TWENTY FOURTH ANNUAL REPORT OF THE GOVERNMENT OF CYPRUS
ON THE MEASURES TAKEN TO GIVE EFFECT
TO THE ACCEPTED PROVISIONS OF THE
EUROPEAN CODE OF SOCIAL SECURITY
Period covered: 1/7/2016 to 30/6/2017
I. List of Laws and Regulations which apply the provisions of the Code
Please add:
LAWS
- The Social Insurance (Amendment) Law 1(I) of 2017
(Copy enclosed)
- The Social Insurance (Amendment) Law 52(I) of 2017[1]
(Copy enclosed)
The Social Insurance (Amendment) Law 115(I) of 2017[2]
(Copy enclosed)
-
- The Social Insurance (Contributions) Regulations of 2017
(Copy enclosed).
II. Details of the provisions of the above-mentioned legislation giving effect
to each of the following Articles of the Code
PART I
GENERAL PROVISIONS
In an effort to combat undeclared work the Social Insurance law was amended by the Social Insurance (Amendment) Law 52(I) of 2017, introducing heavier penalties to employers for undeclared work.
More specifically an administrative fine of €500 is introduced for each employee for each month the employer was employing the employee without declaring him/her. In addition it is irrefutably presumed that each undeclared employee was employed for six months before the date the infraction was discovered and the wage is presumed to be one and a half times the basic insurable earnings. In addition, the law provides for a temporary suspension of the operations of the employer for 48 hours in the case the employer is subject to a second administrative fine within a period of two years.
The employer has 30 days to pay the administrative fine. After the elapse of 30 days, the fine is increased by €50 per day.
PART II
MEDICAL CARE
Articles 7 – 12
Not applicable as Cyprus has not accepted the obligations of the Code in respect of this Part.
PART III
SICKNESS BENEFIT
a. No change. The following information on coverage is available
TITLE II (Article 74)
A. Number of economically active persons protected –
(i) under general scheme ………………………….. 447.020
(ii) under special schemes –
scheme for ……………………………………….. NIL
scheme for ……………………………………….. NIL
(iii) Total ………………….. 447.020
======
B. Total number of residents 848.319[3]
C. Total number of economically active persons (A(iii)) per cent of total
number of residents (B): 52,69%
The number given in A(i) above is the total number οf persons who have paid or been credited with contributions to the Social Insurance Scheme in 2016.
The number given in B above is the total number of residents in the Government controlled area of Cyprus which was estimated for 2016 on the basis of the census of population of 2001.
b. No change
c. No change
Answer to comments of the ILO on the Consolidated Report
[Please indicate amount paid in respect of dependent wife]
The weekly amount of sickness benefit for the standard beneficiary in the 23rd report was €322,93. Basic Insurable earnings were €174.38
The increase for the dependent wife is calculated on the basic part of the benefit The weekly rate of benefit of 60% of the insurable earnings up to the basic earnings, is increased by 20% = €34.87.
[The calculation of the Sickness Benefit are the same as of the Injury Benefit under Part VI-9. Please explain what is the difference between the two benefits]
The Employment Injury benefit is provided without any insurance conditions as it is a result of an occupational accident.. It is sufficient that the employee was employed on the day he/she had the accident or he/she suffered from the occupational disease, that he/she cannot work because of this and he/she is not receiving salary or wage in full for this period. In the case of an employment accident it is necessary for the accident to have taken place at the workplace and during work hours for reasons related to his/her work or in transit from/to the workplace. The rate of injury benefit is the same as for the sickness benefit, except that the minimum benefit for persons, whose earnings are below the basic insurable earnings, corresponds to such earnings.
PART IV
UNEMPLOYMENT BENEFIT
a. No change. The following information on coverage is available:
A. Number of employees protected:
(i) under general scheme 415.892
(ii) under special schemes NIL
______
(iii) Total 415.892
======
B. Total number of employees 311.205
The number of employees in A(i) above is the total number of employed persons who have paid or been credited with contributions to the Social Insurance Scheme in 2016.
The total number of employees in B above is provided according to the Labour Force Survey (L.F.S.)(2016) which is prepared by the Statistical Service of the Ministry of Finance.
No comparison between the number of employees protected under the General Scheme and the total number of employees is possible since the basis for the collection of the data is different.
For example the number in A above includes also persons who have worked for at least one week and terminated their employment in the reference year whereas these persons are not included in the number of B above.
b. No change
c. No change
Answer to comments of the ILO on the Consolidated Report
[Please compare data with Part V-5. Unemployment Injury Benefit. Persons Protected]
It is clarified that voluntary insured persons working for a Cypriot employer abroad (in a third country) are not entitled to Employment Injury Benefits. Hence their contribution is lower than employed persons.
