The inclusion of a proposal by the Democratic Party (DIPA) in the pension reform, which provides for an extension of the period during which the state will “provide” social security benefits to mothers of large families who stay at home to care for their children, was announced by the Minister of Labor and Social Security, Marinos Mousiouttas. At the same time, the minister left open the possibility that the provision imposing contributions on dividends could be modified or even removed entirely from the bill.
The statements were made following a meeting Mr. Mousiouttas had with the President of DIPA, Mario Karoyan, and party officials on Friday afternoon, during which the aspects of the upcoming pension reform were discussed at length.
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Analyzing the new proposal, Mr. Mousiouttas explained that the government accepted DIPA’s recommendation, which, in his words, provides for “an increased subsidy” to further recognize the role of large families.
Specifically, while the bill already provided, as he said, that the state would grant Social Security benefits for three years for the first, second, and third child of a mother, following the DIPA’s proposal, this period will be extended to four years for the fourth child and five years for the fifth, reaching up to 28 years. “It was brought up during our internal discussion that we should explore whether we can make an exception for the fourth or fifth child, and we find that to be very reasonable,” noted the Minister of Labor.
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“You see,” Mr. Mousiouttas added, “a mother—and especially a mother of many children—will not receive the social pension we used to know unless she works; she will receive a regular pension because she will have accumulated well over 15 years of service, especially those with many children. “So she will receive a regular pension as if she were employed, even though she is not working outside the home—she works at home to care for her children.”
“This is yet another innovation,” added the President of DIPA, with the Minister of Labor adding that the party had proposed—and the proposal was adopted—greater relief for large families as part of the tax reform.
When asked by a reporter about the issue of social security contributions, as provided for in the proposed bill, specifically regarding dividends—which has raised concerns in the business community, particularly among small and medium-sized enterprises— the Minister of Labor clarified that the current proposals do not represent a final position but are still being formulated.
He noted that everything will be finalized when the bill is submitted to the Cabinet in the coming days. “There are positives, and there are negatives. We’re not saying we have all the answers and can’t change anything. It’s one of the elements that’s still being worked out. It may, in the final analysis, turn out differently, or the issue of dividends may even be removed from the equation,” Mr. Mousiouttas stated.
The Minister of Labor reiterated that “the intention is—as I have stated for some time—for the pension reform to take effect on January 1, 2027.” The goal, as he emphasized, is “for people—our retirees—to feel the difference in their pockets, some a little and others a lot more, starting February 1 with the first payment they receive.”
At the same time, he explained that the round of meetings with the political parties is coming to an end so that “we can submit the bill to the Cabinet for approval in the coming days and then table it in Parliament.” He clarified, however, that “this does not mean that the dialogue is over,” as the Ministry remains open to daily meetings and discussions with social partners and organized groups.
For his part, the President of DIPA emphasized the need to move forward with changes to the pension system, with a view to protecting the vulnerable while also safeguarding economic stability.
“After 46 years of procedures and implemented policies, the time has come for a major reform,” stated Mr. Karoyan, adding that this effort “cannot, of course, be achieved through words, slogans, or populist approaches.”
The President of the DIPA stated that increasing pensions for low-income retirees is a declared goal and noted that, at the same time, the sustainability of the Social Insurance Fund must be ensured.
“I don’t think anyone wants to undermine the state’s financial capacity, nor do I think anyone wants to put certain things at risk. So, however, we must acknowledge this, and this is where we need to strike a balance. There are segments of our population with low incomes, and now is the time to support them through this reform,” said Mr. Karoyan.
“Our goal,” he added, “is to increase them without undermining or jeopardizing what we have all managed to achieve in terms of economic resilience, as well as the prospects for the Cypriot economy and Cypriot society.”
In conclusion, Mr. Karoyan announced that his party had submitted a document containing reasonable questions and recommendations to the Ministry, while he also announced that the party would seek a series of meetings with social partners in the immediate future, in order to establish a broader framework of consensus regarding pension reform.
Source: KYPE
