Source: CNA
The Council of Ministers has approved an increase in pensions from the Social Insurance Fund (TKA) starting in January 2025. The basic part of the pensions will rise by 5.94%, while the supplementary part will see an increase of 1.49%, announced Yiannis Panayiotou, Minister of Labour and Social Insurance. He highlighted that the 5.94% increase in the basic part is the highest recorded since 1996.
“The positive trajectory of the Cypriot economy and the consistent implementation of a people-centered government policy are producing results that significantly improve citizens' daily lives,” Panayiotou stated. He added that “the adequacy of pensions and wages is gradually being strengthened, and this positive progress will continue.”
Speaking after a session in the House, the Labour Minister explained that the monthly amount of the full basic pension will increase from €483.77 to €512.50. The minimum pension for beneficiaries without dependents will rise from €411.20 to €435.62.
In total, 142,542 individuals are beneficiaries of the statutory TKA pension. Additionally, the monthly amount of the social pension will increase from €391.85 to €415.13, benefiting 17,853 individuals.
Panayiotou clarified that the percentage increase in the basic part of pensions is calculated based on the rise in the average basic insurable earnings over the two preceding years, as determined by a relevant actuarial report.
The increase in the supplementary part of pensions is adjusted according to the percentage change in the average Consumer Price Index (CPI) during the second half of 2024 compared to the corresponding period in 2023.
The Minister emphasized that the 5.94% increase in the basic part of Social Security pensions is the highest since 1996, reflecting a historic rise in average insurable earnings over the past three decades.
According to TKA data, wages increased on average in 2023 by more than they had in the previous 30 years, leading to this significant adjustment.
When asked about the basis for the increase, Panayiotou confirmed that it aligns with legislation that mandates the calculation of pension adjustments according to wage increases. He noted that the decision by the Council of Ministers ensures the full implementation of this legislative requirement from January 2025.
Regarding concerns about the effect of these increases on the low pensioner's allowance, Panayiotou reassured that the government has already decided, as part of the 2025 budget, that these increases will not impact the allowance paid by the Ministry of Social Welfare.
Panayiotou concluded by stating that the substantial increase in wages reflected in the insurable earnings is the highest in 30 years. This development marks a critical step toward enhancing the adequacy of wages and pensions, in line with the government’s objective of progressively strengthening social security measures for all citizens.
