President Nikos Christodoulides announced an agreement in principle on the cost of living allowance (COLA/ATA) from the Presidential Palace, flanked by the ministers of labour and finance.
According to the president, the agreement gradually increases the COLA payment rate to 100% and links it to the minimum wage, extending coverage to nearly 55,000 low-income and other workers.
What the agreement in principle provides – What preceded it
PASYDY General Secretary Stratis Matthaiou told the Cyprus News Agency that the final agreement framework provides for gradual COLA payments at 80% on 1 January 2026, 90% on 1 July 2026 and 100% on 1 July 2027, with subsequent payments made every July at 100%.
The COLA calculation will take into account the average growth rate of the previous year, which must be positive.
The meeting was attended by representatives of SEK, PEO, DEOK and PASYDY, as well as Labour Minister Yiannis Panayiotou, Finance Minister Makis Keravnos, Deputy Minister to the President Irini Piki and Government Spokesman Konstantinos Letymbiotis.
They will also attend the signing of the agreement, along with representatives of employers’ organisations.
According to Matthaiou, the framework also agreed on an inflation cap of 4%—if inflation exceeds 4%, COLA will only be paid up to 4%. An expanded session of the Labour Advisory Board is also planned, which will provide recommendations during periods of economic crisis.
The PASYDY general secretary said the national minimum wage will be linked to COLA through the incorporation of an amount corresponding to the cost of living adjustment of the previous two years, with a reassessment of the issue in 2028.
From the employers’ side, OEV Director General Michalis Antoniou said that although employers’ organisations do not yet have the final texts, “the substance does not change”.
As he said, the agreed formula remains, which provides that COLA payments on the minimum wage are made every two years, whilst the provision for incentives to employers to extend the scheme has been reformulated.
Antoniou estimated that three texts will likely be signed:
– one for the COLA agreement,
– one for the minimum wage,
– and one for incentives to employers.
