Following the issue of Regulations ΚΔΠ 5229-5233 and ΚΔΠ 5239, the Minister of Labour, Welfare and Social Insurance issued on 2nd May 2020 Regulations ΚΔΠ 5257-5261 extending the provision of Special Leave Benefit for the care of children, the Special Sickness Benefit, the Special Benefit for Self-Employed and the Special Unemployment Benefit under the Special Plans for the Complete or Partial Suspension of Businesses’ operations.
In addition the Minister issued Regulations ΚΔΠ 5262 and 5263 providing additional support to unemployed persons and extending the deadline for the settlement of March 2020 social insurance related liabilities respectively.
A summary of the key points of the above measures is outlined hereafter.
- GENERAL MEASURES AND INFORMATION
- The Special Leave Benefit is granted to working parents responsible for the care of children up to 15 years old or/and children with special needs irrespective of age. The Benefit is granted to persons who, given the nature of their work, cannot work from home, or work with flexible arrangements and have no help at home.
- The Special Sickness Benefit is granted to employees of the private sector and self-employed falling under special categories not able to attend their place of work for health-related reasons (see Point 3 below).
- The Special Benefit for the Self-Employed is provided to self-employed persons (with the exception of persons engaged in specific professions) who have either fully suspended their operations (on the basis of the Order issued by the Ministry of Health and relevant decisions of the Council of Ministers), or who have partially suspended their operations i.e. face a reduction of more than 25% in their turnover (as per Point 4 below).
- The Special Unemployment Benefit is provided to employees of businesses falling under the Special Plan for the Full Suspension of Businesses’ Operations. Any business required to suspend its operations as per the Order issued by the Ministry of Health and the relevant decisions of the Council of Ministers, can apply under the plan, so long as it does not perform any commercial activity (other than administrative functions).
- Businesses, the activities of, which are directly linked with the activities of businesses under mandatory suspension can also participate in the above plan so long as their turnover incurred a reduction of more than 80%.
- The Special Unemployment Benefit is also provided to employees of businesses falling under the Special Plan for the Partial Suspension of Businesses’ Operations. A business can apply to the plan so long as it has partially suspended its operations, i.e. it faces a reduction of more than 25% in its turnover due to the negative impact of COVID-19 pandemic.
- The reduction of turnover criterion (by 80% or 25% depending on the relevant Scheme) is assessed for the period from 13/4/2020 to 12/5/2020 compared to the same period in 2019. If the Company did not operate during 2019, the comparison will be made against the period prior to 13/4/2020. Transactions that took place before 13/4/2020, but are invoiced or paid for after 13/4/2020, are excluded from the calculation of turnover.
- A key condition for businesses to participate in the above plan is for them not to have laid-off any of its employees since 1st March 2020 and, in case of the application’s approval, not to proceed with the dismissal of any of their employees for the period they participate in the plan, and for an additional period equal to the period of participation to the plan plus one month (unless a dismissal is made for reasons justifying the non-provision of notice). Businesses will not be able to proceed with any employee layoffs for financial reasons throughout the above period.
- With respect to the Special Unemployment Benefit, the term ‘business’ includes physical or legal persons who are employers and are responsible for the payment of social contributions for their employees to the Social Insurance Fund.
- In addition, for the Special Unemployment Benefit, in the case of Group of companies (i.e. in the context of parent and subsidiaries or related entities with a common owner) engaged in the same economic activity but have a separate Employer Social Insurance Number, the applications that will be submitted by the above group entities will be considered as a single application under the same terms and conditions.
- Similarly, the applications that may be submitted by a company with multiple Employer Social Insurance Numbers, will be treated as a single application under the same terms and conditions that would apply if a single Employer Social Insurance Number was available.
- The application is made on-line via the Ministry’s special webpage coronavirus.mlsi.gov.cy.
- For the period the Special Leave and Special Sickness Benefits are payable, the employer is not required to pay the salary of the (recipient) employees.
- For the period the Special Benefit for Self-Employed will be payable, the Self-Employed person is exempt from the obligation to pay contributions to Social Insurance Services.
