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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-2020-43/1326 – measures in Cyprus

Subsidised employment: Incentives for companies to hire unemployed

Σχέδιο παροχής κινήτρων για εργοδότηση ανέργων

Country Cyprus , applies nationwide
Time period Temporary, 23 October 2020 – 21 October 2021
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Active labour market policies, incl. subsidised job creation
Author Loucas Antoniou (INEK) and Eurofound
Case created 26 October 2020 (updated 30 October 2020)

Background information

The scheme aims to combat unemployment through the provision of incentives for employers in order to hire unemployed people. The incentives refer to the subsidy of the employment cost of the hired unemployed people. The scheme is part of the active employment policy of the government promoting the inclusion of the unemployed in the labour market through subsidised jobs that include the provision of occupational training. The legal base of the scheme is the decision of the Cabinet of the 7 October 2020 for the projects that may be co-financed by the European Social Fund and the Republic of Cyprus. The Department of Labour of the Ministry of Labour, Welfare and Social Insurances is the coordinator agency of the Scheme.

Content of measure

Eligible employers and enterprises are those performing entrepreneurial activities in the areas controlled by the Republic of Cyprus, registered as employers in the Social Insurances Registry and have not been convicted for violations of the Minimum Income Decree or the legislation on illegal and undeclared employment. An additional eligibility criterion is that the enterprise applying for participation has not dismissed anyone since the 1 March 2020 and the begging of the crisis due to the pandemic.

The maximum number of people that an employer may hire within the frame of the scheme is five people. Additionally, the employment of a person within the scheme shall contribute to the increase of the number of employees in the enterprise performing the same profession with the person that is hired.

Eligible people are the unemployed people registered at the Public Employment Services, at least one day prior the hiring day, citizens of the Republic, EU citizens or Third Country Nationals legally reside in the Republic having the right of free access in the labour market of the Republic.

The total budget that is available for the scheme is €17 million. The subsidy that the enterprise receives for each hired person is €870 for the first six months and €924 for the rest. The subsidy to the employer is granted for the first ten months and the employer is obligated to cover additional two months. The maximum annual subsidy that is granted for one person to the enterprise is €8,600.

Use of measure

For the moment, there is no assessment that indicates the number of business and/or workers that may have benefited from the scheme.

Target groups

Workers Businesses Citizens
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
Public employment service
European Funds
National funds

Social partners

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

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

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

  • No involvement
  • Main level of involvement: Unknown


The Scheme and its related provisions, terms and eligibility criteria has been designed exclusively by the Ministry of Labour, Welfare and Social Insurances. Social partners have not been invited by the Ministry into a consultation process for the definition of the scheme. They have only been informed, at an earlier stage, by the Ministry for its intention for the launching of the Scheme.

Views and reactions

Social partners are in favour of measures that encourage the employment of particular groups of workers and the incentives that are provided to businesses for the employment of the unemployed. They appear supportive to this governmental initiative and no reactions or disagreements on the provisions of the scheme have been recorded to this moment.


  • 23 October 2020: Σχέδιο παροχής κινήτρων για την εργοδότηση ανέργων (


Eurofound (2020), Subsidised employment: Incentives for companies to hire unemployed, case CY-2020-43/1326 (measures in Cyprus), COVID-19 EU PolicyWatch, Dublin,

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