All pensioners would get an increase from January 1, 2027 under the pension reform bill, with priority for those on low pensions, Labour Minister Marinos Moushouttas said on Wednesday. He said neither the retirement age nor contributions would rise, and that parliament would have the final say.
More than 50,000 pensioners would see their pension rise by over 100 euros a month, and almost 10,000 by over 200 euros, he told an AKEL conference on older people in Nicosia. If the reform takes effect at the start of 2027 as planned, the increases would show up in the end-of-January payments.
Every current pensioner on up to 600 euros a month would receive a guaranteed minimum rise of 30 euros from the first month, he said, stressing that this was a floor, not a ceiling. The size of each increase would vary, depending on factors including years of contributions and how much was paid in.
No pension would be cut, because the bill compares the old and new methods of calculation and pays whichever amount is more favourable to the pensioner, he said.
The bill, drawn up with input from the International Labour Organization, covers the first pillar of the pension system, the Social Insurance Fund. Moushouttas said the reform corrects long-standing distortions and secures the Fund’s sustainability for the next 40 to 50 years.
Early retirement and credited years
The actuarial reduction on the basic pension for those who retire at 63 would fall from 12 per cent to 7.5 per cent, he said. The change would apply for life and cover both current pensioners and those who retire up to 2031.
For the first time, time spent outside paid work would count towards a pension, including raising children, caring for relatives, periods of disability and the years before someone enters the labour market. He linked the change to efforts to narrow the gender pension gap, saying many women never built up a full contribution record because they devoted themselves to caring for their families.
Fund reserve
The Fund’s reserve of about 12 billion euros belongs to the people who worked and paid contributions, Moushouttas said. Under the reform, the state would stop borrowing from the Fund, annual surpluses would go into the Fund’s own investment account, and the state would begin gradually repaying its debt to it.
Costing proposals
He called for a debate based on specific data and clear timelines, saying the Fund has fixed revenues and limits. Any proposal for an extra benefit was welcome, he said, but it must come with a cost and a source of funding.
“It is the only way to stop the debate turning into a bidding war of promises that someone else will pay for later,” he said, adding that the ministry remained open to discussing proposals.
Ageing population
In 2022, one in six Cyprus residents was over 65, Moushouttas said. That ratio is expected to reach almost one in four by 2050 and three in ten by 2070.
He rejected the label “demographic bomb”, arguing that longer lives are an achievement and that the real risk lies in failing to prepare. What matters, he said, is income, care and dignity for older people, especially those who live alone or depend entirely on their pension.
For decades, care for older people in Cyprus has relied almost entirely on families, mainly women, he said, but with today’s employment patterns and families living further apart, that model is no longer enough.
His priorities are an integrated long-term care system, more home care and support for informal carers. These would be delivered through cooperation between the Ministry of Labour, the Deputy Ministry of Social Welfare and the Ministry of Health.
Active ageing means giving those who want and are able to keep working the chance to do so, and tackling age discrimination, Moushouttas said. He also pointed to training and retraining through the Human Resource Development Authority, tackling digital exclusion, and recognising older people’s social participation and volunteering.
He said the relevant services would study the conference’s conclusions and take them into account in the ongoing discussions, with the aim of better understanding the issues that concern older people.
(Information from Cyprus News Agnecy)
Read more:
