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News & Knowledge

Cyprus: Government economic (support) measures

14th April 2020
Michael Damianos, Damianos & Co LLC

The global crisis caused by Covid-19, which affects the sustainability of states and the survival of people and businesses, hasn’t left Cyprus unaffected. The Cyprus government has introduced a number of financial support measures in order to tackle the disastrous economic effects of Covid-19. MSI's Cyprus law member Damianos & Co provides an overview of the measures introduced for the support of employees and businesses in Cyprus.

Granting of “special leave” to parents for the care of children up to 15 years old, or children with disabilities regardless of age. The application for “special leave” is submitted by employees having a gross monthly salary of up to €2.500, provided that the employer’s consent has been obtained. The period for “special leave” cannot exceed a four week period in total for both parents, but it is almost certainly the case that the effects of Covid-19 will mean that this period will be extended, at least for the whole of April (for now).

Granting of “unemployment allowance”
to employees of businesses (excluding businesses in the public sector and businesses that have not reduced their turnover, such as supermarkets) which (a) have suspended their operations, or (b) have partially suspended their operations and have a turnover decline greater than 25% as a result of Covid-19.  In order to be eligible for this scheme, no employee must have been dismissed since 1 March 2020 and no employee can be dismissed for financial reasons during the period of the scheme and for an additional period thereafter.  The number of employees to join this scheme depends on the total number of employees employed by the business.  The employer is relieved from its obligation to pay the salary of its employees who receive the “unemployment allowance”.  In relation to businesses who have partially suspended their operations, the employees can work while receiving the “unemployment allowance” (provided that they have agreed to this) and, therefore, the employer must pay to them the remainder of their salary.

Granting of “sickness benefit”
to private sector employees or self-employed persons (i) who are on the list of vulnerable groups of people as designated by the Ministry of Health, (ii) who are subject to compulsory isolation (quarantine) or self-isolation, (iii) who are infected with Covid-19, and (iv) who are between 63 and 65 years old and fall under the categories (i)-(iii) above. The “sickness benefit” applies only to people who cannot work from home.

Non-payment of the additional contribution to the General Healthcare System which was scheduled as of 31 March for April, May and June 2020.

Deferring of VAT payments
until 10 November 2020 for the periods ending 29 February, 31 March and 30 April 2020 for specific businesses.

Further to the above, the government introduced a cap on the price of personal hygiene products, such as masks, for the protection of consumers, while it granted a “residence allowance” of €750 for each student residing abroad.

About Damianos & Co - Nicosia

We are a Cypriot law firm based in Nicosia with a team of highly professional, experienced and dedicated lawyers and paralegals. Our mission is to provide concise, direct, exceptionally high quality and cost-effective advice and services to our clients.

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