The government said on Tuesday it was on board with a proposal to amend the law on Guaranteed Minimum Income (GMI) so that low-income pensioners can receive the benefit in full.
The change will benefit some 1,000 pensioners, labour minister Zeta Emilianidou said.
MPs have drafted a bill where the 13th instalment of a pension is no longer deducted from GMI beneficiaries.
The proposal aims to fix the existing distortion, where the amount paid as the 13th instalment for the previous year was partly deducted each month from the GMI allowance.
For example, if a person’s 13th pension instalment came to €360, the government would then deduct €30 monthly from each of their 12 GMI allowances.
In another example, where a pensioner received a cheque from social insurance for €478, as well as €125 for the low-income pension – known as the ‘small cheque’ – the government would subsequently cut one-twelfth (or about €40) from their GMI monthly allowance.
Under the core GMI law, pensioners who also receive the ‘small cheque’ are entitled to GMI provided they have no other income even if the two cheques combined add up to an amount that is higher than the designated GMI level.
If a person’s main pension is lower than GMI only this pension is taken into account and he or she is eligible for GMI.
With the legislative proposal, the 13th pension instalment will no longer be calculated toward GMI.
Another tweak to be introduced to the benefits system relates to the ‘Christmas bonus’ given to low-income households.
With the change, the 13th pension instalment will be offset against the Christmas bonus.
For instance, if a person receives €300 for the 13th instalment, and the Christmas bonus set by the government happens to be €400, beneficiaries will receive only €100 as a bonus so that the total combined amount does not exceed €400.
GMI was introduced in 2014, replacing the previous system of public assistance allowance.
To be eligible, people must be Cypriot citizens over 28. They must not have over €5,000 in the bank or own property worth more than €100,000 – excluding primary residences.
Also on Tuesday the House labour committee pressed the government to sort out the problem of facilities for people with special needs aged 21 and above.
The committee highlighted the fact that these people receive care either in psychiatric wards or in old people’s homes.
The labour minister said she was working on a plan which would include supported care at home.
Parliament gave government until May to come back with concrete solutions.
The government meanwhile has tabled to the committee a bill which would impose stiff penalties on employers found to discriminate against non-Cypriot EU nationals, for example by paying them lower wages.
Greens MP George Perdikis, who supports the bill, said the current situation was doubly wrong, in that non-Cypriot EU nationals are not treated fairly, while at the same time employers often prefer not to hire Cypriot workers.