News Local Hours before new lockdown, economy support measures announced - UPDATED

Hours before new lockdown, economy support measures announced – UPDATED

Hours before Cyprus goes into a new lockdown to quell rising covid-19 infections, the government on Saturday announced additional support schemes for affected businesses and self-employed people.

The fresh support measures include grants, payroll subsidies, loan repayment suspension, rent holidays and tax breaks and were announced jointly by Finance Minister Constantinos Petrides and Labour and Social Insurance Minister Zeta Emilianidou.

“The government is here to support the real economy, the employees and self-employed who have been affected by the worst economic crisis our country has encountered since the Turkish invasion in 1974,” Petrides said.

The direct assistance to businesses and self-employed hit by the pandemic provides for cash payments between €1,000 and €300,000 to be used for operating expenses, he also said. The payment will be calculated on the basis of turnover and reduction in business.

The allocated amount is €200 million with some 30,000 businesses expected to take part.

To be eligible, businesses must be permanently based in Cyprus, have their VAT settled and plan to re-open within this year.  The direct assistance also covers businesses that opened in 2020 and whose grant will be calculated on the basis of the average turnover in their sector.

Companies eligible for the grant are those who had a 35% reduction in their turnover compared with 2019 due to the Covid-19 pandemic.

The Ministry also announced that the Cabinet and the Central Bank of Cyprus approved a new six-month loan repayment holiday, covering loans collateralized with primary residence amounting to €350,000.

As well as business loans for companies or self-employed persons whose companies are under mandatory suspension of economic activity and loans associated with the tourism sector.

Furthermore, the package includes a two-month suspension (January and February) of the obligation to pay 70% of the rent for professional leases of companies and self-employed who are under full suspension of operations based on the Decree of the Minister of Health.

The schemes also include non-payment of rents to state and public organizations by private renters for January and February 2021, as well as the extension of the tax relief period to property owners who will make a voluntary reduction of rent in the period January-March 2021.

In addition, the Minister of Labour announced measures amounting to €130 million, aiming to cover labour cost for companies that will fully or partially suspend operations due to restrictive measures.

The main scheme, covering businesses that will be forced to suspend operation due to the lockdown measures, provides for a subsidy amounting to 60% of each employee’s salary.

Companies, she said, with up to 9 employees will be subsidized to 100% of their staff while for companies with over 9 employees the support will cover up to 97% of their staff.

A second scheme will cover the labour cost of companies that will enter a partial suspension of operation with support amounting to 60% of an employee’s salary.

The coverage ranges between 45% and 90% of the number of employees depending on the impact of reduction in turnover.

“We believe – and our effort is to avoid lay-offs and to overcome the pandemic and with the schemes launched by the Finance Ministry along with labour cost support – that the companies will be able to recommence economic activity and the employees to return to their jobs,” Emilianidou said.

The Ministry schemes also feature an allowance for a special leave, as well as a €500 allowance for those who have exhausted their unemployment benefit.

As well as an allowance covering 60% of the salary of persons who are obliged to stay at home to care for children below 15 years of age, as schools will shift to distant-learning.

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