Greece Cuts Off Benefits to 200,000 Caught in Fraud

Greece Cuts Off Benefits to 200,000 Caught in Fraud

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ATHENS – Desperately trying to find ways to save money in the midst of a crushing economic crisis, Greece is cutting off benefits, including pensions, to 200,000 people the government said lied to get checks, were dead, or not blind as they claimed. The move will save about $1.06 billion, the government said, but there was no word on whether anyone would be prosecuted for stealing money, often for many years.

The number of those filing false claims represents about 2 percent of the country’s population and was seen as symptomatic as one of the reasons why Greece is staggering under $460 billion in debt and needed to get two bailouts of $325 billion from international lenders to prop up the country’s dead economy. Labour Ministry officials said the fraudulent claims were discovered after doing basic data cross checks and means-testing, under pressure from its benefactors, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to cut its deficits.

Among those caught were families who were getting pension checks for dead relatives they did not report were deceased and rich people posing as poor to become eligible, as well as those claiming they were blind but were found to be working, including driving taxis.  “They were caught during the inquiry and the state is reclaiming the money they have illegally taken,” a Labour Ministry official told Reuters on condition of anonymity.

Pension fraud is rampant in Greece. A ring involving several employees at the IKA social insurance fund in Kallithea, southern Athens, was found earlier this year to be using forged papers to pay out health benefits. On the island of Zakynthos, doctors and officials were implicated in the granting of an inexplicably high number of benefits for blind people. The government was even checking security camera footage of withdrawals from bank ATM’s to catch pension and benefit cheats.

Outgoing Labour Minister Giorgos Koutroumanis said it had been agreed that a new body would be set up to manage the payment of pensions and benefits in an attempt to stamp out fraud and costly mistakes, such as retirement payments being paid to dead pensioners. The next government will also have to decide how many of around 90 different social benefits will be scrapped.

Greece has already slashed pensions by an average of 25 percent to balance the books of its ailing state-run social security system, outraging pensioners and fueling deep discontent with the Troika’s austerity policies. With nearly 25 percent of the 11 million population retired, pension payments are a major burden on state coffers, adding to a deficit of 160 percent of Gross Domestic Product (GDP). Greece is also struggling to get money from current workers to fund pensions because the austerity measures have added to a deep recession of 21.8 percent, in which more than 111,000 businesses have closed.