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[PIO] 17 government measures of €196 million announced to support Cypriot society

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Immediate and medium-term measures to support households and businesses were decided today by the Council of Ministers, which met under the presidency of President Nicos Christodoulides. An important aspect of the package is that it includes measures that provide permanent solutions to address the energy and housing problems. The Government's aim is to provide holistic and sustainable solutions to the energy and housing problems and to relieve thousands of citizens and businesses from the related costs.

The measures are costed and take into account the fiscal capacity of the Cypriot economy. Specifically, the 11 measures with direct impact amount to €141 million and the six Housing Policy measures amount to €55 million.

The package of measures is announced at a time when, as the international scene unfolds, it is causing a variety of impacts at various levels and the Government is called upon to manage, always responsibly and rationally, a particularly complex situation, especially in the energy sector and the wider economy. The Government remains committed to fiscal responsibility, with a people-centred approach to improve the daily lives of citizens and enhance their quality of life.

The 11 measures with direct positive impact (€141 million)

1. Graduated electricity cost subsidy

  1. For the billing months November 2023 - February 2024, for electricity bills metered until 29.2.2024.
  2. Covers residential, commercial and industrial consumers.
  3. For vulnerable consumers the subsidy covers 100% of the electricity price increase.
  4. The Bimonthly Tariff 46 'Water Pumping' is excluded from the reintroduction due to corresponding measures taken by the Ministry of Agriculture AAP.
  5. Further, reinstatement of similar reductions to customers of suppliers other than AHK will be treated similarly, provided that the approved capacity of the substations of such customers does not exceed 70kVA (100A 3-F) and for those cases where increased tariffs arise due to an increase in the cost of fuel for electricity generation, provided that the contracts between them provide for the pass-through of such additional costs.
  6. The estimated cost of reintroducing the measure is approximately €45 million.
  7. It covers 429 000 homes and 106 000 businesses.

2. Reduction of excise duty on motor fuels

  1. Reduction of 8.33 cents per litre, including VAT, in the minimum rates under the acquis for the months November 2023 - February 2024 (petrol from €0.429/litre to €0.359/litre and diesel from €0.40/litre to €0.33/litre).
  2. The budgetary cost is estimated at €21.8 million

3. Reduction of excise duty on heating oil

  1. Reduction in the minimum rate under the acquis (from €0.07473/litre to €0.021/litre) by 6.39 cents per litre, including VAT, depending on weather conditions, for the months December 2023 - March 2024.
  2. The budgetary cost is estimated at €3.8 million

4. Photovoltaic for All Scheme

  1. The Scheme will provide beneficiaries with the possibility to install a photovoltaic system without the payment of an initial capital. Beneficiaries will receive a grant of €1000 and the remaining amount will be repaid in a bi-monthly instalment of €150 through the electricity bill when the PV system starts generating electricity for the premises. The cost of the project is estimated at €30 million, which will come from the Renewable Energy Sources (RES) and Energy Saving (RES-E) Fund which is the main financial instrument of the Republic of Cyprus for the promotion of RES and RES-E. The reserve of the RES-E Fund currently stands at over €70 million.

5. Photovoltaics in Enterprises

  1. Increase of self-generation capacity and self-consumption of electricity through PV.
  2. It will enable businesses to install PV systems, through virtual net-billing, up to 1MW with storage and up to 400kW without storage, with a maximum capacity of 30MW.

6. Application of zero VAT rate on basic goods - Addition of meat and vegetables

  1. Application from 1 December 2023 to 31 May 2024.

7. Inclusion of students of large families in the Child Benefit

  1. This new category of beneficiaries will receive 50% of the benefit.
  2. This concerns students obtaining a first degree.
  3. Age limit up to 23 years for girls and 24 years for boys if they are students (instead of until the end of military service, which is currently the case).
  4. Number of potential beneficiaries: 3860 large families receiving child benefit.
  5. The budgetary cost is estimated at €3.3 million

8. 5% increase in child benefit.

