PNO strike - rumour

Chat and items of interest about Crete and Greece.
bobscott
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PNO strike - rumour

Postby bobscott » Sat Dec 10, 2016 10:14 am

Yesterday I was told by a young-ish Greek lady that the reason for the seamen's strike was:

They had a pension of €1200 which is high because they have to work in all conditions, some dangerous.
The Government says it is going to cut that pension to €400
The Government says that the €400 pension will be subject to a 50% tax
The remaining pension of €200 is not enough to live on.

Well, I agree with the last line, but have no idea as to the veracity of the previous 3 lines.

Does anyone out there have any hard FACTS as opposed to this unsupported statement?

Bob.
Yesterday today was tomorrow. Don't dilly dally!

Kilkis
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Re: PNO strike - rumour

Postby Kilkis » Sat Dec 10, 2016 12:04 pm

I have no specific information on the seamen's situation but I do know Greeks from other walks of life who have had their pensions cut drastically, some over 50 %. Some who were receiving two pensions have had them combined with a reduction but I don't know the level of reduction.

Personally I now receive an IKA pension that is in two parts, a basic pension and an auxiliary pension. The actual amount paid into my bank each month on the basic one is about 7.5 % below the amount awarded. The amount paid on the auxiliary one is 40 % below the amount awarded. This is not a tax deduction. I will still have to pay income tax on the amount actually received when I do my annual return. I am not aware of a higher tax rate being applied to it but I will not know for sure until I get my assessment. I will pay at least 22 % on both and I think I will have to pay an increased level of solidarity tax, which applies to total income, both taxable and non-taxable. Effectively I will probably finish up with about 45 % of the awarded amount for the auxiliary pension.

Warwick

bobscott
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Re: PNO strike - rumour

Postby bobscott » Sat Dec 10, 2016 2:50 pm

Thanks Warwick. I have never understood the terms basic pension and auxiliary pension here in Greece. Are we talking Basic State Retirement pension and Works Pension (using UK terminology)?

In terms of the UK it is strictly correct to say that the State Retirment pension (SRP) is paid tax-free; on the other hand, tax free allowances are reduced by pound for pound received from the SRP which decreases the amount of allowances and therefore increases the amount of tax paid on works or private pensions. In other words, in practical terms the whole lot is taxed but just in a kind of devious way.

Bob.
Yesterday today was tomorrow. Don't dilly dally!

bobscott
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Re: PNO strike - rumour

Postby bobscott » Sat Dec 10, 2016 3:18 pm

BTW - we did see that ferry that has been moored in the bay for a day or two, sailing in the Athens direction about mid-day today. Strike breaking or repositioning ready to resume 6am on Sunday (or Tuesday??) Bob.
Yesterday today was tomorrow. Don't dilly dally!

bobscott
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Re: PNO strike - rumour

Postby bobscott » Sat Dec 10, 2016 3:20 pm

Sorry Carolina: just saw your post on the other part of the board. Glad the strike has been suspended. Bob.
Yesterday today was tomorrow. Don't dilly dally!

Phild
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Re: PNO strike - rumour

Postby Phild » Sat Dec 10, 2016 3:23 pm

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Phil
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Kilkis
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Re: PNO strike - rumour

Postby Kilkis » Sat Dec 10, 2016 3:58 pm

bobscott wrote:Thanks Warwick. I have never understood the terms basic pension and auxiliary pension here in Greece. Are we talking Basic State Retirement pension and Works Pension (using UK terminology)?...


Not really. There isn't a single State Pension in Greece although IKA is probably the nearest equivalent. Each group of workers have tended to have their own pension fund. Engineers have a pension fund; the military have a pension fund etc. For the people in that group that is their only pension. They don't pay into another State Fund as is done with NI in the UK. The concept of occupational pensions in addition to a State Pension doesn't really exist here although a few people do contribute to private insurance funds.

A better comparison in the UK would be to the Basic State Pension and the various contribution related additions to the Basic State Pension, like Graduated Retirement Benefit, Additional State Pension and SERPS, to which people who retired before April 2016 were entitled. Your NI contribution was a percentage of your income. If you were a low wage earner and simply paid the basic NI stamp each week you would only qualify for the Basic State Pension. If you paid in more than the basic stamp you became entitled to an additional state pension related to how much extra you paid in. If, however, you worked for a company that had an occupational pension/superannuation scheme that additional NI contribution was usually paid into the occupational scheme and you lost the right to the additional state pension, called contracting out. For example, I worked for companies with occupational schemes and was contracted out virtually all my life but my state pension statement on retirement was for a basic state pension of £102.15 plus a Graduated Retirement Benefit of £4.87 plus an Additional State Pension of £3.21. The former accrued from casual work that I did during holidays as a student. The latter was because I worked for one company with an occupational scheme for only 18 months and they enforced their right to repay me my contributions because I worked less than 2 years. The contracted out NI contribution was deducted from what I was repaid and returned to NI.

IKA works pretty much the same way. In my case the auxiliary part is smaller than the basic part. For many workers who had decent paid jobs and worked in Greece all their adult lives the auxiliary part could be the majority of their pension. In many cases cuts have been applied mostly to the auxiliary part. I guess the thinking is that someone can live on the basic part and the auxiliary part is just a luxury they can do without.

I don't like the phrase "the State Retirement pension (SRP) is paid tax-free". It gets misinterpreted as "the State Retirement pension (SRP) is not liable for tax" and that is not true. Also, I don't think it is really fair to describe the way UK income tax is deducted as "devious". It doesn't really matter what sort of income you have, if you have more than one income stream HMRC will always try to issue code numbers so that they need to deduct tax from the minimum number of sources. They will deduct each income stream from your personal allowance until they run out of allowance. All the ones deducted from the allowance will be non-taxable. Tax will then be deducted from whatever sources are left but with a small code number and hence a high tax rate. The tax that is due on your entire income is deducted from the remaining sources. The Basic State Pension is always less than the tax free allowance and so, if a person only received that pension, they would not be liable for income tax. HMRC simply include the State Pension first in their calculation.

Warwick

bobscott
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Re: PNO strike - rumour

Postby bobscott » Sat Dec 10, 2016 4:29 pm

OK, I will concede willingly that the phrase State Retirement is tax free is misleading. Perhaps I should have said that it is paid free of tax (gross, if you like) but is added to one's private/works pension when considering the amount by which one's total income exceeds the tax-free allowance. Certainly when it is paid to me, it is paid in full, but I agree that it is added into the total income for PAYE purposes and my main income provider (the government) deducts tax from my total income when paying my Government pension.

Sloppy drafting on my part.
Yesterday today was tomorrow. Don't dilly dally!

paul g
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Re: PNO strike - rumour

Postby paul g » Sun Dec 11, 2016 8:37 am

If the OP is true, you can see why they are a bit peeved.


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