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Financial Support Package by Cyprus Government as to the COVID-19 Emergency

Financial Support Package by Cyprus Government

The below form the key elements of the “Support Package” in terms of financial assistance announced by the Cyprus Government on 15/03/2020:

  1. Granting of “Special Leave of Absence” to parents working in the Private Sector, so that they can take care of their children up to the age of 15 (up to the 3rd Grade of Secondary School) in light of the postponement of the school year for all private and public schools, kindergartens and nurseries.
  • This “Special Leave of Absence” can have a duration of up to 4 week, at this time, and which does not include any public holiday days. During this time, the following benefit shall be granted by the government:
  • For parent with salary up to €2,500: for the first €1,000 of salary, a benefit equating to 60% of the salary, and for the remaining €1,000 of salary, a benefit equating to 40% of the salary. In cases of single-parent families, the percentages shall be increased to 70% and 50% respectively.
  • The Special Leave of Absence shall only be given to one of the two parents, and if one of the two parents receives this, the other parent can not obtain it concurrently. Additionally, if one of the parents works / receives unemployment benefit / is part of the Suspension of Work Scheme and the other parent is not, then the working parent is not allowed to obtain this Special Leave, unless the non-working parent is sick with the virus or is under treatment or is a person with disability or a person under mandatory isolation.
  • This Special Leave is granted to parents, provided that the nature of their work does not allow them to telecommute to work, or work from work, or have a flexible timetable, and provided they don’t have internal assistance. The Special Leave shall be granted in conjunction with the employer, provided that the relevant application is filed.
  • The Special Leave is applicable to parents with disabled children (irrespective of age) provided that they are not in receipt of Caretaker Benefits.
  • The period of Special Leave shall be considered as a period of simulated insurance.
  • With reference to the Public Sector, any employees which the relevant Ministers shall deem that they need to attend their workplace, but the employees need to remain home to take care of their children, shall need to take relevant steps for their replacement together with their respective Supervisors.
  1. Suspension of Work Scheme

Any businesses for which the Government has today decided that they should suspend their operations, and any businesses which will continue operations by will suffer a reduction in their turnover of over 25% shall be legible for the Suspension of Work Scheme, the target being to avoid any layoff of employees and at the same time

the affected employees to receive unemployment benefits for the duration that the business has suspended its operations.

  1. Support of Small Businesses Scheme, for businesses employing up to 5 persons, provided that they will maintain their employees at work, but have suffered at least 25% reduction in their turnover. This Scheme provided that the Government shall refund 70% of the salary of each employee. The details of this scheme shall be announced at a later stage.
  2. Scheme for persons working in the Afternoon Programs of the Ministry of Education.
  • Payment of benefits which shall be equal to their full salary, to about 5,000 individuals working in the Afternoon Programs of the Ministry of Education.
  1. Payment of “Sickness Benefit”, on average at €800 per month, to:
  • Employees which have special health issues and fall within the Catalog which the Ministry of Health has prepared, and which will need to be absence from their workplace so that they can protect their health and not cause any aggravation. As a prerequisite, they need to supply a doctor’s certificate from their treating physician.
  • Employees who are required to be absent from work, under the instructions or on the order of the Authorities [Category 1, mandatory isolation (quarantine) under medical supervision and Category 2, self-isolation under telephone supervision], provided that the said employees have obtained the relevant certificate issued by the Ministry of Health.
  • Persons over the age of 63 and up to the age of 65, who are not in receipt of statutory pension and continue to work, and fall within Category 1 and Category 2 of the Ministry of Health, provided that the isolated employees have obtained the relevant certificate issued by the Ministry of Health.
  • As to Self-Employed individuals, the Sickness Benefit shall be paid as with employees, from the 4th day onwards.
  1. An extension is granted to the timeframes for the submission of objections with the Social Insurance for Self-Employed individuals, for one month, until the 30th April 2020 (expires on the 31st March 2020)
  2. Setting up mobile unit which shall assist elderly and vulnerable persons, so that they can obtain day-to-day goods which are required. Assistance shall be obtained from Volunteer Units and other businesses to achieve this target.

The payments for all above matters shall be done with simplified procedures.

  1. Temporary suspension for a period of 2 months for the payment of VAT, so that businesses retain additional liquidity. This applies to businesses whose turnover is not over €1,000,000 in accordance with the 2019 income tax statements, and provided that their turnover was reduced by at least 25%, without the imposition of any penalties. The payments will then be done in a gradual increment until the 11th November 2020.
  2. Temporary reduction of the VAT from 19% to 17% for a period of two months, and from 9% to 7% for a period of three and a half months, from the date that the relevant legislation shall be enacted.
  3. For the duration of this emergency situation, special provisions shall be made for persons who are registered with the Scheme for Repayment of Debts.
  4. Benefit to Students remaining abroad: a benefit of €750 shall be allocated as to the expenses of students who are currently abroad and will not return to Cyprus for the Easter vacation period.
  5. Extension for a two-month period as to the obligation to file Tax Returns for persons required to have done so by the 31st March 2020 (new deadline being the 31st May 2020).
  6. Suspension of forfeiture of Guarantees relating to contracts between the government and the private sector for provision of goods and services which are delayed due to the ongoing crisis.