- For the period which the Special Unemployment Benefit is payable, the employer is not required to pay the salary of the employees who are recipients of the benefit. In the event the employer has made any payment of the employees’ salary, the part of the salary relating to the period for which the benefit will be payable can be used as set-off by the employer.
More information on the aforementioned plans are noted in the paragraphs below.
- Regulation ΚΔΠ 5257 regarding the granting of Special Leave for the care of children.
- The application is submitted by employed persons who were insured with the Social Insurance Fund in January, or February, or March 2020 and do not receive an old-age pension. The Special Leave can be granted to individuals who were under the above period on maternity/paternity leave or sick leave or was recipient of physical injury benefit.
- The Special Leave Benefit is granted to employed parents working in the private sector. No salary level restriction applies.
- The benefit is calculated on the basis of the person’s salary during January 2020 (or the salary registered by the employer in the event the employee was recruited during February or March 2020 or in case there are no records for January 2020, as per the records of Social Insurance Services in the last 9 months) as follows:
| For part of salary < €1.000 |
€1.000 – €2.000 | Maximum/(Minimum) Amount of Special Leave Benefit for a full month |
|
| Family with both parents | 60% | 40% | €1,000 /(€360) |
| Single-parent family (as defined in the Regulations) | 70% | 50% | €1,200 / (€360) |
- The period of Special Leave can commence from 13/4/2020 up to 12/05/2020 and should not exceed 4 weeks in total for both parents. The above calculations will be applied pro-rata to the days of leave taken by each of the two parents. The benefit cannot be provided to both parents for the same period.
- The consent of the employer is required for the provision of the Special Leave Benefit.
- The benefit will not be provided for a period during which the applicant receives unemployment benefit, special unemployment benefit, sickness benefit or special sickness benefit.
- Working parents eligible for the Minimum Guaranteed Income could also benefit from the Special Leave benefit (subject to conditions).
- Regulation ΚΔΠ 5258 for the Special Sickness Benefit
- The Special Sickness Benefit is provided to employees of the private sector or self-employed falling under the below categories:
- Persons falling under the list of requiring special attention as published by the Ministry of Health dated 29/4/2020 (as amended) and have a relevant certificate from their personal doctor and fall within Category B or Category A if they cannot work due to the nature of the workplace or/and are husbands of pregnant persons;
- Persons under mandatory quarantine or self-isolation on the basis of instructions from the Ministry of Health who hold the relevant Medical Certificate issued by the Ministry of Health or as otherwise permitted by the Ministry of Health;
- Persons infected with the virus COVID-19;
- Persons aged 63-65 who do not receive a pension and are included in categories (i)-(iii) above and hold the relevant certificate;
- Persons with special needs employed under the special employment support schemes – It is noted that in the case of persons falling under category (i) as well as people in self-isolation, the Special Sickness Benefit will be payable so long as they cannot work from home or work under flexible arrangements;
- The Special Sickness Benefit is granted to persons who are under employment for the period of their application, are insured with the Social Insurance Fund and do not receive an old-age pension.
- The Special Sickness Benefit for employees is calculated as the higher amount arising under (i) or (ii) below:
- For employed persons who meet the defined insurable criteria as per the Social Insurance legislation – 60% of the value of their insurable units in line with the applicable legislation;
- For employed persons their salary during January 2020 (or the salary registered by the employer in the event he/she was recruited during February or March 2020 or in case there are no records for January 2020, as per the records of Social Insurance Services in the last 9 months for the same employer.
- For self-employed persons, their weekly benefit will be 60% of their weekly amount of insurable earnings on which they had obligation to pay social insurance contributions during the fourth quarter of 2019. In case the first obligation to pay social insurance contributions was in the first quarter of 2020, the Special Benefit will be €300 for a period of 4 weeks.
- The maximum amount that will be paid as Special Sickness Benefit for employed persons period of one month will not exceed €1.214.
- The minimum amount has been set at €360.
