The basic pension rate is set to increase by four per cent from the beginning of the new year, Labour Minister Yiannis Panayiotou said on Friday.

Panayiotou was addressing the House of Elders and said a decision had been made at the last cabinet meeting to activate the provisions of the social insurance fund to boost pensions from the new year.

He added that this is proof that “the way the social insurance fund is structured allows for a sustained, gradual, and financially sound improvement in pensions.”

To this end, he said the government will issue a decree next week regarding the pension increase.

Beyond this increase, he said the government is planning to reform pensions in 2025.

He said these reforms will take place “through social dialogue, on the basis of scientific data, and making use of internationally accepted good practices.”

He added that the planned reforms “will make the pension system even better” and bring it into line with international standards.

In addition, he said he had listened to pensioners’ concerns regarding the beginning of pension payments, saying he had “accelerated the period that must elapse from the moment someone turns 65”.

He added that under the accelerated system, people now begin to receive pension payments within one month of turning 65. He also said that by the end of the year, he will ensure this provision also applies to those who retire before the age of 65.

Meanwhile, he also mentioned the government’s ongoing efforts to slash the 12 per cent reduction in pension payments for those who retire early should they have made 40 years of social insurance contributions.

He also mentioned the possibility of implementing a widower’s pension, which would work in the same way as the existing widow’s pension. He said he had ordered a study into the potential costs of such an initiative, so that men who were widowed before 2018 can claim the pension.

Deputy Welfare Minister Marilena Evangelou also spoke at the House of Elders, making reference to the government’s decision to draw up a “national action plan for the third age”.

She said the plan’s development aims to “develop sustainable practices for social integration, healthy ageing, inclusion, socialisation, and the provision of quality support and care services.”