Key Points:
- A new tax system ensures that no pensioner in the country will be left without a financial increase.
- The reform links tax burden reduction directly to the amount of salary or pension and the number of dependent children.
- A general pension increase of approximately 2.35% is projected for 2026, supplemented by tax relief and special allowances.
- The controversial “personal difference” provision from the 2016 Katrougalos law will be completely abolished in a two-stage process.
- In November, eligible pensioners will receive a one-time 250-euro allowance based on age and income criteria.
In a significant fiscal policy shift, the government has announced a new tax system designed to provide tangible financial relief to employees and pensioners across the nation. The reforms promise that every single pensioner will see an increase in their income, marking a definitive break from previous austerity-era measures.
A New Era of Financial Support
The cornerstone of the new system is a dual-pronged approach that benefits citizens based on their individual financial and family situations. Unlike the current framework, the upcoming changes will link the reduction of the tax burden directly to two key factors: the amount of an individual’s salary or pension and the number of dependent children they support. This targeted approach ensures that the benefits are distributed more equitably, providing greater support to families and those with lower to moderate incomes.
Employees and pensioners will be the first to experience the positive impact of these changes. Specifically, civil servants, individuals earning the minimum wage, and pensioners who do not have a “personal difference” are expected to see raises that outpace the rate of inflation, providing a much-needed boost to their purchasing power.
What Pensioners Can Expect
The financial outlook for retirees is set to improve significantly over the next few years. The government has outlined a clear timeline for a series of increases and benefits:
Projected Increases for 2026
For the year 2026, the general increase in pensions is estimated to be around 2.35%. This will be further supplemented by an indirect increase for pensioners whose income is above the tax-free limit, as they will benefit from reduced tax deductions. Adding to this, a special 250-euro allowance is scheduled to be distributed in November to pensioners who meet specific age and income criteria.
Looking further ahead, all pensioners will receive the full increases based on the country’s economic growth and inflation rates of 2026. This payment will be processed in December 2026 and delivered with the January 2027 pension checks.
Abolishing the ‘Personal Difference’
One of the most impactful elements of this reform is the definitive abolition of the “personal difference,” a key and often contentious provision of the 2016 Katrougalos law. The prime minister announced that this measure, which has prevented many pensioners from seeing actual increases in their monthly payments, will be phased out in a two-stage process.
This move is a direct response to the long-standing demands of retiree groups and signals a fundamental shift in pension policy. As a result of this transition, pensioners can anticipate increases ranging between 1.17% and 2.5% as early as December 2025. The government’s clear message is that the era of stagnant pensions is over, and a new framework is in place to ensure all retirees share in the country’s economic progress.
Image Referance: https://www.ekathimerini.com/economy/1280824/a-raise-for-every-pensioner/
