Retirees expected a government announcement at the upcoming Thessaloniki International Fair, where the Prime Minister will present economic and social policies. They hoped the government would announce the total repeal of EAS or a rational reduction aligned with constitutional proportionality principles.
The government appears unwilling to satisfy pensioner expectations during the pre-election period to avoid reducing revenue for the AKAGE insurance fund. Consequently, the government plans to maintain the bailout-era contribution despite supreme court rulings, including Council of State Plenary ruling 504/2021, which determined that EAS violates Articles 4(1) and 25(1) of the Constitution. The state is waiting for a decision from a pilot trial before the Plenary of the Court of Audit.
Court of Audit pilot trial
The pilot trial originated from a lawsuit filed by a retired judge before the Special Court under Article 99 of the Constitution. The court referred the matter to the Court of Audit Plenary under Article 88 of the Constitution. The trial was set for June 10, 2026, requesting the repeal of EAS or a reduction based on constitutional proportionality.
According to information, the Court of Audit Commissioner issued a positive recommendation favoring a proportional calculation of EAS by bracket rather than across total pension amounts. If accepted by the court, this recommendation would reduce EAS deductions by 50 percent. However, the trial was postponed to October 7, 2026, after the State requested more time, claiming the State Legal Council was unprepared despite the lawsuit being filed six years ago.
According to information, the government intends to wait for the court decision before drafting legislation in 2027 to adjust EAS calculation methods for the future, without retroactive application. If the court accepts the lawsuit in whole or in part, pensioners will need to start a new round of lawsuits and wait years to receive illegally withheld funds. Prior retroactive payments mandated by final court decisions for the period before 2018 have still not been paid to retirees.
Calculation method and legal framework
Retired Supreme Court judge Leandros Rakintzis highlighted the issue in previous articles published on Capital on September 23, 2024, and May 5, 2025. Created under Law 3986/2011, EAS remains a major leftover requirement from international bailout agreements. Its stated purpose is ensuring pension adequacy and national system sustainability by funding AKAGE, the generational insurance reserve fund.
AKAGE currently holds 23 billion euros in capital and collects 790 million euros annually strictly from EAS deductions on public sector pensions. Law 4387/2016 later integrated all public sector pension systems and self-employed professionals into EFKA. Although self-employed pensions have been exempt from EAS deductions since 2023, self-employed retirees still benefit from a system sustained exclusively by public sector pension contributions.
Rakintzis stated that exempting self-employed retirees while taxing public sector pensions violates the constitutional principle of equality. The state deducts EAS at source from 440,000 public sector pensioners with combined main pensions above 1,468 euros per month and auxiliary pensions above 300 euros. Deduction rates start at 3 percent and reach 14 percent for monthly pensions over 3,583 euros, divided into 300-euro brackets.
Inequality and tax deductions
Unlike standard income tax brackets, the state applies EAS percentage rates from the very first euro of the pension amount. For pensions issued prior to the Katrougalos Law cuts, deductions are calculated on original pension amounts rather than actual net monthly payouts. Furthermore, the state does not allow EAS deductions to be deducted from taxable income, resulting in withheld funds being taxed as income, a policy Rakintzis described as absurd.
Rakintzis noted that the timing of the Court of Audit decision and its legislative implementation remain tied to parliamentary election scheduling. The court will likely rule that imposing EAS is constitutionally acceptable under Council of State precedent, while finding its calculation method unconstitutional under Article 25 proportionality principles. The court will then refer the matter back to the government for legislative action.
Elections and retroactive pension refunds
If the court issues its ruling before parliamentary elections, the government will move quickly to pass legislation reducing EAS by 50 percent for future payments through proportional bracket calculations. If the ruling comes after elections, the incoming government will act without urgency because it must locate replacement funds to finance AKAGE. Managing retroactive refunds poses a significant obstacle for the administration.
According to a statement by a Minister, previous retroactive refunds were restricted strictly to pensioners who had filed lawsuits. Rakintzis warned that applying the same policy to new retroactive claims would violate the rule of law and lead to widespread litigation that could block court operations for years.
