10.12.1.30 Cyprus' Social Security System
Cyprus' social security system
The Cypriot social security system began operating in January 1957 and is contribution based. All employees, with the exception of certain categories of agricultural workers, are required to make compulsory contributions. Those exempted from compulsory contributions are entitled to make voluntary contributions.
Social security reforms in 1974 meant that Turkish Cypriots generally stopped contributing to the Cyprus social security scheme, although they retain rights in respect of Cypriot periods of insurance already paid or credited.
Cypriot contributory benefits
Contributory benefits are paid to people who meet minimum contribution conditions. Contributory benefits include:
- Cypriot age pension,
- Cypriot invalidity and work related disablement pension,
- Cypriot pensions for survivors and funerals,
- Cypriot widow's pension,
- Cypriot orphan's benefit, and
- Cypriot funeral grant.
The rate of benefits is tied to the Cyprus periods of insurance and the final salary before becoming eligible for benefit.
Contributory benefits are payable outside Cyprus.
Cypriot non-contributory benefits
Welfare benefits are paid to those people who are not insured. The payments are made under the Public Assistance Law 1991 and under the fund established under the Rent Control Laws of 1983 and 1991.
The payments are flat rate, means tested, and not payable outside Cyprus.
Every employee and self-employed person who has income over a specified amount must pay Cypriot social insurance until they reach age 65. Employees pay 12% of their insurable earnings and self-employed pay 11%. The State supplements individuals' contributions by a further 3.5%. Employers also supplement contributions.
Contributions can be credited for an insured person for:
- any period of full-time education or approved training after age 16,
- any period of service in the National Guard, and
- periods of unemployment and incapacity.
Special credits are given for the earnings-related part of the scheme for contributions credited to the repealed flat rate scheme.
Overall responsibility for the Cypriot social security system rests with the Cypriot Ministry of Labour and Social Insurance. The Department of Social Insurance Services administers the schemes and pays benefits.
Act reference: SS(IntAgree)Act Schedule 11 Cyprus