The increase in the birth allowance from 2,000 euros for each child, which applies today, to 2,400 to 3,500 euros depending on the number of children, and retroactively from 1.1.2023, was announced today by the Minister of National Economy and Finance, Kostis Hatzidakis and the Minister of Social Cohesion and Family, Sofia Zaharaki.
The introduced inflationary crisis requires additional initiatives to support new parents. Thus, the Government proceeds with the retroactive and permanent increase of the birth allowance, the additional fiscal cost for its increase will be covered by the saving of 100 million euros from allowances previously received by freelancers who declared very low incomes.
At the same time, in 2024, 6 more support measures for new parents and the family, totaling 441 million euros, will be implemented, which will be added to those already implemented by the Government gradually from 2019 until today.
The Minister of National Economy and Finance, Kostis Hatzidakis, said: “We had committed to save over 100 million euros from the self-employed through the new taxation system. The increase in the birth allowance by 400 to 1,500 euros, depending on the number of children and with retroactive effect from 1.1.2023, is the first proof that we can support new parents more from these savings.
It is yet another response by the Government to the problem of accuracy, in the context of a number of other initiatives already underway (‘household basket’, increased fines increasingly imposed in cases of bribery, profit ceiling for baby milk, etc.).
And it comes to be added to a series of additional support measures for new parents implemented from this year (increase in tax-free allowance for families with children, increase in maternity allowance for freelancers and farmers, establishment of a social tariff for multiple children, increase in family allowance
for civil servants etc.).
All this not only shows the sensitivity of the Government, but also that we have an economy whose engine has come forward. And that is why we are able to implement these kinds of policies. The additional support for thousands of young parents that we are announcing today is a message that a serious economic policy can also lead to a more substantial social policy.”
The Minister of Social Cohesion and Family, Sofia Zaharaki, said: “We know well what the reality is. We know that the cost of living is high for many of our fellow citizens and especially for families with children. However, the battle we are fighting as a government to support the Greek family is just as great, daily and persistent. We are fully aware that this is how we support the future and tomorrow of our country itself.
The new measures that we are announcing today, together with what the government of ND has instituted since the first four years, create an important security perimeter. For new couples, moms, dads, kids. The families. To feel that the state is there. He stands by them every day in a meaningful way.”
The Deputy Minister of National Economy and Finance, Thanos Petralias, said: “Strengthening the family, especially in the first period after the birth of a child, which involves inelastic costs, is an important social welfare measure, especially at a time when the number of births has been decreasing in recent years. The increase in the birth allowance follows important economic measures that have been taken in recent years.
It is indicative that since the beginning of this month three more measures have been implemented which include the extension of the maternity allowance, the increase of the child tax allowance and the increase of the family allowance in the public sector payroll. It is clear that the issue of low fertility is something that is now taken into account in all aspects of fiscal policy implementation.
The birth allowance in detail:
It is permanently and retroactively increased for births from 1.1.2023, from 2,000 euros for each child to 2,400 to 3,500 euros (an increase of 400 to 1,500 euros) depending on the number of children. It is reminded that from 1.1.2020 it has
institute a birth allowance of 2,000 euros for each child born. The beneficiary is the mother who resides permanently and legally in Greece and has an annual equivalent family income of up to 40,000 euros. Today the aid amounts to 2,000 euros and is paid in two equal installments of 1,000 euros.
Now, the birth allowance increases for each child born according to the number of dependent children in the family (as they are formed after the birth of the child) as follows:
- 1 child: 2400 (increase of 400 euros)
- 2 children: 2700 (increase of 700 euros)
- 3 children: 3000 (increase of 1000 euros)
- 4 or more children: 3500 (increase of 1500 euros).
The current cost of the birth allowance amounts to 150 million euros and concerns approximately 75,000 new births per year. The cost of this increase is estimated at EUR 45 million per year and EUR 90 million for 2024 (due to the payment of the retrospective amounts of 2023) and supports approximately 35,000 families with 1 child, 32,000 families with 2 children, 6,600 with three children and 1,400 large families annually.
