The Cypriot government has officially approved a crucial measure to safeguard the financial stability of its most vulnerable elderly citizens. This significant decision, sanctioned by the cabinet on Tuesday, ensures that low-earning pensioners receiving state assistance will continue to benefit fully from their supplementary allowances. The initiative effectively neutralises any potential reduction in these vital payments due to upcoming pension increments.
This protective policy, which will remain operative until June 30, 2026, directly addresses anxieties that projected pension increases could inadvertently impact eligibility for existing state aid. From January 1, 2026, primary pension payouts are anticipated to rise by an average of approximately 3.38 percent. By strategically excluding this social insurance fund increase from the low-pension allowance calculation, the government guarantees that pensioners can fully embrace the benefits of the pension reform.
The Deputy Ministry of Social Welfare will implement this adjustment by not factoring the social insurance fund increment into its assessment criteria for the low-pension allowance. This strategic manoeuvre will allow eligible households to maintain their current level of state-provided financial support. Consequently, pensioners will be able to enjoy both their augmented primary pension and their unchanged supplementary allowance, ensuring sustained financial security.
This forward-thinking policy is projected to provide a vital safety net for an estimated 24,000 households across Cyprus. The estimated financial commitment for this extended support package is approximately €13.5 million. Beyond its immediate financial implications, the decision underscores the government's resolute commitment to safeguarding the financial well-being of its elderly population, particularly those who have historically faced economic challenges. It signifies a proactive approach to pension policy, prioritising vulnerable segments of society.
The rationale behind this intervention is rooted in the principle of equitable benefit distribution. Without this protective measure, even a modest increase in pension payments could potentially push some pensioners beyond income thresholds for their existing allowances. This scenario would negate the intended positive impact of the pension hike. The government's decision preempts this, ensuring sustained financial stability for thousands of elderly individuals and families. This initiative is expected to foster a sense of security and confidence among low-income pensioners, allowing them to face the future with greater assurance.