Low-income pensioners could see their pensions rise by as much as 50% under the government’s pension reform, Labour Minister Marinos Moushouttas has said.
Speaking on Omega, Moushouttas said increases would also apply to those retiring at 63, and set out how the reform would affect recipients of the so-called “small cheque,” the supplementary state support paid through the Deputy Ministry of Social Welfare. He cautioned that every pensioner’s case is different and that the changes should not be generalised.
Low pensions
The lowest pension currently stands at between 480 and 500 euros a month, Moushouttas said. In some cases, this could justify an increase of up to 50%, while in others the rise would be closer to 40%, 30%, 20% or 10%.
As an example, he said a worker earning 11,000 euros a year with a continuous employment record who currently receives a 500-euro pension could see it rise by up to 50%, to 750 euros. He said this would not apply to someone who had made contributions for fewer years.
“Small cheque” recipients
Moushouttas also addressed pensioners currently receiving the “small cheque.” He said someone getting a 500-euro pension plus around 220 euros from this supplementary payment would not see a full 50% rise overall, since part of the state support could be reduced as their pension increases. As a result, someone currently receiving a combined total of around 720 euros would move to between 820 and 830 euros.
Retirement at 63
Those who retired at 63 would also benefit, both from the general increases and from a reduction in the 12% penalty applied at that retirement age, Moushouttas said. He gave an example in which, if the penalty reduction were limited to 30%, the corresponding benefit would be added to the pensioner’s income.
Minimum pension
Moushouttas pushed back on figures circulated during the pre-election period regarding increases to the minimum pension. He said a figure of 1,088 euros had been mentioned for the minimum pension, adding that he wished it could reach 1,500 euros. Asked whether this was achievable without raising contributions or the retirement age, he said “there is no such possibility.”
Bill due in September
Moushouttas told the Cyprus News Agency (CNA) that the government aims to hand the reform bill to social partners in the second ten days of July, so that substantive discussions can begin.
Asked, ahead of a meeting with the board of the Nicosia Chamber of Commerce and Industry, whether talks would continue over the summer, Moushouttas confirmed they would, saying the bill is due to be tabled in parliament in September. In the two and a half months before then, he said the aim was “to find convergences, if we can, so we can move forward.”
Moushouttas said the bill would be tabled in parliament on September 20, regardless of the outcome of talks with social partners.
He said he would hold a round of meetings with parliamentary parties in the coming period, during which an actuary would explain the bill’s technical details, so that by September the parties would be able to weigh its advantages and disadvantages and raise any proposals or concerns.
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