Cyprus Mail

GMI misses July 1 deadline

Labour minister Zeta Emilianidou

By George Psyllides

LABOUR Minister Zeta Emilianidou said there would be delays in paying people the Guaranteed Minimum Income (GMI) after its approval has been delayed as discussion on the bill is dragging on in parliament.

MPs said the aim was to put the bill to the vote plenum before parliament closed for the summer on July 10.

According to the terms of the island’s bailout, the GMI should have been implemented on July 1.
The monthly GMI was set at €480.

Emilianidou said she would have meetings with the affected parties over the weekend in a bid to answer their questions and allay their concerns.

“I have asked all those who still have questions to send them to me and I have promised to answer all of them,” the minister said after discussion of the matter by the House Labour Committee.

Committee chairman, AKEL MP Andreas Fakontis, said the minister must tell them how she would raise €25 million to cover a shortfall in 2014 and a further €50 million for 2015.

Emilianidou had previously pledged that no taxation or cuts to existing allowances would be required, reasoning that in a government budget exceeding €5 billion it would not be hard to find €25 million, but AKEL appears unconvinced.
MPs are discussing each of the bill’s 39 articles.

Emilianidou said the bill was not retroactive and the payment will be made from the date a person’s application was approved.

The minister said there will be a delay in paying people since the bill was not approved on time.

She said any change in the articles would affect the system, which could not go on line before the final provisions were known.

GMI is to replace all social welfare benefits – with the exception of allowances to the handicapped, single-parent families, student and refugee aid, as well as child support. Key eligibility criteria include income, bank deposits, value of property owned, and number of dependents. Applicants with bank deposits exceeding €5,000 – the amount increasing by €1,000 for each dependent – will be disqualified, as will owners of immovable property valued at €100,000 or more.

GMI has been set at €480 per month to individuals without work, plus add-ons for dependents and state contributions for rent and municipal taxes. The figure was reached after calculating the ‘decent living standard’ which factored in the price of basic foodstuffs, clothing, transport and electricity.

The labour ministry estimates that some 90,000 persons could potentially be eligible for GMI. For the remainder of this year (July through December) the cost has been estimated at €255m.

Dividing €255.5m by 90,000 eligible persons gives €2,838 over a six-month period, or €473 per person per month.
Emilianidou said also a national registry will be created listing all persons receiving benefits, which benefits they receive and their financial standing.

Under the 2014 national budget, total welfare spending was set to be slashed to €836m from €962m in the previous year. The item takes up a substantial slice of government expenditures, which for 2014 come to €7.75bn.

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