Cyprus Mail
Cyprus

SIF could go bust if unpaid dues not collected

By Elias Hazou

THE Social Insurance Fund will go broke if legislation is passed sparing laggards of the threat of doing jail time, officials warned on Wednesday.

Two parties – EVROKO and the Citizens Alliance – have tabled bills that would let off the hook people not paying their social insurance contributions.

The first proposal envisages freezing until 2017 the issuance of prison warrants, for amounts due up to €1,000. The latter stipulates that court decisions imprisoning people for dues to the state be suspended for a year.

But officials from the Social Insurance Department said experience has shown that the absence of punishment only encourages people who can pay, not to.

“If the fund is unable to collect, how will it pay out unemployment benefits or pensions?” one official warned.

Such a move would also burden an already under-staffed department with more administrative work.

On the Citizens’ Alliance proposal, the Tax Department said that since 2014 the means of collecting dues do not pass through the courts.

Under a law passed in June 2014, authorities are now able to seize bank accounts for tax arrears of €3,000 or more.

And for tax dues of €5,000 and above, a person’s movable property is confiscated or held. But according to the same tax official, property seizures are currently unenforceable, because parliament has not passed the relevant ordinances.

According to data recently disclosed in parliament, dues to Social Insurance stood at €100m, of which €3.5m were owed by 18 companies, and €2.5m by professional sports clubs.

Ruling DISY, meanwhile, plans to submit its own proposal that would likewise keep non-payers out of prison.

According to DISY, each inmate costs the state some €80 per day, so jailing people for these offences is not cost-effective.

Their proposal would also look at expanding the practice of community service in lieu of doing time behind bars.

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