Cyprus Mail
Opinion

Our View: Why pay social insurance when civil servants pay half?

Lawyer Michalis Paraskevas

LAWYER Michalis Paraskeva, who has been charged for refusing to pay his social insurance contributions for nine months, is not the first or last person to appear in court for this reason. Every day, hundreds of people appear in the courts for not having paid their social insurance; they are usually given some time to settle and when they have done so they are fined, over and above the extortionate interest charged by the government for the delay. If they fail to pay within the time allowed by the judge they could end up in prison.

Paraskeva, however, is not of those not paying because he does not have the money. He is not paying because he wants to make a point about the government’s colossal debt to the Social Insurance Fund (SIF) which currently stands at €7.2 billion, a little less than half the country’s annual GDP. He points out that the Troika had proposed writing off this debt and believes that if this had happened the SIF would collapse. The funny thing is that even if the debt was not written off, where would the Cyprus state find the money to repay it? This is a state that depends on Troika handouts to meet its financial obligations and as a government source told this paper last week, the government was never going to pay the money back anyway.

Taking the money from the SIF is apparently standard practice in most states and the funds taken are recorded as debt, which essentially would never be paid back. As long as enough money is paid into the fund every year to cover the state’s pension and other social payments, the government is happy and feels no need to even pay interest on its debt. This is the reason the state is so tough on all individuals and businesses that delay making their payments to the Fund and also the reason why Paraskeva does not stand a chance of winning his case.

Alternatively, the lawyer could argue that he refuses to pay his contributions, because not all citizens of the Republic are treated equally. Until three years ago, public employees were contributing nothing from their salaries to the SIF, because they had supposedly negotiated for the government to pay their contribution – the government never paid (a contributing factor to the huge debt) – while now, the percentage docked from their salaries is half what is deducted from private sector employees. But they still receive monthly state pensions that are twice as high as private sector workers who have paid much more into the SIF during their working life.

Perhaps, Paraskeva should focus his attention on this injustice. He should argue that he refuses to pay his monthly contribution because the state does not treat all its citizens equally. We are sure there would be thousands of people backing him if he campaigned for equal treatment of all citizens by the state.


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