- The Benefit is not provided for a period during which the eligible person receives unemployment benefit, special unemployment benefit, sickness benefit, special sickness benefit or Benefit of Special Leave for the care of children or maternity/paternity benefit.
- Working parents eligible for the Minimum Guaranteed Income could also benefit from the Special Sickness benefit (subject to conditions).
- The period of cover commences from 13/4/2020 up to 12/05/2020.
- Regulation ΚΔΠ 5259 for the Special Benefit for the Self-Employed
- The Special Benefit for the Self-Employed is granted to self-employed persons who:
- have suspended their operations on the basis of Order issued by the Ministry of Health and relevant decisions of the Council of Ministers, or persons whose activities are directly linked with the activities of businesses under mandatory suspension (so long as their turnover decreased by more than 80%);
- have partially suspended their operations, i.e. face a reduction of more than 25% in their turnover for the period 13/4/2020-12/05/2020 compared to the same period in 2019 due to the negative impact of the COVID-19 pandemic. In the event that the business did not operate during 2019, the comparison will be made against the period preceding 13/4/2020. Transactions that took place before 13/4/2020, but are invoiced or paid for after 13/4/2020 are excluded from the calculation of turnover.
- Self-employed persons receiving an old-age pension or exercising the below professions are not eligible for the Special Benefit for the Self-employed:
- Pharmacologists, microbiologists and similar professions;
- Doctors (excluding dentists or other special categories);
- Pharmacists;
- Operators of medical devices and equipment;
- Teachers in public institutes (their remuneration will be paid from the Ministry of Education, Culture, Sport and Youth or the Republic’s Treasury) to the extent of their employment as teachers in public institutes.
- The weekly benefit will equal 60% of the weekly amount of insurable earnings on which the self-employed had an obligation to pay social insurance contributions during the fourth quarter of 2019. In case the first obligation to pay social insurance contributions was in the first quarter of 2020, the Special Benefit will be €300 (for a period of 4 weeks). The benefit cannot be lower than €300 or higher than €900 (for a period of 4 weeks).
- The Benefit is not provided for a period during which the eligible person receives unemployment benefit, special unemployment benefit, sickness benefit, special sickness benefit, benefit of Special Leave for the care of children or maternity/paternity benefit.
- A key condition for granting the benefit is for the self-employed not to have laid-off any of his/her employees since 1 March 2020 and in case of the application’s approval, not to proceed with the dismissal of any of his/her employees for the period (s)he receives the Special Benefit as well as for an additional period equal to the period (s)he is to receive the Benefit plus one month (unless such dismissal is for reasons justifying the non-provision of notice)
- The Special Benefit for the Self-Employed applies for the period 13/04/2020 to 12/052020.
- Self-employed persons eligible for the Minimum Guaranteed Income could also benefit from the Special Benefit (subject to conditions).
- Regulation ΚΔΠ 5260 – Special Plan for the Suspension of Businesses’ operations
- For businesses with more than 9 employees, the Special Unemployment Benefit can be paid to up to 90% of their employees. The remaining 10% (i.e. relating to shareholders/directors, partners holding more than 20% of the shares, general managers and other managers) will not be eligible for the Special Unemployment Benefit. Nevertheless, where the number of the above positions exceeds 10%, the benefit may be payable to such employees subject to conditions.
- For businesses with less than 9 employees, the Special Unemployment Benefit can be payable to all employees.
- Businesses with more than 9 employees, will need to submit a relevant application along with a list of employees who will remain in active service and those who will be temporarily disengaged and for whom an application for the granting of the Special Unemployment Benefit is made.
- The Special Unemployment Benefit will be calculated as in the case of the Special Sickness Benefit.
- The Special Unemployment Benefit for the below reference period cannot exceed €1.214 or be lower than €360. The Benefit is not provided for a period during which the employee receives unemployment benefit, sickness benefit, special sickness benefit, Benefit of Special Leave for the care of children or maternity/paternity benefit or an old-age pension.
- The Special Unemployment Benefit applies for the period from 13/04/2020 to 12/052020.
