The Christodoulides government declares, at every opportunity, that it supports the middle class. The critical question, however, is which part of it receives the most support. Behind the 64.6% statistically labelled the "middle class" lie very different economic realities. One person is behind on rent, another has a household income of €100,000.

The "middle class" has perhaps become the most convenient term in political debate. Everyone wants to support it, almost everyone claims to belong to it, and whenever tax relief or new benefits are announced, extending them to the middle class is presented almost automatically as an act of social justice.

The middle class is not one single group. The Statistical Service places 64.6% of the population within it, around 620,000 people. The figure is striking, but it can also be misleading if treated as a single, homogeneous social body. The Statistical Service itself divides the middle income class into three tiers: 22.2% of the population falls into the lower middle, 30.7% into the middle middle, and just 11.7% into the upper middle. In other words, 52.9% of the entire population, or almost 82% of those statistically labelled "middle class", sit in its two lowest tiers. This is where the debate over government policy takes on a different dimension.

Middle does not mean comfortable

In 2024, the lower middle class had a median equivalised disposable income of just €17,800, while the corresponding figure for the middle middle class was €24,975. The upper middle class rose to €34,961. This, of course, refers to equivalised disposable income, not a family's total gross income.

The distinction matters. A couple with two young children and a net household income of €30,000 does not, under this methodology, even fall within the middle class. Their income equates to roughly €14,300 in equivalised disposable income, placing them lower down the scale. What matters most, though, is not the statistical terminology. It is real life.

In 2024, 17.7% of the lower middle class lived in households that had fallen behind on mortgage or rent payments. In the middle middle class, that figure drops to 6%, and in the upper middle class to 3.5%. For the middle class as a whole, it stands at 9.9%.

The numbers effectively reveal three different "middle classes": those counting down the days to their next pay cheque, those who get by but constantly feel the pressure of rising prices, and those who clearly have far greater room for savings, property and investment.

The question, therefore, is no longer whether Nicos Christodoulides supports the middle class, which, as he says, is a key goal of his government. The question is which middle class benefits most from the way he chooses to divide the pie.

From €5 a month

The new Child Benefit perhaps offers the clearest picture of this contradiction. For a family with one child and an income below €22,000, the increase in the benefit translates into around €60 a year, or €5 a month. At the same time, however, the real reform lies in extending eligibility to far higher incomes. For three children, the maximum household income threshold now reaches €90,000, for four children €100,000, while families with five or more children face no income limit at all. The President himself explicitly linked the change to meeting the demand for middle class support.

The problem is not that a family earning €80,000 or €100,000 is not entitled to any help. A large family can face serious financial obligations even at that income level. The political choice lies elsewhere: at which point on the scale the additional support is channelled.

When the additional help for a family on €20,000 amounts to €5 a month, while state resources are spent at the same time to bring families with several times that income into the system, the government is effectively choosing a wider horizontal spread of support instead of much stronger downward redistribution.

The tax cuts

This philosophy is seen even more clearly in the tax reform. The tax-free threshold has risen to €22,000. At the same time, however, generous family tax deductions were introduced, allowing families with one or two children to claim them with a household income of up to €100,000, families with three or four children up to €150,000, and those with five or more up to €200,000. This creates a fundamental inequality in how the benefit actually works.

A worker below the tax-free threshold has no tax bill from which to deduct a tax relief. The tax relief only acquires real monetary value as taxable income rises.

The picture is similar for green spending and housing. Tax deductions are provided for mortgage interest or rent, and of up to €1,000 per spouse for energy upgrades, solar panels and electric vehicles, under the same high income thresholds. But someone who rents, has no capital to invest and has zero tax liability, cannot make use of these tools in the same way. In several state policies, then, a paradox applies: to get more, you first need to have more.

The protected middle class

The civil service inevitably enters the discussion as well. The government granted a general 1.5% pay rise to public servants, while the Cost of Living Allowance (COLA), annual increments and a pay system with far greater predictability than that of the private sector all continue to operate in parallel.

The IMF calculated, based on the data it examined, that pay in the Cypriot public sector is around 27% higher than that of comparable private sector employees, even after accounting for education and other characteristics. This is one of the highest such premiums among European and advanced economies.

This is not about singling out public servants. The question is why the state can guarantee across-the-board increases for a relatively protected and better-paid group of workers, while increases in social benefits for the lower strata of society are often measured in just a few euros.

The middle class that goes unheard

There is, ultimately, a social group at risk of falling between the two worlds. It is not poor enough to always be a first priority for social welfare. But nor is it well-off enough to easily make use of tax exemptions, solar panels, energy investments and other schemes that require property or available capital.

It is the low-paid worker, the young couple with a mortgage or high rent, the family that on paper moved into the "middle class" but by the end of the month does not feel middle class at all.

And perhaps this is the real problem with the government's narrative. When you say you are supporting the "middle class" of 620,000 people, you can present almost any measure as social policy. But the family behind on rent and the family on €100,000 do not have the same needs, nor the same ability to make use of the state.

The Christodoulides government cannot easily be accused of ignoring low-wage earners. It has raised wages and benefits and created targeted schemes for vulnerable groups. But it can be asked something far more substantive: when it has an extra euro to give, who does it choose to give it to? The person already one step away from financial suffocation, or the one who, until now, was considered too well-off to receive state support?

This, ultimately, is the debate hidden behind the pleasant-sounding term "middle class support". Not whether the middle class should be supported, but which middle class needs the state more today, and which appears to be gaining the most from it. And let's not even get into those living below the poverty line.

Middle Class #