Cyprus: Amendment of law on minimum guaranteed income

Legal amendments that allow more people in Cyprus to benefit from the minimum guaranteed income scheme came into force in August 2015. The government estimates easing the eligibility criteria will cost €11 million. Approximately 20,100 households had been approved for GMI benefit by November 2015, two months before the application deadline.

On 9 July 2015, the Cypriot House of Representatives amended the 2014 law on Minimum Guaranteed Income (GMI, in Greek)  so that more people could apply for the scheme. The amendments were incorporated into one law (in Greek). The Minister of Labour, Welfare and Social Insurance stated that easing the criteria would cost an extra €11 million. According to  data published by the Ministry, by November 2015, two months before the application deadline, approximately 20,100 households had been approved for GMI benefit. 

Changes to rules on eligibility

The definition under the scheme of people with disabilities has been extended to cover anyone with moderate learning difficulties: now, people previously excluded from the scheme, such as those with Down Syndrome, may apply. 

People up to the age of 28 may also now apply, provided that they were in care at the age of 18 and if the Director of the Social Welfare Services agrees that they are in need of such support.

A new category has been added for people in special circumstances (to be verified by welfare officers). For example, a mother who is neither Cypriot nor an EU national, but has children with a Cypriot father, is now eligible. And if an applicant’s spouse is in sheltered accommodation, the allowance for that accommodation will not be included when calculating the applicant’s GMI.

People who are unable to apply personally for GMI due to their mental, psychological or physical condition will no longer need a court order to enable a representative to file an application on their behalf.

Income calculations – new rules

Now, pensions are calculated as income from the month when pension payments to the pensioner began.

The monthly honorary grant awarded to people holding an Award for Excellence in Letters and Arts from the Ministry of Education and Culture will no longer be calculated as part of the applicant’s income.

Changes in real estate and financial assets criteria

As part of the changes, no account will be taken of real estate valued up to €100,000 if all or most of it cannot be financially exploited because of legal encumbrances (and if these were in place before 11 July 2014). The rules regarding the size of the property have also been reviewed. Previously, a couple could be eligible for GMI if they owned a primary residence no larger than 150 square metres, and a family if they owned a house of no more than 300 square metres. Now, anyone with a house of up to 300 square metres can apply. And people with disabilities who are paying an amount of rent greater than the maximum set out in the law will be eligible for a 20% increase in their rent benefit.

Financial assets of up to €20,000 are not taken into account if the money:

  • is needed to pay for therapy, rehabilitation or treatment of health problems of people with disabilities;
  • was frozen (before 11 July 2014) as security for a loan;
  • involves a scholarship and/or a student loan;
  • is in a child’s account (and was placed there before 11 July 2014);
  • is in a child’s name and originated from an inheritance, right to inheritance or collection made for the child;
  • is held in a joint account with the applicant's elderly retired parent or another member of the family, provided that such money originated from an account holder other than the applicant.

The head of the Service for the Administration of Welfare Benefits can now take into account transfers of large assets up to one year before the original GMI legislation came into force.

Definition of family unit

The amendments also set out who can be regarded as part of the family unit. On the basis of Article 15, a family unit includes:

  • a wife/husband;
  • children (from minors up to 28 years of age).

However, any of these family members can be treated as separate applicants with the agreement of the relevant officials.

Procedural matters 

Adjustments have been made so that people whose applications have yet to be processed or have been rejected can appeal rather than re-applying from scratch.

The deadline for filing a complaint against rejection has been extended from 30 to 60 days after notification of the decision, or 60 days after the date that the GMI amendments came into effect.

The deadline for examination of the complaint by the Minister remains at three months; however, the Minister can take up to three months longer to consider a decision, if necessary, instead of a maximum of one extra month.

Those on low pensions who did not apply on time will be given another chance to do so if they can show they failed to meet the deadline because of insurmountable personal reasons or serious health problems.

Reactions of the social partners

Overall, the social partners, political parties and other social organisations have welcomed the amendments. 

The trade unions’ main criticism centres on the exclusion of the long-term unemployed. Meanwhile, the Cyprus Paraplegic Organisation (CPO) has asked for additional assistance for people with severe motor disabilities, and an increase in the €20,000 deposit eligibility threshold for the wheelchair-bound. There were no specific reactions from the employer organisations. 

 

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