The government has tabled legislation easing the income criteria for child benefit, a move it says will broaden eligibility and correct a long-standing flaw in the scheme. Deputy Minister of Social Welfare Tina Pavlou presented the bill to the House Labour Committee on Tuesday. MPs acknowledged the improvements but argued there is considerable room to go further, given the pressure families face from the rising cost of living.

What the bill introduces

Speaking after the meeting, Ms Pavlou described the tabling of the bill as “a big day” for the Deputy Ministry. She said the new provisions increase support to families by 5% to 10%, depending on their income.

Ending abrupt cut-offs

Ms Pavlou highlighted two key points. The first is that, by relaxing the income criteria, the bill corrects what she called the “very big distortion” whereby a family lost the entire benefit after receiving even a very small pay rise.

Benefit linked to services

The second is that the benefit is now combined with services, “because no benefit is effective unless it is combined with services”, she said.

She explained that widening child benefit eligibility also increases the number of beneficiaries of the tuition and meals subsidy scheme. She said she was “proud” that 2,000 families and 2,800 children will now be able to benefit from it.

Cost of the measure

Asked about the amount of the benefit, Ms Pavlou said it varies by category. The total cost of the measure amounts to €12.5 million.

Benefits and the demographic problem

Asked whether the amendment forms part of measures to tackle Cyprus’s demographic problem, Ms Pavlou said research in the EU has shown that benefit policy has not changed demographic trends.

She added that Canada and Norway, by contrast, have concluded that what helps reduce low birth rates is free childcare from infancy and parental counselling. She noted, however, that this does not alter the government’s intention to support families.

Position of the committee chair

Committee Chairman and AKEL MP Giorgos Koukoumas said Cyprus spends less than 1% of GDP on the family and the child, which he said is not even half the European average. He cited 2024 data on how much each European state spends on the family and the child relative to its total social benefits, and said the government provides support “with a dropper”.

While recognising that the bill contains some improvements and positive changes, Mr Koukoumas said it falls far short of the needs of the modern family facing the unbearable cost of living in Cyprus.

He said the bill:

Completely excludes the thousands of single-parent families in Cyprus from any improvements, and does not establish a permanent, automatic mechanism for the annual adjustment of the benefit’s income scales, something he said everyone otherwise considers logical and necessary.

He added that the benefit amount was and remains very low, and that the 10% and 5% increases, granted only to the lowest income categories, cannot cover even half of the rise in the cost of basic goods in recent years.

Mr Koukoumas also said the bill does not deliver on President Nikos Christodoulides’ pre-election pledges to families with three or more children to abolish income and asset criteria. He said a series of law proposals will be tabled alongside the bill to address these gaps.

Position of DISY

DISY MP Andreas Constantinou said that for the past three and a half years, his party’s standing position has been to increase child benefit and widen the income criteria accordingly, within the state’s fiscal capacity.

He said the bill is in the right direction, but that benefit increases must be large enough for citizens to feel them in their pockets, “and not be used as a pre-election clip or presented as yet another tick in yet another reform without real impact”.

As an example, he said that for families with annual incomes of up to €22,000, the bill proposes an increase of €5 a month. He said his party had expected the government to review the thresholds it has set in order to meaningfully support the middle class and large families, adding that the economy provides room for a substantial improvement of the bill.

Position of DIKO

DIKO MP Andreas Apostolou said child benefit is one of the key issues to which the state should devote a greater share of its resources, and welcomed the increase in the number of beneficiaries.

However, he said it was time for the state to be even more generous to Cypriot families, noting that his party had submitted specific proposals both at the meeting and in private meetings with the Deputy Minister.

He described as unacceptable the five-year waiting period for families repatriating from third countries before they become eligible. He said a law proposal he has tabled, which the Deputy Ministry views positively, provides that all families with one or two Cypriot parents repatriating from any country will be entitled to child benefit from their first day back.

Mr Apostolou added that large families should receive more support and that the cuts made by the government in 2012 should be reversed. He said his party supports the dialogue between the Deputy Ministry and the Cyprus Large Families Organisation.

He also pointed to distortions in the income criteria and in the increases for certain population groups. He said that while all changes require a larger budget, now that the economy is performing well, the money should be returned to citizens, particularly families who have been treated unfairly in previous years.

Position of ELAM

ELAM MP Sotiris Ioannou said it was significant that “after 15 to 20 years, we have policies that place the family itself at the centre”, referring specifically to child benefit and tax reform.

He described the bill as a small step in the right direction, as income criteria are raised to a satisfactory degree, but said the amount of the benefit needs a further increase. The ultimate goal, he said, should be the abolition of income criteria, mainly for families with three or more children.

Mr Ioannou said the bill does not address several distortions in what he called outdated legislation, including:

The need for automatic adjustment of income criteria based on the cost-of-living allowance (ATA), the retention of a family’s status when its children cease to be dependants, and the modernisation and broadening of the definition of “dependant”.

He also referred to ELAM’s proposal that child benefit should be granted only to Cypriot citizens, as is the case with the student grant.

Position of Alma

Alma Movement MP Michalis Paraskeva welcomed the increases, noting that they are funded by taxpayers.

He said, however, that factors such as regional housing costs and inflation should be taken into account in awarding the benefit. He cited Germany and Finland, where place of residence and housing costs are considered in benefit policy, particularly where there are large differences, as is the case with Limassol.

He described as “unacceptable” the restriction requiring five years of permanent residence before the benefit is granted, noting that there are many cases of people who had been living abroad. He said these people should not be excluded and should be entitled to the benefit automatically.

Position of Direct Democracy

Direct Democracy MP Dimitris Souglis acknowledged that the bill moves in the right direction but described the increases as “crumbs”.

He said income criteria must be abolished for families with three or more children as part of efforts to tackle the demographic problem, recalling that this was also a pre-election commitment of the President of the Republic.

Source: CNA

Lightning Strike #