Insider Economy Gradual depreciation of early pension’s ‘penalty’  

Gradual depreciation of early pension’s ‘penalty’  

The Labour Ministry is examining ways to gradually abolish a 12% ‘penalty’ imposed on those who retire earlier – at the age of 63 rather than at 65.

This is what Minister Zeta Emilanidou on Monday told House Finance Committee members looking into the Ministry’s 2020 budget.

She also said that instructions have been given for a specific actuarial study to be conducted on this. “What we are considering is for the 12% (cut) to be depreciated at a certain age, for example after a retiree is 70 or 72 years old.”

The actuarial study will show whether phasing out this measure will have an impact on public finances, she added. It will also consider whether additional contribution to the Social Security Fund will be needed to mitigate the possible impact.

The 12% ‘penalty’ was a measure imposed by the Troika of Cyprus’ lenders at the time when an austerity MoU had been implemented. With the implementation of this measure, the state saves €100 million annually and it was among those taken to ensure the Social Security Fund’s viability.

Emilianidou said it was wrong to call the 12% cut a ‘penalty’ because it is actually an actuarial reduction in pensions. At the same time, the introduction of widow’s pension paid to men comes in effect the latest as of January, she added.

Beneficiaries are men whose spouses passed away from January 1, 2018 onwards and the Ministry is at the final stage now of reviewing applications. Due to the unconstitutionality of the previous bill, beneficiaries will receive pensions retroactively.

In addition, ongoing discussions on the setting by law of a national minimum wage will be completed by the year’s end. And the Ministry will be expected to conduct a dialogue with social partners. Studies on this hot issue were carried out in cooperation with the International Labour Office and the European Commission.

Emilianidou has repeatedly sent the message that it will only be possible to legally set an overall national minimum wage after unemployment falls below 5%.


Read more:

Top Stories

WHO reports record daily increase in global coronavirus cases

The World Health Organization reported a record increase in global coronavirus cases on Sunday, with the total rising by 230,370 in 24 hours. The biggest...

Seven new Covid-19 cases on Sunday

  Seven people have tested positive for coronavirus after 1176 tests, the Health Ministry said on Sunday. Five of the new cases were detected from 301...

Nicosia: Biker in critical condition after collision

  A 19 year old biker is in critical condition in hospital after his bike was involved in a collision with a car on Nicosia's...

Yellow alert for third day in a row

  The heat wave is set to continue tomorrow, with the Met Office issuing yet another extreme high temperature warning -- the third in a...

Any prospects for resumption of Cyprus talks would require termination of Turkish provocations

    Any prospects for the resumption of UN-led talks for a settlement to the Cyprus problem would require the termination of the Turkish provocative violations...


Kolokasi (Taro Root)

Ingredients: (Serves 4) 1 kg kolokasi (taro) root ½ kg pork (lean belly pork or shoulder) cut into large cubes 6 tbsp olive oil 1 head of fresh celery,...


Moungra is a traditional Cypriot mezze which consists in cauliflower pickled in fermented bread dough and typically served as an appetizer or meze. It...

Cheesy Eggplant Rolls

Ingredients 4 Eggplants 2 tbsp olive oil 1 chopped onion, 2 grated carrots 1 garlic clove (sliced) ¾ of the cup finely chopped canned tomato, ½ ts sugar 1 ts oregano 2 tbsp...

Black eyed peas with chard (Louvia me laxana)

Ingredients: 2 cups black eyed peas small lemon (juice) + 1 tsp lemon zest 1 bunch Cypriot chards olive oil & lemon for serving salt & pepper Method: Step 1 Put the...