TWENTY FIFTH 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:  1/7/2017 to 30/6/2018

I.                   GENERAL

A.    Administration/Organisation

Since 2015 the Social Insurance Services (SIS) participate along with other Government Services in the Government Gateway, which is deemed one of the most important infrastructure projects for the successful implementation of the Electronic Government in Cyprus.

In particular, through the Government Gateway every insured person is able to acquire the following information:

1.      Social Insurance Record for the entire insurance period (it covers all the insured persons’ period of insurance),

2.      Social Insurance Record for a specific year,

3.      A certificate of benefit payment/entitlement and

4.      Temporary calculation of statutory pension.

As regards the training of the Social Insurance personnel, during the reference year, the Administration of the SIS organized a series of seminars on the basic principles of Public Administration. Furthermore, the SIS in collaboration with the Academy of Public Administration organized seminars and workshops regarding customer service. In addition to these training activities, another series of seminars took place at the Academy regarding the training methods that experienced Social Insurance colleagues should follow when they are assigned to train new colleagues in the subject matter of their expertise.

B.     Benefits

During the reference year another Law has been put into effect regarding the protection of paternity. Τhe Law on the Protection of Paternity entered into force on 1 August 2017 N.117(I)/2017 (a copy is attached herewith as Annex I). In addition to this, in the same year the Social Insurance (Amendment) Law N.115(I)/2017- Paternity Benefit was also enacted (attached as Annex II).

According to the provisions of the Law, natural fathers or fathers through surrogacy are entitled to parental leave of 2 consecutive weeks, to be taken from the actual week of confinement until the 16^th week of the actual week of confinement or by the end of the maternity leave in case of multiple birth, hospitalisation or premature birth. Furthermore, the Law provides that adoptive fathers are also entitled to parental leave of 2 consecutive weeks from the week of adoption until the 16^th week of the adoption.

During the period of parental leave the father is entitled to paternity allowance which has the same insurance conditions as maternity allowance. 

The insurance conditions are as follows:

• The claimant must have been insured for at least 26 weeks before the beginning of the maternity leave and having paid an amount equivalent  to at least 26 times the weekly Basic Insurable Earnings  of €174.38 per week (0.50 insurance point); and

• He must have paid  or assimilated insurance in the relevant contribution year equal to at least 20 times the weekly amount of Basic Insurable Earnings (0.39 insurance point). The Paternity Allowance is not payable if a parent receives his/her full wages during the paternity leave period. If reduced wages are paid, the amount of such wages and the benefits payable may not exceed the full wage.

Furthermore, the amount of paternity allowance is calculated as follows:

• Basic Benefit: 72% of the weekly value of the basic insurance points over the relevant contribution year, increased to 80%, 90% and 100% for one, two or three dependants respectively.
• Supplementary Benefit: 72% of the weekly value of the supplementary insurance points over the relevant contribution year (no fixed maximum amount, earnings ceiling applied).

II.                MEDICAL CARE

(see above a-c)

III.             SICKNESS BENEFIT

• No change
• No change
• No change

IV.             UNEMPLOYMENT BENEFIT

a.       No change

b.      No change

c.       No change

V.                OLD AGE BENEFIT/STATUTORY PENSION

a.       No change

b.      No change

c.       No change

d.      There was no change in the rate of basic and the supplementary part of the statutory pension from the amount of pensions in force on 1.1.2017.

According to the Social Insurance legislation the rates of basic pensions are reviewed at the beginning of each year in accordance with the percentage of revision of the basic insurable earnings. For 2018 the basic insurable earnings remained the same as in 2017.

Furthermore, the Social Insurance legislation provides that 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) if it  is at least 1%. The average CPI in the second half of 2017 compared with the second half of 2016 declined 0.23%.

VI.             WORK ACCIDENT AND OCCUPATIONAL DISEASE BENEFIT

a.       No change

b.      No change

c.       No change

d.      There was no change in the rate of basic and the supplementary part of the Disablement Benefit and Death Benefit from the amount of pensions in force on 1.1.2017.

According to the Social Insurance legislation the rates of basic pensions are reviewed at the beginning of each year in accordance with the percentage of revision of the basic insurable earnings. For 2018 the basic insurable earnings remained the same as in 2017.

Furthermore, the Social Insurance legislation provides that 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) if it is at least 1%. The average CPI in the second half of 2017 compared with the second half of 2016 declined by 0.23%.