- Employed persons eligible for the Minimum Guaranteed Income can also benefit from the Special Unemployment Benefit (subject to conditions).
- Employees who prior to this Minister decision qualified under the Special Plan for the Suspension of Businesses’ operations (eg. hotels, restaurant related services) can, following the completion of the period of suspension to apply under the plan.
- Regulation ΚΔΠ 5261 – Special Plan for the Partial Suspension of Businesses’ operations
- Businesses employing up to 50 employees, can participate in the Special Plan and apply for the payment of the Special Unemployment Benefit for up to 75% of their employees (subject to the applicable conditions). For businesses employing more than 50 employees, the percentage of employees for whom the Special Unemployment Benefit can be granted is adjusted to 60%. Businesses employing up to two employees can apply for all their employees.
- The Special Unemployment Benefit will not be granted to shareholders/directors, partners holding more than 20% of the shares, general managers and other managers falling within the 25%/40% limits. Nevertheless, where the number of the above positions exceeds the aforementioned percentages, the benefit may be also payable to such employees subject to conditions.
- While participating in the scheme, the employer has the right to continue employing staff receiving the Special Unemployment Benefit, by paying the difference of the employees’ salary to the special unemployment benefit along with the corresponding contributions to the Social Insurance related funds. The part of the employee’s salary not ‘covered’ by the benefit could be adjusted (subject to the acceptance of the employee) with a corresponding adjustment to the employee’s working hours.
- The Special Unemployment Benefit will be calculated as in the case of the Special Sickness Benefit.
- The Special Unemployment Benefit for the below reference period cannot exceed €1.214 or be lower than €360.
- The Benefit is not provided for a period during which the employee receives unemployment benefit, sickness benefit, special sickness benefit, Benefit of Special Leave for the care of children or maternity/paternity benefit or an old-age pension.
- The Special Unemployment Benefit applies for the period from 13/04/2020 to 12/052020.
- Employed persons eligible for the Minimum Guaranteed Income can also benefit from the Special Unemployment Benefit (subject to conditions).
- Businesses operating in the below sectors do not have the right of applying to the plan:
- Supermarkets;
- Satellite and other telecommunication services;
- Production of electricity;
- Credit and insurance operations, including licensed financial institutions;
- Doctors (excluding dentists and other special categories);
- Hospitals;
- Nursing homes;
- Production of pharmaceutical supplies;
- Wholesale trade in pharmaceutical products;
- Pharmacies;
- Trade in medical and orthopedic supplies;
- Retain trade shops selling primarily foodstuff, drinks or smoke
(excluding kiosks);
- Retail trade of foodstuff
- Businesses wishing to participate need to, along with their application form, submit a list of employees for which the granting of the Special Unemployment Benefit is requested as well as the list of employees for which the payment of the benefit is not required.
- Regulation ΚΔΠ 5262 – Special Plan for the Support of Unemployed persons
- Persons who were registered as unemployed with the Public Employment Service Register and were recipients of an unemployment benefit, but for whom the payment of such benefit lapsed in either February or March or April can apply for the payment of an additional unemployment benefit under the Special Plan.
- The amount of the additional unemployment benefit was set at €360 for a period of one month.
- The benefit is not provided for a period during which the unemployed person receives unemployment benefit, sickness benefit, maternity/paternity benefit or an old-age pension.
- The above decision comes into effect from 13/4/2020.
- Regulation ΚΔΠ 5263 – Extension of deadline for the payment of Social Insurance related contributions
- The deadline for the payment of social insurance related contributions on employees’ earnings for the month of March 2020 has been extended from 30/04/2020 to 14/5/2020.
- In addition, amounts already paid by employers with respect to additional contributions on the basis of the Social Insurance Law, the General Health System Law or the Social Cohesion Law for the month of March 2020 will be considered as overpayments and will be credited to the benefit of the relevant employer against future payments.
- The above decision comes into effect from 30/4/2020.
This material has been prepared for general informational purposes only and is not intended to be relied upon as legal, accounting, tax, or other professional advice.