  1. The budgetary cost is estimated at €3.7 million

9. Disabled persons' allowance

  1. Grant of a one-off amount of €120 to disabled persons/ recipients of transport allowance.
  2. The budgetary cost is estimated at €500 thousand.

10. Rent allowance for VET recipients

  1. Grant of a one-off amount of €300 to VET recipients receiving a rent subsidy/mortgage interest subsidy and
  2. €500 to severely disabled VET recipients receiving a rent subsidy/mortgage interest subsidy.
  3. The budgetary cost is estimated at €965 thousand.

11. 2% mortgage interest subsidy scheme

  1. This concerns loans taken out between 1/1/2022 and 31/12/2023.
  2. The Scheme will cover the purchase and construction of a first home, with a maximum subsidy for a period of 2 years.
  3. For families with an annual income of €50,000.
  4. The budgetary cost is estimated at €20 million.

Housing policy - Six measures worth €55 million

The State will carry out the largest intervention in the field of housing to tackle the housing problem. The housing policy includes the following measures:

12. Housing subsidy for young couples and young people

13. Renovate - Rent Scheme,

14. Strengthening existing urban incentives

15. New Build and Rent Scheme

16. Construction of housing units for social housing

17. Allocation of land in the countryside for low-income families.

The housing policy measures will be presented in detail by the Minister of Interior next week.

The above measures follow on from decisions already taken by the Government, such as:

  1. Renewal of the ATA agreement, which benefited 180 thousand workers (100 thousand in the private sector and 80 in the public sector),
  2. increase in welfare benefits,
  3. increase in the low pensioners' allowance,
  4. reduction of the special defence levy on the tax collected,
  5. increase in the allowance for large mothers,
  6. application of the zero rate to basic necessities,
  7. the building plan.

Table for calculating the tiered electricity subsidy

USE

USE

[TD]

DISTRIBUTION

[TD]

INTERIM CONSUMPTION

[/TD] [TD]

AVERAGE INCREASE SUBSIDY RATE OF RATE INCREASE FOR THE PERIOD NOVEMBER 2023 - DECEMBER 2023

[/TD] [/TD]

[TR] [TD]

Residential use

[/TD] [TD]

Valuation 08

[/TD] [TD]

[/TD] [TD]

[/TD] [TD]

up to 100%

[/TD]

[TR] [TD]

01, 02

and 56B

[/TD] [TD]

1-400 kwh

[/TD] [TD]

up to 85%

[/TD] [/TR] [TR] [TD]

401-600 kwh

[/TD] [/TD] [TD]

up to 75%

[/TD] [/TR] [TR] [TD]

601-800 kwh

[/TD] [TD]

up to 50%

[/TD] [/TR] [TR] [TD]

> 800 kwh

[/TD] [TD]

0%

[/TD] [/TR] [TR] [TD]

Bimonthly Low Voltage Single Subscription Commercial Usage Rate

[/TD] [TD]

Code 10

[/TD] [TD]

1-500 kwh

[/TD] [TD]

up to 85%

[/TD] [/TD] [/TR] [TR] [TD]

501-750 kwh

[/TD] [TD]

up to 75%

[/TD] [/TR] [TR] [TD]

751-1500 kwh

[/TD] [TD]

up to 50%

[/TD] [/TR] [TR] [TD]

>1500 kwh

[/TD] [TD]

0%

[/TD] [/TR] [TR] [TD]

Bimonthly Industrial Low Voltage Single Registration Single Use Industrial Usage Rate

[/TD] [TD]

Code 20

[/TD] [TD]

1-750 kwh

[/TD] [TD]

up to 85%

[/TD] [/TD] [/TR] [TR] [TD]

751-1000 kwh

[/TD] [TD]

up to 75%

[/TD] [/TD] [/TR] [TR] [TD]

1001-1500 kwh

[/TD] [TD]

up to 50%

[/TD] [/TR] [TR] [TD]

>1500 kwh

[/TD] [TD]

0%

[/TD] [/TR]

(PM/AF/EXP)
Contents of this article including associated images are owned by PIO
Views & opinions expressed are those of the author and/or PIO
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