TWENTY SIXTH 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:  1/7/2018 to 30/6/2019

I.                   GENERAL

A.    Administration/Organisation

Organization

The following functions which were the responsibility of the central offices of the Social Insurance Services have been decentralized and assigned to the district offices:

In order to create synergies between different sections of the Social Insurance Services the unit which examines pensions on the basis of the national legislation and the unit examining pension on the basis of Regulation 883/2004 for the coordination of social security systems and on the basis of bilateral agreements have merged into one unit

Payment Methods

Around 20% of employers and self-employed persons currently use the online payment service. Realizing the benefits of this service in respect of efficiency and effectiveness and the need to reduce administrative burden further efforts are being made to improve the web service provided with the ultimate goal of all payments to be made over the internet.

Computerization

. Upgrading of the Social Insurance Services (SIS) Data Center to a Single Data Center  in the Ministry of labour Welfare and Social Insurance:

All of the Ministry's System Databases will be gradually integrated into one infrastructure. This will reduce operating costs over their prior licensing, while at the same time optimizing the Ministry's need for interoperability of all Databases in order to achieve a comprehensive analysis of all the information available to the Ministry. The Social Insurance Services have already proceeded with the transfer of the data (intranet and internet) and the application of more quality controls will be applied.

The transfer of the SIS System to the Single Data Center offers quality of service to the users and has increased the productivity of users as it ensures up to 20% faster completion of operations on the System. The transfer will also offer better management the system, reduction of troubleshooting time and lower maintenance costs.

In addition the use of data becomes safer as all data exchanged between the different Systems will be located on one Data Center.

The recruitment notification process has been implemented and is currently under testing. The analytical process will then be enriched with more details on the recruitment and details of the employee. In the second phase, additional modules will be implemented such as: termination of employment, employment changes / annual personnel schedule, employment contracts, etc.

Training

Information and other service to the beneficiaries

As of march 2019 the Social Insurance Services are tasked to collect contributions levied on wages and pensions on behalf of the Health Insurance Organization for the General Healthcare System which came into effect in June 2019. To this extent the Social Insurance services launched an information campaign to inform the public about their responsibility to pay contributions for the General Healthcare System

B.     Benefits

II.                MEDICAL CARE

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

III.             SICKNESS BENEFIT

IV.             UNEMPLOYMENT BENEFIT

a.       No change

b.      No change

c.       No change

Consolidated Report

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

Injury benefit is payable to any employed person who is incapable of work as a result of an employment accident or occupational disease. The benefit is payable for up to 12 months from the date of accident or contraction of the disease as opposed to sickness benefit which is granted for six months (and is extended for another six provided that a medical board approves it and provides that the persons meets the insurance conditions).

In contrast to sickness benefit there are no insurance conditions that need to be satisfied. 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, is corresponding to such earnings.

V.                OLD AGE BENEFIT/STATUTORY PENSION

a.       No change

b.      No change

c.       No change

d.      As of 1/1/2019 the rate of the basic part of the statutory pension was increased by 0.42%. The increase in the supplementary part is equal to the increase in the average consumer price index in the second half of each year compared to the average in the second half of the previous year. However, the above increase cannot be greater than the increase in basic pensions. Accordingly, the rate of supplementary part of the statutory pension is increased by 0.42% on 1.1.2019.

VI.             WORK ACCIDENT AND OCCUPATIONAL DISEASE BENEFIT

a.       No change

b.      No change

c.       No change

d.      As of 1/1/2019 the rate of the basic part of the disablement and death benefit  was increased by 0.42%. The increase in the supplementary part is equal to the increase in the average consumer price index in the second half of each year compared to the average in the second half of the previous year. However, the above increase cannot be greater than the increase in basic pensions. Accordingly, the rate of supplementary part of the disablement and death benefit is increased by 0.42% on 1.1.2019.

VII.          FAMILY BENEFIT

Based on the amended law that was published on 28/7/2017 in the Official Gazette of the Republic  of Cyprus, 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. It should be noted  the the total assets of the family also includes 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 year 2019 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.

                iv.            The amount of the allowance will be adjusted by the percentage increase of the average automatic index adjustment, ie for 2019 they will increase by 1.5%

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.

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 the year 2019 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

Note: The amount of the allowance will be adjusted by the percentage increase of the average automatic index adjustment, ie for 2019 they will increase by 1.5%

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.      As of 1/1/2019 the rate of the basic part of the invalidity benefit was increased by 0.42%. The increase in the supplementary part is equal to the increase in the average consumer price index in the second half of each year compared to the average in the second half of the previous year. However, the above increase cannot be greater than the increase in basic pensions. Accordingly, the rate of supplementary part of the invalidity benefit is increased by 0.42% on 1.1.2019.

X.                SURVIVORS’ BENEFIT

a.       No change

b.      No change

c.       No change

d.      As of 1/1/2019 the rate of the basic part of the widow’s/widower’s pension and orphan’s benefit was increased by 0.42%. The increase in the supplementary part is equal to the increase in the average consumer price index in the second half of each year compared to the average in the second half of the previous year. However, the above increase cannot be greater than the increase in basic pensions. Accordingly, the rate of supplementary part of the widow’s/widower’s pension and orphan’s benefit is increased by 0.42% on 1.1.2019.

