The biggest pension hike in three decades was approved on Friday by the cabinet with an increase in the basic allowance by 5.94 per cent and in the supplementary amount by 1.49 per cent effective as of the end of January.

According to Labour Minister Yiannis Panayiotou, the monthly amount of the full basic pension is set to rise from €483.77 to €512.50.

The minimum pension, applicable to those without dependents, will increase from €411.20 to €435.62. This will benefit more than 14,000 people, he said.

Additionally, beneficiaries of the social pension will witness a boost from €391.85 per month to€415.13. Almost 18,000 will benefit from this hike, Panayiotou added.

The increases are the highest since 1996, he said.

“In other words, the positive course of the Cypriot economy and the consistent implementation of the people-centered government policy bring results that significantly improve the everyday life of citizens,” the minister added.

“The adequacy of pensions and salaries is gradually being strengthened and this positive course will continue.”

Wages, he said had increased on average in 2023 more than they had increased in the previous 30 years, and this led to higher contributions flowing into the social insurance fund of around 6 per cent.

When asked whether this increase was a result of legislating to increase the minimum wage, Panayiotou said the law provides that there is a procedure and a formula to calculate the incoming and outgoing contributions that allowed for the pensions increase.

“In accordance with this, the increases in wages identified through social insurance contributions are of such a magnitude that they lead to an increase in the amount of social insurance pensions,” he said.

“The increase in salaries according to the amount of insurable earnings for which insurance contributions are paid is the highest in the last 30 years and this is an important step towards strengthening the adequacy of salaries and pensions so that we gradually reach the point set by the government as a goal to achieve the strengthening of the adequacy of salary and pension earnings,” Panayiotou said.

But opposition Akel, slammed the government for patting itself on the back and claiming credit for the rise in the pensions.

“The minister of labour celebrates because he will implement the legislation on pension increases,” a brief statement said.

The party said the measures under which the pensions increased were decided in 1980 and have been implemented since then.

“The minister presented this as a success of the government,” Akel added.

“However, these increases were not given by the government. They are provided for in the legislation for twice a year.”

“The pension increases therefore result from the relevant legislation, which was enacted following struggles and demands of the pensioners’ movement,” Akel said.

The association of pensioners Ekysy agreed. In its own statement, it echoed what Akel had written.

“The first rise is in January and the amount of the increase is calculated based on an actuarial study of the two previous years based on the incomes of all contributors and the second in July, if the Cost of Living Allowance is calculated to be above 1 per cent,” Ekysy said.