With €245 million in overdue Social Insurance Fund contributions sitting uncollected, the government and parliamentary parties struck a last-minute compromise on Tuesday that rescued a repayment bill from potentially unconstitutional amendments — and cleared the way for a new scheme to launch within the month.
Labour Minister Moushouttas rushed to the Parliamentary Labour Committee session after parties pushed to extend repayments well beyond what the original bill allowed. DIKO, ELAM, and the Ecologists had proposed 120 instalments; DEPA wanted 100 for debts exceeding €30,000.
The bill as drafted offered 48, with no penalty write-offs. The minister was blunt: anything beyond the compromise would be ruled unconstitutional and the law sent back to the House.
His counter-proposal — 54 instalments with full penalty write-offs — drew on the same provisions used in two earlier schemes during the financial crisis and the Covid-19 pandemic.
The incentive for debtors to settle quickly is built in: the sooner they pay, the more of their penalty surcharge is wiped. Under the agreed formula, a debtor who clears their arrears in half the available instalments saves half their penalty. Under the previous scheme, at least one debtor settled in just two instalments and avoided penalties altogether.
What debtors stand to gain
For those who join, penalty surcharges stop accumulating from day one. Criminal prosecutions and court enforcement orders are suspended for the entire repayment period. Debtors providing paid services to the state will have 30 per cent deducted towards their debt, keeping 70 per cent. The 395 debtors still enrolled in the current scheme — which expires in September — can transfer directly to the new one.
Applications will go live online once the bill is approved, with a four-month window to apply. The minister said the IT system is ready to go. The bill goes to the House plenary next Monday.
A mixed track record — and an open question
The two previous schemes recovered around €100 million from €225 million in total SIF debts — a return undermined by high dropout rates. In 2016, 6,500 debtors signed up to restructure €125 million in arrears; 51 per cent eventually dropped out, and only €58 million was recovered. The 2022 scheme fared worse: of 4,400 debtors and €104 million in debts, 62 per cent — nearly 2,900 people — were removed for non-compliance, yielding €40 million.
The committee also heard a sobering detail about those who never pay at all: imprisonment does not extinguish a debt to the state. It passes to the debtor’s heirs.