What is happening to the OAEE and what should be done to rescue it?

 The fact that one of the biggest social insurance organisations in our country, the Social Organisation of Freelance Professionals (OAEE), is hanging by a thread is now widely accepted. Since 1 January 2007, when OAEE began operating, after amalgamating with TEBE, TAE and ΤΣΑ, the first serious doubts arose. These concerned whether the national body for freelance professionals, tradesmen and motorists could stand on its own two feet during the financial downturn and recession.

There has also been a fundamental change in the balance between insured individuals and pensioners in the organisation and a collapse in the ability of the freelance professionals to pay their contributions. This can be attributed to a number of factors: the huge pressure on their income; a general deterioration of the demographic problem; an explosion in unemployment, the flexibility of different forms of employment; a rapid decrease in pensions (following law nos. 3863/2010, 3865/2010, 4024/2011, 3986/2011 and 4051/2012); and the enforcement of strict austerity measures (based on the memorandum laws that have dominated Greece since 2010) affecting all aspects of financial and trading life around the country.

The current position of OAEE is now even worse:

• A vast deficit: There is already a discussion about the new deficit being in the region of EUR 535 million and this partly because of the leakage of OAEE during 2015. The total amount of unpaid contributions had already reached EUR 7.4 billion by the end of 2014, mainly from small debtors.
• The ratio between insured individuals and pensioners is fast approaching a one to one relationship – which would not be viable, either on an actuary basis or on a cash basis, in any social security system.
• Besides a reduction in regular payments from insured individuals, income from OAEE’s estate (which was limited in the first place) has also reduced and a significant portion of it has either been sold off completely or cut down.

So, it is reasonable to ask what can possibly be done to save the OAEE, if anything, as, if it goes down, this would be serious, not only for the country’s existing freelance professionals, but also for the next generation of freelancers.

Suggestions have been made by both politicians and the unions, struggling to defend the rights of freelance professionals. In our view, the more realistic and innovative suggestions for rescuing OAEE, are the following:

• To decriminalise all debts owing to ΟAEE, other than deliberate avoidance of payment.
• To set up a mechanism for monitoring payments, using different security grades, so as to fight avoidance of payments to OAEE (similar to the system in place for the Social Security Institute - IKA)
• To allow insured individuals to be classified in the security grade of their choice and to continue to be graded in this way, so that OAEE can understand over time whether the system improves its ability to gather contribution payments.
• To set the amount of contribution payments based, not on the amount assumed from the person’s social insurance category, but on their real income. Contributions should represent no more than a certain proportion of actual income, so that the insured is able to pay. However, the system must be developed enough to be able to check the insured person’s actual income via the tax authority.
• To ensure that whether an individual pays into IKA–ETAM or OAEE depends on which source of income is dominant – employed or freelance work. The Local Administrative Commissions of IKA-ETAM and OAEE may ask individuals for details about this.
• To reinforce OAEE’s finances by seeking new funding beyond contribution payments. There should be a connection made between the National Wealth Cash and OAEE and a pooling of resources to secure the sustainability of OAEE.

George Koutsoukos                        

Partner, PhD, Attorney at Law.

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