APPLICANTS for the minimum guaranteed income (GMI), introduced by the government earlier in the year, were found to own blocks of flats or have hundreds of thousands of euros in bank accounts, said Labour Minister Zeta Emilianidou last week. There had been cases of people that owned real estate worth more than a €1 million applying for the state handout, she said, adding that officials had also discovered cases of benefits being paid out years after a beneficiary had passed away.
Welfare fraud or abuse takes place in all countries that offer welfare to their citizens and Cyprus could not have been the exception. There are always people who try to squeeze money out of the state and do not think twice about using deception for this purpose. The labour ministry and the welfare services were bound to come across such cases as many thousands had applied for the GMI and there was bound to be a small percentage of cheats among them.
There is an extenuating circumstance in that for many years there was no means-testing. Child allowance was given regardless of a family’s income as was the student grant for university studies. During the Christofias presidency, which introduced the extra Easter pension, it was reported that even millionaire pensioners had received a cheque in the post.
Now that the state has no cash to throw around, the authorities have introduced means-testing, drafting a long list of criteria that applicants need to satisfy before they receive benefits. This is the sensible approach to welfare policy, the objective of which is to offer help to people on low or no income. Those with assets worth hundreds of thousands and no income, quite rightly, would not be eligible for welfare.
The minister said that there was now a system in place and applicants’ bank accounts and property holdings were being checked before an application for GMI was approved; it was the main reason for the delay in the processing of applications. Hopefully the commissioner for the protection of personal data will not decide that the authorities have been violating people’s personal data by looking at bank accounts and property holdings, because in Cyprus everything is possible. Such an issue could surface when the ministry prosecutes welfare fraudsters as Emilianidou said would be done.
The sweeping changes to the welfare system could not have been introduced without some implementation problems. One raised by the minister last week was the failure of 11,400 low-income pensioners to apply for supplementary benefit. This may have been because they did not know they had to re-submit applications or because they were unable to fill in the many forms required by the state. Perhaps the labour ministry should have a few desk clerks helping pensioners fill in their forms, because it would be self-defeating if low income pensioners did not benefit from the new system.