InsiderEconomyPublic servants to contribute 1.8% to NHS

Public servants to contribute 1.8% to NHS

A cut of 1.7% plus 0.10% is expected to be the contribution of public servants to the island’s National Health Scheme Fund as of March 1, according to a circular issued by the Treasury of the Republic of Cyprus and sent out to all independent agencies.

The government and trade union officials seem to have agreed that in the first phase of the NHS, civil servants’ cuts will be in the range of 1.7% and 0.10%, covering inpatient care. This is something that PASYDY (public servants union) Secretary General Glafcos Hadjipetrou has  confirmed to Phileleftheros.

However, Finance Minister Harris Georgiades said that “the issue is still under consideration”. Today, civil servants contribute 1.5% of their salary to health care. The Treasury will be responsible for withholding the NHS contributions from civil servants as well as from state officials. That is, public servants will be contributing 1.8% of their income as of March 1 and for one year, while private employees will be contributing 1.7%.

On the other hand, employers will have to pay 1.85% (on the income of each employee separately) and the state 1.65%. Moreover, as of March 1, 2020 – that is, three months before the full implementation of the NHS- the Treasury’s circular points out that public servants’ cuts will increase to 2.65%. This will also apply to private employees, pensioners, rent receivers and state officials.

In addition to their own contributions, employers will also pay 2.9% for each employee while the state will be putting in 4.55% for each employee. It is noted that cuts for contributions to the NHS will come out  from a citizen’s total amount of income. That is, it will be the same as in the case of income tax payment where payers declare their revenue beyond earnings but also from other sources, such as rents.

As the Treasury notes in the circular, “from 1/3/2019 a cut of 1.70% should be deducted from the source, rent and interest payments where the beneficiaries are natural persons”. At the same time, it points out that “according to legislation, this percentage will be revised as from 1/3/2019 to 2,65%”. And that this cut will be additional to that for the special defence contribution.

The collected contributions will be transferred to the Health Insurance Fund that will operate under the Health Insurance Organisation.

By Eleftheria Peizanou


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