XI.             FINANCING

  1. Changes made during the reference period

As of 01/01/2019 the rate of contribution for employed persons was increased to 21.5%, of which 8.3% is paid by the employee, 8.3% by the employer and 4.9% by the state

The rate of contribution for self-employed persons was increased to 20,5%, of which 15,6% shall be paid by him and 4,9% by the State.

b.   No change

c.   No change

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

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

On 1st of June 2019 the General Healthcare System (GHS) was introduced

The main features of the system are:

·         Universal coverage of the population

·         Equal and equitable treatment of all beneficiaries

·         Provision of a comprehensive package of healthcare services

·         Freedom of choice of provider by the beneficiaries

·         Social reciprocity

According to the provisions of The General Healthcare System (Amending) Law of 2017, that the GHS shall be implemented in two stages.

The first stage of GHS implementation, beginning June 1st 2019, provides for the introduction of outpatient healthcare, i.e. the provision of healthcare services by personal doctors and outpatient specialists, pharmacists and laboratories on June 1st, 2019.

The second and final stage of GHS implementation, beginning June 1st, 2020, includes introduction of all the remaining healthcare services, i.e. inpatient healthcare and services, services offered by allied health professionals (clinical dieticians, occupational therapists, speech pathologists, physiotherapists, and clinical psychologists), nurses and midwifes, the accident and emergency departments, ambulance services, dentists, palliative healthcare services and medical rehabilitation services.

The collection of the contributions for the first stage will start on March 1st, 2019 and for the complete implementation of the GHS on March 1st, 2020.

More information regarding this question of the Committee will be provided in the next consolidated report

Information on GHS:

https://www.gesy.org.cy/sites/Sites?d=Desktop&locale=en_US&lookuphost=/en-us/&lookuppage=home-en

Part VII (Family benefit),

Article 43 of the Code.    Length of the qualifying period of residence.

The Committee reiterates that the five year qualifying period established for family benefit under the national legislation goes beyond the maximum qualifying period set out in Article 43 of the Code and once again requests the Government to reduce the period of residence to no more than six months.

Cyprus is partially in conformity with the Code as regards the Council of Europe Member States who are also European Union members, in view of the fact that EU citizens can apply for child benefit after 3 months of residence in the Republic, as foreseen by Regulation (EC) No 883/2004 of the European Parliament and of the Council. 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 European Union 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.

As regards the rest of the member states of the Council of Europe who are not European Union member states, we intend to examine ways to solve the issue.

The Committee requests the Government to indicate how many families with children do not receive child benefit because of the imposition of the five year qualifying period of residency, what benefits are provided to families with children that do not complete the required period of residency, and explain measures taken or envisaged to reduce poverty rate among children.

There are no available statistics for this at present.

Article 68 of the Code. Suspension of benefit.

The Committee requests the Government to indicate the grounds for the suspension or reduction of benefits provided under Part VII (Family benefit) of the Code.

Income and or property criteria as well as composition of family are the reasons for the suspension or reduction of benefits. The permanent residency of the family or member of a family to another country is also a reason for suspension.

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

The Committee would like the Government to explain its current aims and priorities in extending the said basic income security schemes and guarantees to the still unprotected categories of the population with a view to the sustainable improvement of poverty indicators.

The Government would like to point out that the improvement in the main indicators in Cyprus in respect of poverty continues and the indicators are comparable to the EU average with some indicators falling above and some falling below the EU Average.

The recently released 2018 EU-SILC data (reference year 2017) clearly indicate an overall improvement in the main social indicators in Cyprus in line with the improvement of the economic performance in the country (drop in unemployment and wages improvements). In particular, the income inequalities, as measured by the Gini coefficient as well as the risk of poverty and social exclusion, as measured by AROPE, improved considerably in 2017 dropping from 32.1% to 30.8 and from27.7% to 25.2% respectively. In addition, the number of working poor as well as the number of people living in conditions of severe material deprivation decreased from 8.2% to 7.9% and from 13.6% to 11.5% respectively. In respect of risk of poverty of children, the trend is reversed with the risk of poverty for children (0-17) dropping from 29.6% to 25.5%.

It is also noted that the AROPE for the elderly (65+) increased slightly by 1.7pp (from 22.9% in 2016 to 24.6% in 2017), compared to its significant drop by 24.7pp over the last decade (from 49.3% in 2008). The following two factors contributed considerably towards the above improvement and are expected to continue contributing positively towards the poverty indicators for the elderly in the near future:

i) The maturation of the social insurance pension system, which was introduced in the ‘80s and thus the old-age pensioners, particularly those at higher ages, retired before completing full years of contribution. Poverty among the elderly declines over time in proportion to the decline of the share of those people in the total old-age pensioner population.

ii) The anti-poverty effect of the current non-contributory minimum income provisions of the national social security pension system, supporting low-income pensioner.

Furthermore the Government intends to include in social benefits more beneficiaries and population groups which are poorly represented such as pensioners with low incomes, people with disabilities or other vulnerable groups.

For instance, actions are being taken for the provision of a disability allowance to children who are certified as persons with moderate disability and are in need for early childhood intervention services.

The Committee hopes that the Government will continue to take measures aimed at reversing the negative trend in poverty, particularly for children and the older people, and provide statistical data on poverty rates and other main social indicators.

The Government aims to improve negative trends noted in the above groups. For example:

·         Actions are being taken for the provision of a disability allowance to children who are certified as persons with moderate disability and are in need for early childhood intervention services.

·         Recently increases have been provided for the benefit granted in accordance to the Scheme supporting pensioners’ households with low income

.