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Cyprus

Minimum guaranteed income scheme ‘on track’

Labour Minister Zeta Emilianidou

By Angelos Anastasiou

Preparations for the implementation of the Minimum Guaranteed Income (MGI) scheme continue as planned and will be ready for initial deployment on July 1, 2014, Labour Minister Zeta Emilianidou has told deputies.

The MGI policy, slated to replace several of the currently inefficient social welfare benefits, will ensure a minimum income to every citizen, whether unemployed or low-income earner, following calculations by the government of what constitutes ‘decent living’ in Cyprus.

Addressing the House Labour committee, Emilianidou said that the current social welfare system did not serve vulnerable groups and those truly in need, noting that the aim is the total overhaul of the social welfare policy with a view to “helping all those truly in need.”

Emilianidou laid out the policy’s basic principles, adding that the details would be finalised following public dialogue, and explained that the MGI scheme comprises three distinct elements.

The first element is the ‘consumer’s basket’, including items of foodstuff, clothing, footwear, transport, electricity, heating etc. According to Emilianidou, the mean cost of these items has produced to the average cost of decent living in Cyprus.

“The basket is differentiated according to the make-up of each family, taking account of dependents,” she said. “Needs have been costed and will be announced after the public dialogue has been concluded.”

The second element of the MGI is the cost of rent for non-homeowners, which is also subject to differentiation according to family make-up. Emilianidou explained that scientific research has determined the cost of rent in each district, and that the cost of loan repayments on primary residences will be calculated similarly.

The final element comprising the MGI reflects municipal taxes and related costs, including water connection charges and immovable property fees.

“Essentially, the MGI will include population groups that have thus far enjoyed no state protection, like the self-employed, the low-wage earners, and the long-term unemployed,” Emilianidou said.

According to the Labour Minister, the second leg of social welfare reform relates to the restructuring of the way services are rendered by the Social Welfare Department, and said the MGI will be administered by a separate service so that its officers are able to help and support those truly in need individually.

Speaking after the session, deputies lauded the government’s initiative but expressed some doubt with regard to its ability to secure the required funding for the MGI. Emilianidou had assured the committee that the government is confident it will manage to find the money to fund the policy, while President Anastasiades has previously explained that a single centralised welfare agency managing the MGI will result in cost savings arising from indiscriminate and wasteful welfare spending cuts.

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