VII.          FAMILY BENEFIT

On 28.7.2017, an amending law was published in the Official Gazette of the Republic of Cyprus which is in effect since 1/1/2018 (attached Annex III).

Based on the new law the following provisions/criteria apply since 1/1/2018:

CHILD BENEFIT

The amount of the child benefit is proportional to the number of dependent children in the family and the level of total gross family income and assets.

Income criterion

The income threshold for the entitlement to child allowance is incrementally adjusted according to the size of the family. For one dependent child the limit is set at €49.000, for two dependent children at €59.000 and for each additional dependent child over two, the limit is increased by €5.000.

Assets criterion

Τhe child benefit shall  not be granted if the total value of the assets of the family, as provided  for in the Law , including real estate, stocks, bonds, securities and deposits are in excess of €1.200.000. The total assets of the family also include the value of any possible alienation of assets that took place within 24 months prior to the application submission date.

Residence criterion

The child allowance is granted to the families who have their legal and continuous residence for at least five consecutive years prior to the application submission in the areas under the effective control of the Republic of Cyprus. For European citizens EU Regulation 883/2004 of the European Parliament and of the Council of 29th April 2004 on the coordination of the Social Insurance Systems Art 68 applies.

Other criterion

The age limit for dependent children attending secondary schools is extended from 19 to 20 years old.

The amount of child benefit for the year 2018 is analyzed below:

Previous year annual family income in €	One child €	Two children €	Three children €	Four children €
€0.00-€19.500,00	475	570	1.045	1.675
€19.500,01-€39.000,00	425	520	995	1.525
€39.000,01-€49.000,00	380	380	760	1.260
€49.000,01-€59.000,00	0	345	690	1.135

Notes:

(i) For families with more than two dependent children the gross family income ceiling is increased by €5000 per child (i.e.  €64.000 for three children, €69.000 for four   children etc.)

(ii) The rate of child benefit paid   to a family with three children and a total annual gross income between €49.000 and €64.000 is €690.00 per child per year.

(iii) The rate of child benefit paid   to a family with four or more children is €1135.00 per child per year provided income criteria are met. Please refer to note 1 above.

SINGLE PARENT BENEFIT

A complementary benefit to child benefit beneficiaries is attributed to single parents (unmarried, divorced, widow/widower, the other parent has been declared a missing person by the court or started serving his/her sentence of imprisonment provided the duration of the sentence of imprisonment exceeds six months) with dependent children.

Single parents and dependent children are entitled to single parent benefit provided they meet the criteria for child benefit.

The requirement of the law that was in effect until 31/12/2017 that the lone parent and the dependent child must be citizens of the Republic of Cyprus or citizens of a member state is not in force as from 1/1/2018.

A single parent family is entitled to single parent benefit if its annual gross family income does not exceed €49.000.

The amount of single parent benefit for year 2018 is analyzed below:

Previous year family income	Monthly allowance for each dependent child
€0 – €39.000,00	€180
€39.000,01 – €49.000,00	€160

VIII.       MATERNITY BENEFIT

Not applicable as Cyprus has not accepted the obligations of the Code in respect of this Part.

IX.             INVALIDITY BENEFIT

a.       No change

b.      No change

c.       No change.

d.      There was no change in the rate of basic and the supplementary part of the invalidity pension from the amount of pensions in force on 1.1.2017.

According to the Social Insurance legislation the rates of basic pensions are reviewed at the beginning of each year in accordance with the percentage of revision of the basic insurable earnings. For 2018 the basic insurable earnings remained the same as in 2017.

Furthermore, the Social Insurance legislation provides that 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) if it  is at least 1%. The average CPI in the second half of 2017 compared with the second half of 2016 declined by 0.23%.

X.                SURVIVORS’ BENEFIT

a.       No change

b.      No change

c.       No change

d.      There was no change in the rate of basic and the supplementary part of the invalidity pension from the amount of pensions in force on 1.1.2017.

According to the Social Insurance legislation the rates of basic pensions are reviewed at the beginning of each year in accordance with the percentage of revision of the basic insurable earnings. For 2018 the basic insurable earnings remained the same as in 2017.

Furthermore the Social Insurance legislation provides that 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) if it  is at least 1%. The average CPI in the second half of 2017 compared with the second half of 2016 declined 0.23%.

