The proposed reform of the low-income pensioners' allowance, circulated by the Ministry of Labour to social partners, has failed to satisfy trade unions despite containing some positive elements.
Speaking to Politis, leaders of the main trade union organisations said recognition of the need to preserve the allowance is a step in the right direction. However, they argued that some pensioners would still remain below the poverty threshold under the government's proposal.
PEO secretary-general Sotiroula Charalambous said the organisation is studying the proposal and comparing it with the existing scheme ahead of a special meeting scheduled for Friday before the Labour Advisory Board convenes.
"At first glance, it appears that the government wants to create a new scheme in which eligibility will no longer be linked to the poverty threshold defined by the Statistical Service, which currently stands at €1,103," she said.
Charalambous described the decision to maintain support for low-income pensioners as a positive development achieved after pressure from the trade unions. However, she said concerns remain regarding the proposed criteria and thresholds.
Concerns over adequacy
"It contains positive elements but also aspects that require evaluation and improvement," SEK secretary-general Andreas Matsas told Politis, arguing that the proposal cannot be implemented in its current form.
"It is incomplete and certainly does not achieve the goal of pension adequacy. There will continue to be pensioners living below the poverty line," he said.
Matsas added that SEK is continuing to study the proposal so it can formulate a collective position.
Two key parameters
DEOK president Stelios Christodoulou said two issues should be central to the discussion.
The first concerns the income threshold governing eligibility, while the second relates to the criteria used to determine benefit levels so that support properly reflects the needs of pensioner households.
He explained that the current system was built around an amount equivalent to the extreme poverty threshold, intended to cover basic living expenses.
"The data and society have changed. Everyone's quality of life should improve," he said.
According to Christodoulou, the new framework should aim not merely to prevent extreme poverty but to ensure a dignified standard of living, including the ability to cover additional needs.
He argued that low-income pensioners should be able to afford modest holidays, replace or repair household appliances and meet other essential needs without deprivation.
"We need to define that threshold so the quality of life of low-income pensioners can improve," he said.
Christodoulou also called for regular reviews of the scheme, possibly every two years, to ensure that payments keep pace with rising living costs.
He noted that between 2021 and 2025, the extreme poverty threshold increased by around 35%, while the low-income pensioners' allowance has remained unchanged since 2013.
"We believe the government needs to dig deeper into its pocket in order to achieve the objective of improving the living standards of low-income pensioners," he said.
He added that both the number of beneficiaries and the overall cost of the scheme have been declining over time, suggesting there is fiscal room for stronger support.
Call to revise poverty criteria
The Cyprus Union of Pensioners (EKYSY) is also calling for a revision of the criteria used to determine poverty thresholds.
EKYSY secretary-general Eftychios Papamichael told Politis that the thresholds used for the allowance currently stand at €794 for a single person and €1,191 for a two-person household, levels that have remained unchanged since 2013.
By contrast, the latest figures from the Statistical Service place the poverty threshold at €1,103 for a single person and €1,655 for a two-person household, he said.
"The poverty criteria should be revised so they reflect the increased cost of living and allow pensioners to enjoy a dignified standard of living," Papamichael said.
