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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure CY-2020-12/330 Updated – measures in Cyprus

Special scheme for partial suspension of business

Ειδικό σχέδιο μερικής αναστολής εργασιών επιχείρισης

Country Cyprus , applies nationwide
Time period Temporary, 16 March 2020 – 31 August 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g., short-time work)
Author Loucas Antoniou (INEK) and Eurofound
Measure added 07 April 2020 (updated 14 October 2021)

Background information

The scheme addresses businesses who have partially suspended their operation, whose turnover declined more than 25% in March 2020 due to the Coronavirus Pandemic and are projecting a corresponding drop for April 2020, as compared to the corresponding months of the previous year. For business that were not active in the previous year, the basis of comparison will be the months proceeding March 2020. The Scheme is in accordance with Decree 131 Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID-19'.

On Wednesday 8 April, the President of the Republic announced the decision of the Cabinet to extent the measure up until 12 June 2020. Currently, the Ministry of Labour undertakes a legal and technical processing of the measure.

Content of measure

The basic requirement for participation in the scheme is that no employee has been fired. Business participating, in addition, should not dismiss any employee during the participating period, during an additional month equal to the period of participation and plus one additional month.

Businesses up to 50 employees may join the scheme by declaring the 75% of their total number of employees to receive the special unemployment benefit. Similarly, businesses employing more than 50 employees may declare 60% of their total number of employees.

The maximum amount for a period of a month may not exceed €1,214.

On the 23 April 2020, the Cabinet amended the calculation of the payable amount to the beneficiaries in order to support as many employees as possible. The insurable earnings of the year 2018 will be taken into account, but in addition, a comparison will be made based on the declared salary of January 2020. The payable amount will be the highest amount that results from this comparison.

Additionally, a minimum payable amount of €356 has been defined for beneficiaries. Also, a special plan will be implemented for employees who first started work in February and March 2020.

An additional amendment to the scheme is the inclusion of persons over 65 years of age who do not receive statutory pension and continue to work.

Updates

The following updates to this measure have been made after it came into effect.

25 August 2021

Decrees 331/2021 & 370/2021 extend the implementation period of the measure until 31 August 2021.

With the Decree 331/2021, the percentage of the turnover decline of businesses eligible to participate increases to 40% and with the Decree 370/2021 to 50% as compared with the corresponding months of the previous year.

08 July 2021

Decrees 169/2021 & 219/2021 & 276 extend the implementation period of the measure for Hotels and Accommodation Units until 30 June 2021.

01 January 2021

Upon the new wave of the pandemic and the lockdown, the government brings back the measure for the partial suspension of businesses from 1 January 2021. Decree 16/2021 amends the requirements for beneficiary businesses and the percentage of subsidiary. It provides that businesses with 30-40% turnover reduction are eligible to receive an allowance for the 45% of their employees, for businesses with 40-65% turnover reduction the allowance percentage rises to 65% of their employees, for businesses with 65-80% reduction the allowance percentage is 75% of their employees and for business over 80% of turnover reduction the percentage is 97% of their employees.

Decrees 88/2021 & 124/2021 extend the implementation period of the measure until 31 March 2021.

Use of measure

Currently, there is not an estimation for the beneficiaries of the scheme. The amount corresponding to the scheme is €182 million covering also the scheme for the complete suspension of business, Decree 130 of the Quarantine Law, Chapter 260.

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
Trade unions
Company / Companies
Social insurance
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Agreed (outcome) incl. social partner initiative Agreed (outcome) incl. social partner initiative
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

Social partners – trade unions and employers’ organisations – at the peak level were invited by the Minister of Labour, Welfare and Social Insurable to participate in consultation process during the designing phase of the Scheme. Political parties have been also invited in the consultation process during the designing of the Scheme. Sectoral trade unions and smaller organisations of the employers did not participate in the consultation process.

Views and reactions

Social partners and political parties encouraged the government to take such measures targeting the needs of different categories of workers based on their special conditions as formed by the pandemic. Reactions and disagreements on the scheme or on particular provisions have not been recorded. On the contrary, social partners appear satisfied with the measure and supportive to the government.

Sources

  • 16 March 2020: Decree 131, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 07 April 2020: Special scheme for the partial suspension of business (www.coronavirus.mlsi.gov.cy)
  • 13 April 2020: Decree 188, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 23 April 2020: Τη λήψη επιπρόσθετων μέτρων στήριξης των εργαζομένων αποφάσισε το Υπουργικό Συμβούλιο (www.pio.gov.cy)
  • 13 May 2020: Decree 239, Law 27(1) 2020 'Emergency Measures taken by the Ministry of Labour, Welfare and Social Insurances for the Confrontation of the Pandemic of Coronavirus COVID 19' (www.mof.gov.cy)
  • 20 January 2021: Decree 16/2021 (www.mof.gov.cy)
  • 25 February 2021: Decree 84/2021 (www.mof.gov.cy)
  • 19 March 2021: Decree 124/2021 (www.mof.gov.cy)
  • 08 July 2021: Decree 169 (www.mof.gov.cy)
  • 08 July 2021: Decree 219 (www.mof.gov.cy)
  • 08 July 2021: Decree 276 (www.mof.gov.cy)
  • 23 July 2021: Decree 331 Partial suspension of businesses (www.mof.gov.cy)
  • 25 August 2021: Decree 370 Partial suspension of businesses (www.mof.gov.cy)

Citation

Eurofound (2020), Special scheme for partial suspension of business, measure CY-2020-12/330 (measures in Cyprus), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CY-2020-12_330.html

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