Serious shortcomings in the administration of the Minimum Guaranteed Income (MGI), with benefits paid out for several years without a final review of applications, inadequate checks on income and assets, as well as cases of beneficiaries who were ultimately found to have submitted false information, are documented in the new report by the Audit Office. The findings raise serious questions about the effectiveness of government oversight mechanisms, the protection of public funds, and the state’s ability to ensure that financial support reaches the actual beneficiaries.
Special Report EU-EY 33/2026, published on November 11, reveals cases of long-term payments of the Universal Basic Income (UBI) under a pre-approval scheme, applicants with bank deposits totaling €679,024, as well as beneficiaries with real estate valued at up to €811,400. At the same time, serious shortcomings were identified in record-keeping, the integration of information systems, the investigation of complaints, and the staffing of control mechanisms.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
In the report’s preface, Auditor General Andreas Papakonstantinou warns that these weaknesses create an increased risk of public funds being paid to individuals who are not the actual beneficiaries, undermining the credibility of the social welfare system and limiting the ability to provide more effective and targeted social support.
242 applications without a final decision
One of the most significant findings concerns the prolonged payment of benefits under a pre-approval scheme, which is legally provided for as a temporary support measure until the review of an application is completed.
According to data submitted to the Audit Office on October 17, 2022, of the 252 applications under the pre-approval system, 242 involved cases in which the EEA had been paid for an extended period without a final decision. In 150 cases, the preliminary approval period lasted more than two years, while in 100 of those cases, it exceeded three years.
Despite the fact that in most cases the Welfare Benefits Administration Service (YDE) set a three-month deadline for submitting supporting documents, it was found that these deadlines were not met and no reminders were sent to applicants.
The Audit Office selected 11 cases of preliminary approvals for detailed review. In these cases, the amounts paid by the end of 2025 or the closing date for applications ranged from €21,887 to €131,973, covering periods of 57 to 129 months.
Of the 11 applications, seven were terminated following audits, among other reasons due to false information, failure to comply with job-search obligations, and lack of continuous residence in the Republic of Cyprus. The remaining four were definitively approved.
He received €102,528 based on false information
A typical example is the case of an applicant who submitted an application in February 2016, stating that he was separated from his spouse and was the father of three children.
His application was placed on preliminary approval status in January 2017, with a requirement to submit additional information within three months. However, after April 2017, there was no substantial progress in the case.
The applicant continued to receive EEE for more than seven years, receiving a total of €102,528. It was not until March 2024 that a re-examination was conducted, during which it was determined that false information had been submitted regarding his income and family status.
The application was retroactively terminated, and proceedings were initiated to recover the entire amount. The Deputy Ministry argued that the initial pre-approval was based on information from Social Welfare Services regarding family problems and incidents of domestic violence. However, the Audit Office found that the relevant monitoring had been completed before the preliminary approval was granted.
In a second case, an applicant with subsidiary protection status received the EEE from May 2017 to March 2024, receiving a total of €80,607. Her application was terminated due to failure to provide documentation, false statements regarding her family status, and her classification as voluntarily unemployed.
The Audit Office found that the applicant was registered with the Public Employment Service for only 33 of the 83 months during which she received the benefit. At the same time, while she was working with a monthly income of €400 until March 2024, her earnings increased to €1,350 starting the following month. In this case, it was not found that the recovery of any amount had been considered.
Complaints Regarding Undeclared Work and Cohabitation
Of particular interest is the case of an applicant over 65 years of age, who stated that she was separated from her husband and had been receiving the EEE under a pre-approval arrangement for nearly seven years.
Her file contained an allegation that she was cohabiting with her estranged husband and working as a cleaning lady without paying Social Security contributions. Although the Deputy Ministry stated that it had requested information, it was not possible at the time to confirm that they were cohabiting, while the Audit Office identified shortcomings in the substantive investigation of the complaint.
The applicant received a total of €43,771 from November 2016 through September 2023. Her application was terminated when false information regarding her marital status and the concealment of family income—which involved a monthly transfer to a child’s bank account—were discovered. Despite these findings, no action was taken to recover the funds.
In another case, an applicant had been receiving EEE for six years, totaling €44,179, even though in 2021 she had been deemed capable of performing light, full-time work and had failed to comply with the requirement to register with the Public Employment Service. It was also found that she had been absent from Cyprus for six months, without any consideration given to recovering the funds.
The delays were not exclusively due to cases of false declarations. In another case, a beneficiary remained in a pre-approval status for approximately nine years, despite having submitted divorce papers and later being certified as a person with a disability. By the end of 2025, €131,973 had been paid out, while his application was finally approved in April 2024. This case highlights administrative delays even when there is evidence supporting the continuation of benefits.
Benefits with bank deposits totaling hundreds of thousands of euros
Significant weaknesses have also been identified in the verification of bank deposits.
The law sets a basic deposit limit of €5,000 for the applicant, increased by €1,000 for each additional family member. However, specific exceptions are provided for, including accident compensation, funds earmarked for medical treatment, and other special cases.
