Filenews 14 June 2022
In addition to the €300 million worth of measures it has taken or is in the plans of taking, the government intends to curb inflation by providing help to a wide range of the population.
According to government sources, on the instructions of the President of the Republic, following the meeting held on 20/05/2022, meetings were held under the chairmanship of the Minister of Finance with the ministers and deputy ministers involved with the aim of finalizing the additional measures to address inflationary pressures and accuracy.
Following an evaluation of the proposals submitted, the Council of Ministers approved the adoption of additional exceptional targeted measures, amounting to €103m. that will mainly, but not only, relieve the most vulnerable groups of the population. This package follows the measures already taken by the Government with the onset of inflationary pressures, amounting to more than €193m.
Therefore, they note, the total amount that will have been spent by 31 August 2022 to address inflationary pressures and accuracy amounts to almost €300m, which is equivalent to 1.5% of the GDP of the Republic of Cyprus.
It stresses that these measures are fully in line with the guidelines of the European Commission but also in accordance with the fiscal capabilities of the state, so as not to endanger fiscal stability.
The support of pensioners Below is listed in detail the new package of measures that includes 14 measures with a total cost of € 103 million.
Adjustment of pensions to take account of the increase in inflation.
As of July 1, it is estimated that the pensions of 165,200 beneficiaries will increase by about 4.3% (the final rate will be determined according to the level of inflation for the months of May and June 2022).
It is noted that as of 1/1/2022, an increase of 1.22% has already been given to pensions and other benefits, based on the increase of the average insurable earnings of 2021 compared to those of 2020, as provided for in the legislation. As a result, the increase that will be granted from 1 July 2022 will be the second for this year.
Support for vulnerable groups of the population
Provision of a one-off grant for the support of vulnerable groups of the population (covering the period until 31/08/2022). Analytically:
All family units, which are recipients of child benefit and have annual gross income of the previous year, up to €10,000, will be paid a lump sum of €150 for each child up to the age of 18.
All family units, which are recipients of child benefit and have annual gross income of the previous year, from €10,001 to €19,500, will be paid a lump sum of €120 for each child up to the age of 18.
All family units, which are recipients of child benefit and have annual gross income of the previous year, from €19,501 to €29,000, with 3 or more children, will be paid a lump sum of €100 for the third or additional children up to the age of 18.
In all family units, which are recipients of child benefit and have annual gross income of the previous year from € 29,001 to € 39,000, with 3 or more children, a lump sum of €80 will be paid for the third or additional children up to the age of 18.
All family units, which are recipients of child benefit and have annual gross income of the previous year, from €39,001 to €49,000, with 3 or more children, will be paid a lump sum of €60 for the third or additional children up to the age of 18. From the above measures, a total of 24,075 families with a total number of children 45,883 will benefit.
In all family units, which do not fall under the above categories, which are beneficiaries of the Guaranteed Minimum Income or the Public Benefit and do not have dependent children under the age of 18, a lump sum of €100 will be paid for the beneficiary, €50 for the beneficiary's spouse, and €25 for each child of the beneficiary belonging to the family unit. This measure is expected to benefit 18,454 beneficiaries, 2,401 dependants of the beneficiaries and 2,232 spouses of the applicants.
All persons with disabilities who do not fall into the above categories, who are beneficiaries of benefits from the Department of Social Integration of People with Disabilities (blind, quadriplegic, paraplegic, severe motor disability, beneficiaries of mobility allowance) will be paid a lump sum of €100. This measure is expected to benefit 4,750 people with disabilities. A total of 73,720 people will benefit from a one-off grant. It is noted that the one-off benefit will not be taken into account in the calculation of total income for the determination of the right or income category that each beneficiary falls under the scheme that already participates.
Immediate announcement (with effect from September 2022) of a Scheme for the Subsidy of care services to children up to 4 years old for subsidizing tuition and feeding in crèches of 16,000 potential beneficiaries, with the monthly amount of the allowance amounting to 80% of the amount of tuition and meals, with a subsidy from €100 to €350 per month for each child, on the basis of criteria which take into account, inter alia, the number of children.
More details will be announced by the Ministry of Labour and Social Insurance and the Deputy Ministry of Social Welfare.
Measures concerning electricity
Extension of horizontal and targeted measures to reduce VAT on electricity until 31 August 2022.
That is, a reduction in VAT from 19% to 9% for domestic consumers and from 19% to 5% for vulnerable consumers.
Increase of the subsidy of beneficiaries of the Plan for the installation of photovoltaic systems and thermal insulation of the roof
- For vulnerable consumers: from €750 to €1,000 per kw installed, and
- For residential consumers: from €250 to €375 per installed kw.
Expansion of the list of vulnerable energy consumers with the inclusion in it of an additional 19,500 family units with annual gross incomes up to €19,500 in order to benefit from an increased grant from the Renewable Energy Grant Schemes and Economize and Upgrade of the Ministry of Energy, Commerce and Industry. More details will be announced by the Ministry of Energy, Trade and Industry.
