The deficit in unpaid social security had reached EUR 144 million by the end of 2021, according to the General Directorate of Taxes, posing a significant risk to the pension pots of the future.
Between 2018 and 2021, the deficit expanded by around 28.8%. If it continues to grow at this rate and is not reduced, current employees will struggle to draw a pension in the future. Had the deficit been put in the pension pot, it would cover pensions with inflation for five years.
The deficit keeps increasing due to an aging population, mass emigration, informal economy workers, and failure to pay from businesses.
According to official data, 94% of the debts owed for social security come from the private sector, with big businesses responsible for more than 63%.
In the case of non-payment of insurance, the state must subsidise the pension pot from regular taxes. Revenue from contributions increased by 13.6% in 2021, while expenditures increased by 10.5%, meaning what is left is not enough to fill the gap.
The amount of money needed to cover pensions is also increasing at a rate of around 5% a year. Meanwhile, the value of pensions is decreasing, putting the elderly at risk of poverty.