PART V
OLD-AGE BENEFIT
a. The rate of old-age benefit was increased by 0,81% in the basic part. In the supplementary part there was no change from the amount of pensions in force on 1.1.2016. According to the Social Insurance legislation, each January the amount of the supplementary part of pensions is increased in accordance with the increase of the cost of living index (comparison of the second semesters of the last two years).The average CPI in the second half of 2016 compared with the second half of 2015 declined by 0.66%
The following information on coverage is available:
A. Number of economically active persons protected:
(i) under general scheme ………………… 447.502
(ii) under special schemes ………………… ---
_______
(iii) Total ……………… 447.502 =======
B. Total number of residents ……………………. 848.319[4]
C. Total number of economically active persons ((A(iii)) per cent of
total number of residents (B): 52.75%
The number given in A(i) above is the total number of persons who have paid or been credited with contributions to the Social Insurance Scheme in 2016.
The number given in B above is the total number of residents in the Government controlled area of Cyprus which was estimated for 2016 on the basis of the census of population of 2001.
b. No change
c. No change
Answer to comments/questions of the ILO on the Consolidated Report
[Changes in the minimum contributory period-MoU]
We are not clear what further information is requested. Under the Economic Adjustment Program Cyprus signed a Memorandum of Understanding with the Troika (IMF, EU Commission, and the European Central Bank) in order to receive financial assistance. In this context, it was required that further measures were adopted to secure the financial sustainability of the Social Insurance System. According to the latest actuarial study, the financial sustainability of the Social Insurance Scheme is ensured until 2080.
PART VI
EMPLOYMENT INJURY BENEFIT
a. No change. The following information on coverage is available
A. Number of employees protected:
(i) under general scheme 415.139
(ii) under special schemes NIL
_______
Total 415.139
=======
B. Total number of employees 311.205
Τhe number of employees in A (i) above represents the total number of employed persons who have paid or been credited with contributions to the Social Insurance Scheme in 2016.
The total number of employees in B above is provided according to the Labour Force Survey (L.F.S.)(2016) prepared by the Statistical Service of the Ministry of Finance.
Please refer to Part IV, Unemployment Benefit for further explanations regarding the number of employees above.
b. No change
c. No change
Disablement Benefit
a. The rate of disablement benefit was increased by 0,81% in the basic part. In the supplementary part there was no change from the amount of 1.1.2016. According to the Social Insurance legislation, each January the amount of the supplementary part of pensions is increased in accordance with the increase of the cost of living index (comparison of the second semesters of the last two years).The average CPI in the second half of 2016 compared with the second half of 2015 declined 0.66%.
Where the degree of disability is between 10% and 19% a disablement grant is payable instead of a pension. The amount of the grant varies according to the degree of disablement as shown in the Table below.
|
Degree of disablement |
Amount € |
|
10% 11% 12% 13% 14% 15% 16% 17% 18% 19% |
3.808,44 4.189,29 4.570,13 4.950,97 5.331,82 5.712,66 6.093,51 6.474,35 6.855,19 7.236,04 |
b. No change
c. No change
Death Benefit
Answer to comments/questions of the ILO on the Consolidated Report
[The standard beneficiary consists of a widow with two children. What is the amount paid in respect of the children?]
The amount of widow/er’s pension for the standard beneficiary for the 23rd report was: €263,89 per week. Basic Insurable earnings were €174.38.
The basic part of the pension is 60% of the basic insurable earnings 80% for one dependent, 90% for two and 100% for 3.
The amount paid for children is €52.31
[Please explain the rules of calculation of the Death Benefit?]
Amount of benefit granted in the 23rd report: €211,27
Weekly wage reported: €471.47
Basic part=60% of the basic insurable earnings=€174,38χ60%=€104.63
Supplementary part= 60% of the supplementary disability pension which the deceased was or would have been receiving, disability pension above, for 100% Disability= (€471.47-€174,38)x0.6x0.6=€106.95
Total=104.63+106.95=211.58 (difference in decimal points attributed)
PART VII
FAMILY BENEFIT
a. With the new law, the income threshold for the entitlement to child benefit is incrementally adjusted according to the size of the family. For one child the limit is set at €49.000, for two children at €59.000 and for each additional child over two, the limit is increased by €5.000. According to the legislation in effect, the criterion is fixed and amounts to €59.000, irrespective of the applicant’s number of children.