Increase from 90% to 100% of the ability to cover the annual electricity consumption of the premises for own consumption by the electricity produced by a photovoltaic system for residential consumers and businesses. Therefore, domestic consumers and businesses will be able to cover all their electricity needs through the installation of photovoltaic systems, which makes the investment more attractive as long as the depreciation period and electricity costs are reduced. Acceleration and simplification of the procedures for the licensing of the installation of RES systems so that the building permit for the installation of a RES system is considered given in cases where there is already a planning permit.
For fuels
Extension of the measure to reduce the tax on the consumption of motor fuels and heating oil until 31 August 2022
Support measures for the agriculture and livestock sector
Support of recognized Groups and Producer Organizations in plant production of €700,000 to cover part of their operating costs.
Additional support for livestock and agriculture sectors with an amount of €8.8m to cover part of the price increases due to inflationary pressures
This is a new support, in addition to the amount of €8m approved on 13 April 2022 by the Council of Ministers.
Additional measures/initiatives
The Council of Ministers decided to intensify inspections to combat profiteering. In the event that any profiteering phenomena are observed, the Government will proceed with the imposition of a ceiling.
CERA's intention to issue a relevant decision to set a cap on the RES purchase price at 11 σ/kwh compared to 19 σ/kwh, which is the existing price, moves in the same direction. This decision will concern res projects included in the Plan with final result in the competitive electricity market.
It also calls on the House of Representatives to proceed with the immediate passage of the bill that has been pending before it for a long time in order to implement the Government's decision to reduce the consumption charge of the RES Fund to 0.1 r/kw from 0.5 r/kw that is today.
Measures already taken – Over €190 million euro
Reduction of VAT on electricity consumption.
(a) From 19% to 5% for vulnerable households. Implemented from 1 November 2021
(b) Horizontal reduction from 19% to 9% for the rest of the households.
Applied from 1 November 2021 (with the new decision continuing until 31/08)
Reduction of the tax on the consumption of motor fuels and heating fuels.
(a) Motor fuels (petrol and diesel): By 8.33 cents per litre
(b) Heating fuel: By 6.39 cents per litre.
Time Period for all 2 projects: 8 March 2022 - 1 June 2022 (with the new decision continues until 31/08)
Livestock Support.
(a) Sheep and goat farmers: €5 million.
(b) Cow farmers: €1.2 million.
(c) Pig farmers: €1.4 million.
(d) Purchase of 36,000 tonnes of barley and maize to cover stocks of feed materials. The stock will be made available to farmers if there is a shortage of feed, against payment of a specific price: €18 million.
On March 31, the Council of Ministers proceeded with the revision of the Plan for the low pensioners, granting a supplementary benefit to all beneficiaries who, due to an increase in their pension in 2021, had a consequent reduction of the benefit for the year 2022, so that they would not receive less than they received the previous year.
Attempt to cover the loss of non-arrival of 600,000 Russian and Ukrainian Tourists by implementing the Subsidized Holiday Program for the period 1 May 2022-31 July 2022. Tourist accommodations participate and the maximum price of accommodation in a double room with breakfast will be €100. The Government will subsidize an amount of €20 per room per day and the beneficiaries are all permanent residents in the Republic.
Support to Airlines to enhance connectivity and develop Air Transport.
Support for residents of mountainous areas.
(a) Plan to provide financial assistance for residents residing in communities with an altitude of more than 600 metres. 2022: €4.5 million.
(b) Provision to these residents in January 2022 of a one-off exceptional financial assistance of €2.1 million (50% of the amount given to them in 2021).
(c) Plan to provide financial assistance for support living at least 40 km from the urban centre. 2022: €3 million.
Announcement on April 04, 2022 of the revised Housing Plan for the Revitalization of specific rural areas.
Extension of the list of beneficiaries for free transport by public transport, including escorts for blind persons or persons in wheelchairs, in the presence of the accompanying persons, as well as of special population groups agreed between the contracting authority and the Concessionaire.
Early repayment of a loan of the Naval Agents by the state (amounting to €4.5m) that are currently being repaid through an increase in the loading and unloading fee of the containers at the Limassol Port, so as to absorb part of the increases and achieve a reduction in the transport costs of the containers and, by extension, the prices of the products.
Reduction of traders' fees for low-value products
Adjustment of low value freight charges during their loading and unloading at the Limassol Port, so as to result in a substantial reduction, ensuring the competitiveness of the products. Charges for low value products are reduced to €150/20 foot container and €213/40 foot container, from €214/20 foot container and €328/40 foot container container, respectively.
Market liberalisation in terms of access to the provision of ground handling services for aircraft at the airports of the Republic, achieving a 40% reduction in the cost of providing the services, increasing the attractiveness of the country's connectivity.
Partial replacement of salaries in the public and wider public sector from 1.1.2023 through automatic indexation in salaries and allowances.
