A striking anomaly in Cyprus' welfare system means that people with assets worth up to €1.2 million can still qualify for state assistance through the child benefit and single-parent family benefit schemes.
Under current legislation, individuals and families with property, bank deposits, bonds and shares valued at up to €1.2 million remain eligible for both benefits, provided they meet the relevant income criteria. In practice, this means a millionaire can continue to receive state financial support.
The situation is particularly notable because, despite numerous amendments to the legislation since it was first enacted in 2002, the asset threshold has remained unchanged. The continued use of the €1.2 million ceiling has prompted questions about the philosophy, targeting and effectiveness of the state's social welfare policies.
Late minister sought to lower the threshold
The issue had also been identified by the late Labour Minister Zeta Emilianidou, who sought to address it before her death.
Speaking before a parliamentary committee on demographic issues in September 2021, Emilianidou revealed plans to submit legislation reducing the €1.2 million property threshold for child and single-parent benefits to levels applied in other welfare schemes.
She reportedly described the existing limit as an "excessive amount."
How the inequalities arise
Critics argue that the current system creates inequalities because the asset criterion is applied uniformly rather than on a graduated basis.
As a result, a person with assets worth €1.2 million can receive exactly the same benefit as someone with no assets at all.
To qualify for child benefit, applicants must:
- Have legally and continuously resided in Cyprus for at least five years before submitting an application, with residence in another EU member state counted towards that requirement.
- Hold total assets worth no more than €1.2 million, including assets transferred during the previous 24 months.
- Have gross annual household income not exceeding:
- €49,000 for one dependent child
- €59,000 for two dependent children
- An additional €5,000 for each extra dependent child
For example, a family with two children, a home worth €600,000 and bank deposits of €600,000, combined with annual gross income of €39,000, qualifies for a benefit of €643 per child.
The same benefit is available to a family with assets worth less than €300,000 and annual gross income below €19,600.
Single-parent benefit follows the same logic
The single-parent family benefit, which is paid in addition to child benefit, is intended to address the additional challenges faced by a parent raising children alone.
The only criterion that differs is the income threshold. The monthly benefit is available to single-parent families with gross annual income of up to €49,000.
Under the current rules, a single parent with assets worth €1.2 million and annual income of up to €39,000 can receive €200 per month per child.
At the same time, a single parent with no assets and annual income of €14,000 receives exactly the same amount.
Much stricter rules apply elsewhere
In contrast, other welfare schemes operate under significantly lower income and asset limits.
The rationale behind most social benefits is to assist citizens facing genuine financial hardship, with support directed toward those most in need.
The Guaranteed Minimum Income (GMI) scheme is a notable example. Under its rules, neither the applicant nor another member of the household may own immovable property worth more than €100,000.
Bank deposits are also limited to €5,000, with an additional €1,000 permitted for each extra household member.
Audit report under scrutiny
The issue is expected to be discussed by the House Audit Committee, which is examining an Audit Office report on the Deputy Ministry of Social Welfare published in April.
The report highlighted delays in implementing planned social interventions and pointed to the need for stronger control mechanisms governing welfare payments.
The Audit Office has recommended the consolidation and rationalisation of welfare schemes so that benefits are more effectively targeted and directed towards the groups that need them most.
Questions over the purpose of the system
The continued use of the €1.2 million asset threshold has become a source of growing debate.
The central question facing lawmakers is whether such a high limit serves the intended purpose of social welfare policy or whether it should be revised so that public funds are directed primarily towards economically vulnerable families and single parents.