XI.             FINANCING

a.   No change

b.   No change

c.   No change

Answers to questions put to the Contracting Parties by the supervisory bodies of the Code and Protocol

Part III (Sickness benefit), Article 18(1) of the Code. Waiting period for self-employed persons.

The Government wishes to inform the Committee that for the persons protected it will use Article 15 (a) which covers prescribed classes of employees, constituting not less than 50% of all employees. In this respect the Social Insurance Legislation does not make any distinction between the various classes of employees. All employees are covered for the contingency of sickness and are entitled to sickness benefit. As noted before, for all employees the waiting period for the sickness benefit is three days as prescribed in Article 18 of the Code. Within this context the coverage is 100%.

Part VI (Employment injury benefit), Article 34 of the Code. Types of medical care.

In case of employment injury the medical care provided includes:-

(i)      Out-patient care by general practitioners and specialists care to both out-patients and inpatients,

(ii)     The necessary drugs and pharmaceutical material,

(iii)    Diagnostic and paramedical examinations,

(iv)   Hospitalisation,

(v)    Dental care, except for dentures which are provided to certain low income groups,

(vi)   Medical rehabilitation and provision of prosthetic and orthopedic appliances,

(vii)  Domiciliary visiting, in exceptional cases (for saving life or averting serious disability) and

(viii) Transport of the patient as his condition requires.

Article 35 of the Code. Prevention, rehabilitation and placement services.

The Department for Social Inclusion of Persons with Disabilities, under the Ministry of Labour, Welfare and Social Insurance implements the following measures for the re-establishment of persons with disabilities in suitable work:

• The Law for the Recruitment of Persons with Disabilities in the Wider Public Sector. According to this law a quota of 10% of vacant posts in public services is filled by persons with disabilities who satisfy specific objective criteria. Since 2010 when the Law was adopted, 125 persons with disabilities were recruited in the public educational and public service.
• The Scheme for Subsidizing the Establishment of Small Units for Self-Employment. 5-10 persons with disabilities each year create their own small business with a subsidization of up to €8.500 for purchasing furniture, equipment and working capital.
• The Scheme for Supported Employment. 20 programmes operate in all cities of Cyprus by NGO’s through which 270 persons mostly with intellectual and/or mental disability are employed in the open labour market. The subsidization to the NGO’s up to 13.000 per programme annually, concerns the employment of a job coach supporting a team of 5 – 25 persons with disabilities.

Part VII (Family benefit), Article 43 of the Code.    Length of the qualifying period of residence.

The Government wishes to inform the Committee that that payment of Child Benefit falls under the scope of the EU Regulation 883/04. According to the provisions of the Regulation, in case a claim for Child Benefit is lodged in Cyprus, the periods of lawful and continuous stay in the other Member States are taken into account in the calculation of the five year period of lawful and continuous stay of the claimant in the Republic.

Furthermore, according to Article 22(2) of The Right of Union Citizens and their Family Members to Move and Reside Freely within the Territory of the Republic of Cyprus Law of 2007 (Ν.7(Ι)/2007), no EU national is entitled to social benefits during their first three months of stay in the territory of the Republic of Cyprus. It should be noted that Law (Ν.7(Ι)/2007) has incorporated into the Cypriot legal system Directive 2004/38/EC of the European Parliament and of the Council.

Ιn view of the above any EU national, may apply for child benefit after the first 3 months of their stay in the Republic of Cyprus, and the periods of their lawful and continuous stay in any other Member State are totalized (with the period of stay in Cyprus).

Part XI (Standards to be complied with by periodical payments). Adjustment of pensions. Articles 65(10) and 66(8) of the Code.

Between 2013 – 2016, due to the financial crisis, the annual adjustment of the basic part of pensions was suspended, however the purchasing power of pensions was not lost due to deflation.  According to the Cyprus Statistical Service, the Consumer Price Index (CPI) which used as a base year the year of 2015, in 2013 the deflation rate was -0,4%, in 2014 it was -1,4%, in 2015 it was -2,1% and in 2016 it was -1,4%.  

Minimum Benefits

The Government would like to note that the Social Insurance Scheme provides minimum monthly benefit for statutory pension (old age pension), survivors’ pension and invalidity pension (100% invalidity) which for 2018 is €383.30 (including 13^th pension) for a single person and €474.31 (including 13^th pension) for the standard beneficiary. A single person receiving the minimum pension is entitled to €170 per month (12 months) on the basis of the Scheme supporting pensioners’ households with low income. As a result, a single pensioner with minimum pension receives a total of €553.80 which above the at-risk-of poverty threshold of 40% and above the Guaranteed Minimum Income (GMI) of €480. The level of minimum pension is determined on the basis of a decent standard of living.

