Pension reform to raise payments, with largest gains for lower earners
Labour Minister Marinos Mousiouttas said all pensioners will receive increases under a planned reform, phased in over five years.
Nicosia, Cyprus. All pensioners will receive increases under the government’s planned pension reform, with those on lower pensions expected to benefit proportionally more, Labour Minister Marinos Mousiouttas said on Sunday. The reform would be the first major overhaul of the pension system since 1980.
Calculation of increases
In interviews with Phileleftheros and Kathimerini, Mousiouttas said the reform was designed to establish a fairer, more modern and sustainable pension system.
Increases will be calculated based on factors including years worked and contributions paid, with greater proportional support directed towards lower pension recipients.
More than 51,000 of the 123,212 current social insurance fund pensioners are expected to receive increases exceeding €100 per month, according to the minister.
Five-year implementation
The increases will be introduced gradually over five years. Pensioners currently receiving up to €600 will receive a minimum increase of €30 from the first month the reform takes effect.
Mousiouttas cited the example of a person with a full working life who currently receives a €504 monthly pension, saying their payment could rise by a total of around €250 over five years.
Allowances and retirement reduction
For pensioners who also receive the low-income pensioner allowance, the allowance may decline as their pension increases. Mousiouttas said their total income would not fall below current levels.
He said the reform alone would not ensure that every pensioner was lifted above the poverty line, adding that poverty could not be addressed solely through social insurance fund pensions. The targeted low-income pensioner allowance will therefore continue to be paid to eligible recipients.
On the 12 per cent actuarial reduction applied to people retiring at 63, Mousiouttas said it could not be abolished entirely because this would affect the fund’s sustainability and effectively lower the retirement age from 65 to 63.
This news item was generated automatically by Cyprus Inform from publicly available materials. Report an error →