According to data submitted in 2022, since the EEE took effect, 737 cases had been approved under exceptions to the prescribed deposit limits. Of these, 587 involved deposits between €5,000 and €20,000, 131 between €20,000 and €100,000, and 19 deposits exceeding €100,000.
The Audit examined 11 of the 19 latter cases, with deposits ranging from approximately €160,000 to €680,000 and benefits paid ranging from approximately €16,000 to €120,000 per applicant.
The audit focused on four applications from individuals with disabilities, for which sufficient supporting documentation to substantiate the origin of the deposits and the lawful application of the exemptions was not initially found.
Two notable cases involved beneficiaries with deposits of €439,611 and €302,889, to whom €90,839 and €111,820 had been paid, respectively.
The Deputy Ministry maintained that the necessary supporting documentation was kept in administrative or confidential files. During the re-audit in July 2026, supporting documents were provided for two of the four cases, but not for the specific cases involving deposits of €439,611 and €302,889.
The report also documents the case of an applicant with deposits totaling €679,024, which had been justified as compensation for an accident. The applicant received a total of €84,616, but his application was terminated in March 2024 when false information regarding his income and family status was discovered.
The Audit Office notes that the application of legislative exceptions is not in itself irregular. The problem lies in the inadequate documentation and the lack of sufficient verification of the conditions under which applications are approved.
Real estate valued up to €811,400
Similar problems have been identified in the assessment of beneficiaries’ real estate holdings.
The law sets a general limit on real estate value of €100,000, providing for exceptions under certain conditions, such as for the primary residence and for properties that cannot be utilized due to encumbrances or usufruct rights.
Of the 89 cases in which exemptions were applied during the 2014–2022 period, the Audit Office selected the nine with the highest real estate values. The properties ranged from €132,450 to €811,400, while the benefits paid per beneficiary amounted to €159,660.
One of the findings concerns how the statutory limit was applied. The YDEP considered that in certain cases involving real estate subject to encumbrances or usufruct rights, a total limit of €200,000 could be applied. However, the Audit Office indicates that the value of the exploitable and non-exploitable portions of the property must be examined separately, in accordance with the requirements of the law.
At the same time, there was no established procedure for determining the actual potential for utilizing the real estate, and information regarding the amount of loans encumbering the properties was not systematically obtained from banking institutions.
He received EEE benefits despite an increase in his assets
A typical example is that of a beneficiary whose real estate was initially appraised at €150,767, but during the general revaluation of the Land Registry on January 1, 2018, its value increased to €210,400.
Despite the fact that a relevant note was entered into the information system in May 2022, no further action was documented, and the applicant continued to receive the EEA.
At the same time, indications were found of a possible lack of continuous residence in Cyprus, as no transactions were recorded in his declared bank account for a period of 18 months, and since 2021 he had been receiving a pension from Greece.
These indications were not adequately investigated. His application was terminated in January 2025 due to the level of his income, and by that time a total of €24,433 had been paid out.
In another case, an applicant with a share of real estate valued at €141,167 received €159,660 from June 2016 through December 2025. Although additional supporting documents regarding his financial situation were requested in 2022, not all the required information was submitted at that time. The YDEP requested them again in 2024, at which time they were submitted.
Benefits with Conflicting Medical Opinions
Of particular interest is the case of an applicant with real estate valued at €257,300, who had been approved to receive the EEE as a bankrupt individual and received a total of €62.104 by December 2025.
The Audit Office found that there were two conflicting medical opinions regarding her ability to work. The first deemed her unfit for work, while the second deemed her fit to work with restrictions. However, the YDEP appears to have relied on the first opinion without referring the applicant for further evaluation.
At the same time, her declared income did not appear sufficient to cover basic living expenses, a fact which, according to the Audit Office, necessitated an investigation into potential additional sources of income.
The Deputy Ministry stated that the case would be reviewed and that the applicant consistently submitted medical certificates. However, during the re-audits in 2026, no updates to the information were found, nor were any more recent certificates identified to corroborate this specific claim.
The audit also included four bankrupt individuals with real estate of significant value, which in one case amounted to €811,400. Although the YDEP had not obtained the necessary information regarding the potential utilization of the real estate, the Insolvency Department conducted the relevant audits and determined that the properties in question had not been put to use.
Gaps in the monitoring of employment and disability
Beyond financial and asset-related criteria, the report documents serious weaknesses in monitoring beneficiaries’ integration into the labor market.
The YDEP did not always make use of the information available from the Public Employment Service, with the result that cases of non-registration, rejections of job offers, or changes in applicants’ employment status.
At the same time, there have been delays in referring individuals to Medical Boards and to the Department of Social Integration of Persons with Disabilities.
A typical example is the case of a former public assistance recipient who had been receiving benefits as a person with a disability since August 2015, based on an older medical certificate. His referral to the relevant department for disability certification did not take place until May 2024, while the assessment was still pending at the time of the January 2026 review.