The total amount of poverty threshold income of the household is calculated by attributing the following weights to household members:

•1 unit for every pensioner,

•0.5 unit for spouse, and any dependent over 14 years old

•0.3 unit for any other dependent under 14 years old

The grant is adjusted accordingly:

•1 unit for every pensioner,

•0.5 unit for spouse if no pensioner,

•0.3 unit for each of all other dependent members.

There is a ceiling of 3 units for each pensioner’s household.

Total household income must be below the poverty threshold which, for a household with one person, is set at €10,324 per year.

The minimum pension of a standard beneficiary plus the scheme for low income pensioners (one dependent) is €474.31 + €150= 624.31 or 46.76% of the reference wage of 1335 (2014 figure of 2018 technical note)

The amount of monthly benefit granted on the basis of Article 66 of the code with earnings of 1335 (2014 figure of 2018technical note) is 818.36 or 61% of the reference wage

Short term benefits do not have a guaranteed minimum level. The rate depends on the insurance conditions for every benefit. However, a beneficiary with a low income household is entitled to a supplement from the GMI scheme to extent that the social insurance benefit along with the supplement is €480 per month for a single person household.

The recently released 2016 EU-SILC data (reference year 2015) clearly indicate an overall improvement in the main social indicators in Cyprus.  In particular, the income inequalities, as measured by the Gini coefficient^[1], as well as the risk of poverty and social exclusion, as measured by AROPE^[2], improved considerably in 2016. In addition, the number of working poor presented a decrease from 9.1% to 8.2%, as well as the number of people living in conditions of severe material deprivation from 15.4% to 13.6%. On the other hand, the AROPE for children (0-17) and for the elderly (65+) increased by 0.7pp and 2.1pp respectively (AROPE children: 29.6%, AROPE (65+): 22.9%).  It is noted that despite the slight increase of AROPE for people aged 65+ during 2016, over the period of 2008-2016 Cyprus experienced the largest drop of AROPE rate for that group in the EU (it dropped from 49.3% to 22.9%).

The introduction of the GMI scheme in the second half of 2014^[3] played a major role towards the improvement of the poverty indicators, especially for the working age population (the long-term unemployed and working poor), which is the primary target group of the GMI.

The risk of poverty rate for the age group 18-64 decreased by 5%, from 15.9% in 2015 to 15.1% in 2016, and the Relative median risk of poverty gap for the same group decreased by 17%, from 21.8% in 2015 to 18.1% in 2016.

Based on the 2015 and 2016 EU SILC data respectively, it is noted that the household disposable income^[4], as well as its two main income components, i.e., the level of households’ working income and social transfers, remain rather stable between 2015 and 2016.  With respect to the households’ working income, it is also noted that the share of persons living in households with very low work intensity does not effectively change between 2015 and 2016^[5]. Based on the above analysis, one could conclude that with the introduction of the GMI, the social transfers became more effective in improving the poverty indicators.

Periods during which minimum benefits are paid should be normally be taken into consideration for the acquisition of the right for other social security benefits

With the exception of pensions, during the period for which a short term benefit is paid (at any level) the insured person is awarded with insurance credits which are taken into consideration for the acquisition of other benefits. In the case of unemployment benefit the unemployed person continues to receive insurance credits for a period of six months after the end of the period the benefit is paid (provided that he is still unemployed)

Part XII (Common Provisions), Article 68 of the Code. Suspension of Benefit

The suspension of survivors’ benefit is provided by Article 41(4) of the Social Insurance Law (N.59 (I)/2010. The benefit is suspended in case of re-marriage; however the widow is entitled to a lump sum equal to one year’s pension, excluding any increases for her dependants.

Concerning old age pension, the Social Insurance Law does not provide for its suspension, except in the case of fraud.

Furthermore, the amount of the pension is reduced when the dependant (spouse or child) is no longer eligible to be under this status and as a consequence the increment that was added is deducted. More precisely, the dependant spouse ceases to be considered as such when she becomes entitled to statutory pension or in case she is engaged in a gainful activity. The dependant child ceases to be treated as such upon reaching the age of 23 in case of a female and 25 in case of a male.