Welcome to today's press conference. We have invited you here today as a follow-up to yesterday's Cabinet decisions on further support measures taken by the Government to help our low-income pensioners. We are therefore presenting today the measures that we have adopted following the relevant instructions of President Anastasiades and being fully aware of the difficulties that have been created following the strong inflationary trends that are present at the moment, which have also intensified due to the Russian invasion of Ukraine.
Measures that we are again taking with absolute commitment to the need to find solutions that overcome the problems and to support our low pensioners in a practical and targeted way.
Our decisions are moving in three directions, guided by the plan for the minimum total income for low pensioners, as it was adopted following the recommendation of the Minister of Labour Ms. Zeta Aimylianidou in 2020.
Specifically, today. Our aim is not to inconvenience our pensioners again because of procedures and to ensure that they do indeed always receive the minimum total income to which they are entitled.
[*]We are making good any loss of income incurred as a result of the pension increases. Our aim is never to reduce the total income of any low pensioner. [*]We are increasing the income criteria for receiving the Easter bonus in order to include 5,000 additional low pensioners. Our aim is to boost the standard of living of those in real need in these difficult circumstances.
Recall that the minimum total income for low pensioners has been set at.
These decisions we present today were taken in the context of a number of other horizontal measures taken by the government to deal with the effects of the pandemic, rising inflation and the economic impact of Russia's invasion of Ukraine.
Today's revision of the Minimum Total Income Scheme for low pensioners is not the first. Since 2016 and when economic conditions allowed it upon our exit from the Memorandum, the Scheme has been revised three times, (2016 , 2019 and 2020) increasing the maximum monthly benefit and ensuring that all beneficiaries have total incomes above the poverty line.
As is known, the Plan provides for a monthly allowance for pensioners and pensioner households with an annual income below the poverty line, namely with a total allowance for the previous year (including pension, interest on deposits, rent, etc.) not exceeding €10.324 for a single person household or €15,486 for a couple, per year.
Let me briefly refer at this point to the events that led to yesterday's decision by the Council of Ministers to adjust the Plan.
In January 2022 the amount of the Low Pensioner's Allowance was reduced, mainly due to the concession in 2021 of a 4.58% increase in basic pensions, an increase significantly higher than those granted over time. Precisely because the Plan received the previous year's income over time, there was no simultaneous adjustment to the Low Pensioner's Allowance, since 2020 income was taken into account when it was granted in 2021.
As a result of this, in January 2022 and given that the Allowance is scaled inversely according to the level of income where, as I have mentioned, income includes pension income, in addition to any other income, there have been the corresponding adjustments provided for by the current Scheme in respect of the Allowance granted. Approximately 25,000 beneficiaries were affected by this adjustment.
In view of the above, and in order to avoid the practice of heterodoxy, and to ensure that the objectives of the Plan are achieved, it was decided yesterday to adjust the Plan for the calculation of the Allowance.
Ladies and Gentlemen,
[*]As a general policy and with immediate effect in the Low Income Pensioners' Assistance Scheme, the Social Security pension of the current benefit payment year and other income of the previous year will be taken into account for the calculation of income.
[*]As part of the government's social policy and to compensate for the reduction observed in the Low Pensioners' Allowance in January 2022 for the reasons developed above and to support households and taking into account the specific circumstances created by a further reduction in the purchasing power of the households of low pensioners, it has been decided that :
i) To all beneficiaries of Low Pensioner's Allowance who have a reduction of the Allowance for the year 2022 compared to December of the year 2021, due to an increase in pension in 2021 or an increase in annual income in the same year of up to €120, (17.720 cases) will be granted an additional monthly allowance for the year 2022 equal to the amount of allowance they received in December 2021, provided that they were entitled to a pension throughout the year 2021 and there is no material difference in income or household composition in a subsequent review of the application.
ii) Low Pensioner's Allowance recipients who have had a cut-off of the Allowance (737 cases) due to an increase in income resulting from an increase in pension in the year 2021, will be granted an additional monthly allowance for 2022 equal to the amount of allowance they were receiving in December 2021, assuming they were entitled to a pension throughout the year 2021 and there is no material difference in income or household composition on a subsequent review of the claim.
It is understood that the total monthly income together with the monthly allowance will not exceed the respective specified limits, i.e. for a single person €834 and a couple €1,271.
iii) The payment of the difference will be granted on a monthly basis, starting in April 2022 with retroactive effect from 1 January 2022 until the end of the year 2022.
iv) The supplementary allowance will not be taken into account in the calculation of total income for determining the respective fixed limits, i.e. for a single person €834 and a couple €1,271.
[*]At the same time, adopting a long-standing request of low pensioners, henceforth the amount of the student grant acquired by members of each household will be excluded from the calculation of each household's income for purposes of Low Pensioner's and Lenten Allowances, with retroactive effect from 1 January 2022.
The decision affects approximately 18,457 households that are included in the Low Income Pensioners' Support Scheme, including low-income pensioners receiving the Low Income Pensioners' Allowance through the Minimum Guaranteed Income, and the cost of its implementation amounts to approximately €6 million, bringing the annual expenditure for 2022 to €96 million.000,000 with retroactive effect from 1 January 2022.
In addition, as was announced yesterday, the Council of Ministers approved the granting of an Easter allowance of €190.
In order to support more people and in light of the unprecedented conditions we live in that directly affect our daily lives, it was decided to adjust the income threshold for the year 2022.
In order to support more people and in light of the unprecedented conditions we live in that directly affect our daily lives, it was decided to adjust the income threshold for the year 2022.
In order to support more people and in light of the unprecedented conditions we live in that directly affect our daily lives, it was decided to adjust the income threshold for the year 2022. As a result, the income threshold is increased to €7,000 from €6,500 for a single person household and to €12,000 from €11,000 for a two-pensioner household. A total of 5,151 people benefit from the widening of the income threshold, who either lost their entitlement to the Easter Bonus due to an increase in their pensions for the year 2021, (2,460) or are new beneficiaries of the bonus due to an increase in the income threshold, (2.591) who are enrolled in the Low Income Pensioner Support Scheme, including low-income pensioners receiving the Low Income Pensioner's Allowance through the Minimum Guaranteed Income. The additional expenditure from the increase of the income threshold amounts to €0.9 million (25% increase of the existing budget of €3.7 million and the total number of beneficiaries is 18,822 (38% more than in 2021).
Dear Friends,
As a Government we recognise that low pensioners are a vulnerable group of the population, and that the market value of their incomes is being hit by rapidly rising inflation. That is why we have taken these new support measures.
I want to assure you that we remain ready to resolve difficulties that may arise from the practical implementation of our policies, and our intention is to review any decisions and improve them where and when necessary. Cyprus is and will remain an effective welfare state.
In conclusion, I would like to thank the social partners and organised groups for the constructive dialogue we have had over the past period to resolve the problem that had arisen.
Thank you for your attention and we are at your disposal, with my colleagues, to answer any questions.
(NΓ/ΣΧ)
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