The age limit for dependent children attending secondary schools is extended from 19 to 20.
A provision is introduced to allow for the consideration of assets that have been alienated in the last 24 months prior to the submission of the application, with respect to the fulfillment of the property criterion amounting to €1.200.000, in order to qualify for the benefit.
Furthermore, with the new law the requirement for habitual residence in the Republic for at least three consecutive years is replaced by a legal and continuous residence for at least five years prior to the submission of the application.
Also, the new law shifts the responsibility for receiving, examining and deciding on applications for child benefit from the Permanent Secretary of the Ministry of Labour, Welfare and Social Insurance to the Head of the Welfare Benefit Administration Service.
In addition, the new law legally regulates the practice currently in effect, according to which the payment of child benefit and single-parent benefit is automatically settled in the first months of each year, even before the application for that year is submitted or examined.
Finally, the new law has removed the requirement of the existing law that the lone parent and the dependent child must be citizens of the Republic or citizens of a Member State of the European Union, in order to become eligible beneficiaries of the single-parent benefit.
Regarding the budget of the Amendment Law, an actuarial study has been carried out by the Ministry and the estimated required cost is €2.2 million (Article 04466.2, Child Benefit).
b. No Change
c. No Change
PART VIII
MATERNITY BENEFIT
Not applicable as Cyprus has not accepted the obligations of the Code in respect of this Part.
PART IX
INVALIDITY BENEFIT
a. The rate of invalidity benefit was increased by 0,81% in the basic part. In the supplementary part there was no change from the amount of pensions in force on 1.1.2016. According to the Social Insurance legislation each January the amount of the supplementary part of pensions is increased in accordance with the increase of the cost of living index (comparison of the second semesters of the last two years).The average CPI in the second half of 2016, compared with the second half of 2015, declined by 0.66%.
The following information on coverage is available:
A. Number of economically active persons protected:
(i) under general scheme 447.020
(ii) under special schemes NIL
(iii) Total 447.020
======
B. Total number of residents 848.319[5]
C. Total number of economically active persons (A(iii)) per cent of total
number of residents (B) : 52.69%
The number given in A(i) above is the total number of employed or self-employed persons who have paid or been credited with contributions to the Social Insurance Scheme in 2016.
The number given in B above is the total number of residents in the Government controlled area of Cyprus, which was estimated for 2016 on the basis of the census of population of 2001.
b. No change
c. No change
PART X
SURVIVOR’S BENEFIT
Articles 59 – 60
a. The rates of widow’s/ widower’s pension and orphan’s benefit were increased by 0,81% in the basic part. In the supplementary part there was no change from the amount in force on 1.1.2016. According to the Social Insurance legislation each January the amount of the supplementary part of pensions is increased in accordance with the increase of the cost of living index (comparison of the second semesters of the last two years).The average CPI in the second half of 2016 compared with the second half of 2015 declined by 0.66%.
The amount of the benefit for a full orphan is as follows:
Basic benefit: €69,75 per week per orphan.
Supplementary benefit: This represents 50% of the amount of the supplementary widow’s pension which would have been payable in each case. The total supplementary benefit where there are more than two orphans, cannot exceed the amount of the supplementary widow’s pension.
The amount of benefit for half-orphans is the same as the increase payable in respect of dependants in the case of old age pensioner i.e. €34,87 per week for one orphan, €52,631 for two orphans and €64,89 for three or more orphans.
No change in the amount of funeral grant. The monthly amount of funeral grant is €507.81 for the death of an insured person or a pensioner, and €253.91 for the death of a dependant of an insured person or a pensioner.
b. Changes after the reference period. The Social Insurance law 59(i)/2010 was amended ( Social Insurance (Amendment) Law 115(I) of 2017) with the addition of a new paragraph 5 in Article 41, stipulating that if the deceased married after the retirement age, the widow/er is not entitled to a widow's/er’s pension unless five (5) years elapsed from the date of the marriage until the date of death.
c. The government is examining the possibility of amending the Social Insurance Law so that a widow's pension is given to men as is given to women.
PART XI
Financing
a. No change
N.Artemis.24th ECSS.Ratified Parts
[1] The law introduces stricter penalties for undeclared work
[2] The law amends maternity benefit provision and introduces paternity benefit
[3] Eurostat: Source: http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tps00001&plugin=1
[4] Eurostat: Source: http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tps00001&plugin=1
[5] Eurostat: Source: http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tps00001&plugin=1