Government approves new business and individual support measures for those severely impacted by the Covid 19 pandemic.

In an announcement made 5th November 10, 2020, Minister of Labour, Zeta Emilianidos confirmed that the Cabinet has approved a new bundle of emergency support schemes for both businesses and individuals which have had their income severely reduced as a consequence of the Covid 19 pandemic.  Employers wishing to take advantage of the support measures may only do so if they commit to not making any employees redundant.  Businesses that have not fully suspended their operations will also need to prove that they are suffering a year on year decrease in turnover of at least 40% before they can access the support measures.

In total eight assistance schemes have been approved. Two of these are directed at the tourism sector and will run from 1 November 2020 until 31 March 2021.  The remainder will run until January or the expiry of the relevant ministerial decree.  In general subsidy funding will cover up to 60% of an employee’s salary subject to a maximum of Euro 1,214 per month and a minimum of Euro 360 per month.

In summary, the assistance available is as follows:

Measures to support the tourist sector and associated economic activities:

  1. Hotels which have completely suspended their operations can receive a subsidy for up to 97% of staff employed.
  2. An incentive scheme is introduced to try to encourage continuation of economic activity. For hotels and other tourist accommodation which remain open a subsidy for up to 90% of staff will be available. For other companies related to the tourism sector the subsidy reduces to apply to 65% of staff except in the case of a travel agency where the relevant figure is 80%.  All businesses, if they employ 3 employees or less, may apply for a subsidy for all staff.

Other measures:

  1. Businesses under suspension by ministerial decree may access subsidies covering 97-100% of their employees until the decree expires. A similar subsidy will also be available to non-suspended businesses which have experienced a more than 80% year on year decrease in turnover because of the pandemic.
  2. Businesses disproportionately affected by the pandemic in certain activities such as banqueting halls, day care centres etc. may receive a subsidy for 50% of employees if year on year turnover has decreased by more than 40%.
  3. Subsidy for all employees is available for businesses employing 9 workers or less.
  4. Payment of Special Unemployment Benefit (to individuals who have exhausted their right to standard unemployment benefits) will continue to 31 December 2020.
  5. A continuation of support for specific categories of self-employed individuals whose income has been significantly affected by the pandemic e.g. Taxi drivers, photographers, hospitality workers.  Those experiencing a 40% or greater income drop relative to the previous year may claim up to 60% of their employees’ salaries for a four week period.  This is subject to a minimum 300 euro and a maximum 900 euro.
  6. Continuation of the payment of a special sickness benefit to employees in the private sector who are classed as being in a Covid 19 vulnerable group by the Ministry of Health and, who are unable to work from home.

The new measures are expected to support approximately 60,000 employees as well as those who are unemployed or classed as vulnerable to the pandemic.  The estimated cost of the total package is estimated to be between 130 and 150 million euros.  The intention is to ensure that all citizens have sufficient income to live off until the pandemic recedes.  It is also designed to help sustain much needed domestic demand within the Cyprus economy.