Cyprus state to refund 5 million euros to public employees after court ruling

The Cypriot state is required to refund more than 5 million euros to 225 unmarried and childless public sector employees following a ruling by the Supreme Court. The court determined that the government's failure to return periodical pension contributions to these individuals upon their retirement constituted a deprivation of property rights.

Historically, public sector employees contributed to a pension fund intended for their surviving spouses or dependent children. Employees without such dependents were traditionally reimbursed for these contributions upon retirement. However, following fiscal consolidation measures introduced in 2012 as part of the memorandum, the government ceased these refunds, prompting legal action from affected retirees. The court ruling applies to all employees who retired on or after January 1, 2012.

In response to the judicial decision, the House Finance Committee is currently reviewing a bill designed to restore the refund provision. A representative from the Treasury confirmed that they have sought legal advice, which mandates compliance with the court's judgment. Under the proposed legislation, eligible employees will be required to submit their claims for reimbursement within a period of 12 months following their retirement.