The Audit Office emphasizes the need for the timely completion of such procedures to confirm the eligibility of beneficiaries without creating unjustified delays.
Bank accounts that could not be located
Another serious problem concerns the integration of the EEE information system with licensed credit institutions.
In some cases, primarily involving citizens of other European Union member states and third-country nationals, bank accounts could not be identified due to discrepancies in identification information.
The Audit Office has documented cases in which the system was unable to identify even the bank account into which the state itself had deposited the benefit.
As a result, a complete picture of an applicant’s deposits was not always available, increasing the risk of erroneous approvals.
The Deputy Ministry argued that the difficulties stemmed from technical or procedural limitations in data exchange between agencies and were not exclusively due to an identification problem on the part of the YDEP.
Interest Payments on a Terminated Loan
In addition to the basic benefits, the Audit identified weaknesses in the management of the mortgage interest subsidy.
In one specific case, a beneficiary was receiving an interest subsidy for a mortgage with a monthly payment of €812, despite strong indications that they were unable to service the loan.
The loan matured in January 2019, but payment of the relevant subsidy continued until October 2021. The Audit Office found that €6,160 was erroneously paid to the bank, and no letter requesting its return was found.
Furthermore, an administrative file of the YDEP revealed an additional €35,125 recorded as amounts to be recovered from banking institutions, for which it was not verified that the necessary actions had been taken.
A shortcoming was also identified in the calculation of benefits for low-income pensioners. When the amount of the Low-Income Pensioner’s Allowance exceeds the EEA, the information system displays only the payment amount, without showing how it was calculated, making it difficult to verify its accuracy.
Incomplete files and a lack of standardized procedures
The problems also extend to the administrative operations of the YDEP itself.
The Audit Office found that electronic files did not include all the necessary supporting documents, while in some cases documents had been filed under the names of different applicants.
At the same time, filing was based on the date the documents were scanned rather than the date they were received, making it difficult to reconstruct the actual history of each application.
The information system lacked adequate capabilities for automatically reminding staff of pending tasks and linking staff notes to the corresponding supporting documents.
Furthermore, there was a lack of uniform, comprehensive written procedures for managing applications, legislative exemptions, and complaints. Although guidelines and opinions had been issued from time to time, they were not always compiled and officially communicated to all staff.
During the January 2026 update, it was found that several internal circulars and a summary guide to procedures had been issued; however, not all weaknesses had been addressed.
Three of the four members of the Audit Team have left
Of particular significance is the finding regarding the handling of complaints concerning the possible illegal receipt of benefits.
The Audit Office found that there was no comprehensive framework for evaluating, referring, and investigating named and anonymous complaints, including those regarding undeclared work and undeclared cohabitation.
The Deputy Ministry reported that a Review Team was established in July 2023 to investigate complaints, while a special Complaints Registry became operational in January 2024.
However, according to the Deputy Ministry’s response in June 2026, three of the four members of the Audit Team had resigned without being replaced, meaning that the mechanism could not become fully operational until the staffing was completed.
At the same time, the YDEP still did not have an independent Internal Audit Unit, despite the fact that it processes a large number of applications and disburses millions of euros annually.
The Deputy Ministry’s Response – Unresolved Issues from 2026
The Deputy Ministry of Social Welfare, in its responses to the Audit Office, states that corrective measures have been initiated to improve the tracking of applications and the application of legislative criteria.
According to updated data, the number of pending pre-approvals decreased from 252 in October 2022 to 149 in January 2026. Of the 149 applications, 28 were already included in the 2022 list.
The Deputy Ministry maintains that a systematic program of targeted re-examination is being implemented, with priority given to older cases. At the same time, it reports that weekly procedures have been adopted to monitor missing supporting documents, cooperation with other government agencies has been strengthened, and computerized applications are being used to verify real estate data.
Certain improvements are planned as part of the new Unified Integrated Information System for Welfare Benefit Management, and a proposal has been submitted to reorganize the YDEP, which includes the creation of an Internal Audit Unit.
Despite these measures, the report notes that significant outstanding issues persisted during the 2026 re-audits, while the Deputy Ministry acknowledges delays in the exchange of information among the relevant agencies.
Recommendations and the Issue of Protecting Public Resources
The Audit Office recommends the immediate review of long-standing pre-approvals, the full documentation of decisions, the systematic evaluation of exemptions for deposits and real estate, and the creation of effective data-cross-checking mechanisms.
At the same time, it calls for enhanced monitoring of beneficiaries’ employment, financial, and family situations; more effective investigation of complaints; the improvement of information systems, and the establishment of internal controls.
The findings do not imply that all of the benefits examined were paid out unlawfully, as several cases were covered by statutory exceptions, while in others eligibility was ultimately confirmed.
What is evident, however, is the government’s inability to document and verify in a timely manner that the conditions for payment of the EEA continue to be met.
This weakness creates a risk of undue payments and limits the ability to make effective use of available resources. The key objective, as the report indicates, is a social protection system that combines timely support for vulnerable citizens with reliable controls, transparency, and accountability.