The payment of the increased amounts, as well as the payment of retroactive amounts for births from 1.1.2023 is planned to take place by April 2024.
In addition to the increase in the birth allowance, the Government is proceeding with the implementation of 6 additional measures from 1.1.2024.
Specifically:
- The tax-free allowance for families with children is increased by 1,000 euros (cost 135 million euros per year, 1.34 million taxable beneficiaries).
- The maternity allowance for freelancers and farmers is increased from 4 to 9 months at the level of the minimum wage (40 million euros per year).
- For the winter 2023-2024, the income limits of the heating allowance were increased from 3,000 euros for each child to 5,000 euros for each child.
- A social electricity tariff for many children is introduced (cost 11 million euros per year).
- Public sector payroll reform with an increase in the family allowance by 20 euros for the 1st child and by 50 euros from the 2nd and each additional child (155 million euros per year, 330,000 beneficiaries).
- A ceiling on the profit margin on baby milk was introduced.
In addition to the above, according to newsit, gradually from 2019, the Government proceeded to implement additional measures to support families with children. Specifically:
- Birth allowance of 2,000 euros for each child born, which increases as I mentioned by 400 to 1,500 euros, depending on the number of children.
- Income tax reform with an introductory rate of 9% (from 22% that was) and an increase in the tax-free allowance by 1,000 euros for each child (481 million euros per year).
- “My Home” program for young couples (cost 750 million euros).
Reduction of VAT from 24% to 13% for baby items (cost 12 million euros per year). - Abolition of parental benefits-gifts tax for first-degree relatives, for gifts-benefits up to 800,000 euros (cost 26 million euros per year).
- Above parental leaves for both parents (paternity leave, subsidized parental leave of 2 months for both parents, extension of private sector maternity leave from 6 to 9 months).
- Exemption of family cars from luxury tax.
- Increase of OPECA program for school meals (approximately 80 million euros between 2020-2023, 2023-2024: 217,267 meals are distributed daily, in 1,658 primary schools).
- Extraordinary financial aid with 1.5 extra allowance to approximately 800,000 beneficiaries of OPECA’s child allowance (353 million euros).
In total, it is estimated that permanent measures to support the family have been taken at a budgetary cost of around 800 million euros per year, in addition to the emergency aid and my HOME program.
Finally, a series of support programs for new parents are underway, namely:
- 3 projects of the Recovery and Resilience Fund are underway, namely:
a) Support program up to 50% of the project budget for the creation of new care centers or new places in existing centers. It concerns the care of infants from 2 months to 2.5 years. Project budget of 70 million euros.
b) Creation of 150 creative employment centers (KDAP) – STEM centers for children aged 12-15. Project budget 17.3 million euros. They are expected to be operational in the last quarter of 2024.
c) The social housing project is implemented with the renovation of 100 apartments (70 in Athens and 30 in Thessaloniki). In cooperation with the municipalities, amounting to 1.6 million euros. - Allocation of €360 million to cover all full nursery voucher applications (56,815). In 2023-24, 7,045 more children were vouchered to enroll in a typical development KDAP and 1,305 more children with disabilities to enroll in a KDAPAmA. In 2023-2024, credits are increased by 25 million euros (from 40 million euros to 65 million euros) from the state budget.
- Reinforcement of the “Neighborhood Babysitters” pilot institution, with a voucher increase of up to 500 or 300 euros per month for each child, depending on the employment status.
- School Meals: This school year saw the number of participating primary schools increase to 1,658 – the most ever – distributing 217,267 meals daily. In the following school year, with a new contractual framework, the increase in program credits has been ensured by the state budget
- Implementation of a package of measures for the housing policy with a total budget of 2.2 billion euros, through programs, which are already implemented such as: “My house” and “Covering” “Housing and work” and new ones expected to start, such as: “Renovate Rent” and “Social Benefit”. In addition, for 2024 the budget for the housing allowance is increased by 4 million euros (from 396 to 400 million euros), as well as the budget for the “Housing and Work” program by 5 million euros.
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