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COVID-19 EU PolicyWatch

Database of national-level responses

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

Factsheet for case CY-2020-24/895 Updated – measures in Cyprus

Special support schemes for workers and businesses

Ειδικά σχέδια στήριξης εργαζομένων και επιχειρήσεων

Country Cyprus , applies nationwide
Time period Temporary, 13 June 2020 – 31 October 2020
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
Case created 29 June 2020 (updated 17 September 2020)

Background information

The new support package of government consists of five special schemes that aim to support the Cypriot economy, workers and the businesses, in particularly, to address the consequences emanated by the crisis of the pandemic and to stay afloat. They have been issued by the Minister of Labour, Welfare and Social Insurance with the Decrees 269, 270, 271, 272 and 273 of the Law for Emergency Measures for the Confrontation of the Pandemic of COVID-19 (2020).

Content of measure

This measure has the following contents:

  • The first scheme targets hotel and accommodation units that have not been reactivated after the closure due to the pandemic or which foresee to have a 40% reduction of their turnover. The main obligation of the participating businesses is to collaborate with the Deputy Ministry of Tourism and provide offers for the attraction of domestic tourism. A special unemployment allowance will be paid for 90% of the employees and the business will receive 60% of the value of the insurable units of employees.
  • The second scheme targets businesses connected with the tourist industry or affected from tourism with more than 55% loss turnover. Participating businesses that will reopen and are staffed with up to three employees will receive a special unemployment benefit for 100% of the employees and businesses that remain closed will receive unemployment benefit for 60% of their employees. Businesses with more than three employees which reopen, will receive the benefit for 60% of their employees and those that will not reopen will receive the benefit for 80% of their employees.
  • The third scheme targets specific economic activities with a reduction in turnover of more than 40% in June and July 2020 covering 45% of salaries and a reduction in turnover of more than 35% in August covering 40% of salaries.
  • The fourth scheme targets businesses that are unable to resume operation due to decrees issued by the Ministry of Health and will cover 60% of the wages of all employees of businesses staffed up to nine persons and 90% of employees of businesses employing more than nine persons.

The basic requirement for participation in the four schemes is that no employee has been dismissed since 1 March 2020 and up until 31 October 2020. The maximum amount to be paid is €1,214 and minimum €360.

The fifth scheme targets the unemployed, who have exhausted their right to receive an unemployed benefit. Beneficiaries will be eligible to receive a lump sum of €360.

Updates

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

03 September 2020

The Cabinet decided the extension of this package of measures covering the period 1 September 2020 to 31 October 2020 with an additional budget of €50 million. Basic requirement for participation is that no employee is dismissed by 31 December 2020.

Use of measure

The budget of the bundle of the five new measures is €150 million. According to the joint press conference of the Minister of Finance and the Minister of Labour, Welfare and Social Insurances around 50,000 beneficiaries are expected for the five schemes for the period 13 June to 12 October 2020.

Target groups

Workers Businesses Citizens
Employees in standard employment
Particular professions
Unemployed
Solo-self-employed
Sector specific set of companies
SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
National funds

Social partners

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

Trade unions Employers' organisations
Role Negotiated Negotiated
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

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

  • No involvement
  • Main level of involvement: Sectoral or branch level

Involvement

Social partners - trade unions and employers’ organisations - participated in the structural dialogue for the design of the measure following the invitation of the Minister of Labour, Welfare and Social Insurances. They have been asked to submit their proposals, which they have taken into account to a great extent. The finalization of the measure has been drawn by the Ministry based on the feedback received from social partners.

Views and reactions

The reactions of both trade unions and employers' organizations as well as the reaction of political parties on the announcement of the measure are very positive. They all believe that the measure is another step in the right direction for the support of the economy and SMEs, in particular, in order to stay afloat and avoid dismissals but the increase of unemployment rate at the same time.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      C - Manufacturing C10 Manufacture of food products
      C11 Manufacture of beverages
      F - Construction F41 Construction of buildings
      F42 Civil engineering
      F43 Specialised construction activities
      G - Wholesale And Retail Trade; Repair Of Motor Vehicles And Motorcycles G46 Wholesale trade, except of motor vehicles and motorcycles
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities
      M - Professional, Scientific And Technical Activities M73 Advertising and market research
      R - Arts, Entertainment And Recreation R90 Creative, arts and entertainment activities
      R93 Sports activities and amusement and recreation activities

This case is not occupation-specific.

Sources

Citation

Eurofound (2020), Special support schemes for workers and businesses , case CY-2020-24/895 (measures in Cyprus), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.