Cyprus government proposes reforms to child benefits and pension credits

The Cypriot government has submitted a bill to the House of Representatives aimed at increasing child benefits and expanding the number of eligible beneficiaries. This move seeks to address inflation and historical flaws in the system where minor income increases previously resulted in a total loss of benefits. If passed, the reform is expected to benefit 17,000 additional families and 23,500 children, with an annual state cost of €12.5 million. The target implementation date for these changes is January 1, 2027.

In a separate development, Minister of Labour and Social Insurance Marinos Mousiouttas announced that the government has incorporated a proposal from the Democratic Alignment (DEPA) party into upcoming pension reforms. This amendment increases the duration for which the state covers social insurance for mothers staying home to care for children. While previously capped at three years for the first three children, the new provision extends coverage to four years for the fourth child and five years for the fifth, potentially reaching a total of 28 years of recognized social insurance time. Additionally, the Minister indicated that the government might modify or remove a controversial proposal to impose social insurance contributions on dividends.