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Pension Rights

Description

 

Any person, regardless of their citizenship and country of origin, who has officially worked in Cyprus for at least 13 years and who has made all the necessary contributions to social insurance funds, has the right to receive a state pension in Cyprus from the Social Insurance Services.

In addition, your employer may allow participation in a Group private pension plan, while you also have the option to take part in an Individual private pension plan.

 

State Pension in Cyprus

 

 

The pensionable age is 65. It is possible to receive a pension at the age of 63 under certain conditions. Miners can receive a pension at the age of 63 provided they have worked in a mine for at least 3 years; and they are entitled to a one-month reduction in the retirement age for every 5-month period they worked in a mine on condition that they are no longer engaged in that activity. They may not, however, retire before the age of 58. Cypriot legislation does not provide for early retirement in other cases.

A special benefit for people with thalassemia is granted to insured people with thalassemia from the age of 50 provided that they satisfy the insured conditions for statutory pension at pensionable age. The special benefit is payable until the date the beneficiary is entitled to a statutory pension or until the pensionable age of 65.

 

Payment of a lump sum instead of a statutory pension

A lump sum is paid at the age of 68 to people who do not satisfy the insurance conditions for the statutory pension. The lump sum payment is not payable if the person concerned is entitled to social pension.

 

 

In order to be entitled to a statutory pension, the insured person must:

  • have reached pensionable age i.e. be 65 years old;
  • have attained actual basic insurance of at least 15 insurance points and 728 weeks must have elapsed since the week of commencement of insurance.

However, an insured person is eligible to receive a statutory pension when they reach the age of 63 years if:

  • they satisfy the above insurance condition and the number of insurance points from the basic insurance (actual and assimilated) is not less than 70% of the number of years which fall under the relevant reference period; or
  • on reaching the age of 63, they were eligible for an invalidity pension; or
  • they are aged between 63 and 65 and would have been entitled to an invalidity pension if they had not reached the age of 63.

Insured persons with thalassemia are eligible to a special benefit when they reach the age of 50 if they satisfy the relevant insurance conditions as mentioned above at the pensionable age.

 

Payment of a lump sum instead of a pension

If an insured person has reached the age of 68 but does not satisfy the insurance conditions for a statutory pension, he or she is entitled to a statutory lump sum instead of a pension if he or she has attained actual basic insurance of at least 6 insurance points and 312 weeks have elapsed since the week of commencement of insurance.

The lump sum is not paid if the insured person is entitled to a social pension.

 

The statutory pension includes a basic pension and a supplementary pension.

The weekly amount of the basic pension equals to 60% of the weekly value of the annual average insurance points which have been credited to the insured person's basic insurance during the reference period, increased to 80%, 90% or 100% if the beneficiary has one, two or three dependants respectively. In the case of an insured person without a dependent spouse, a 10% increase is paid for each dependant up to a maximum of two.

The weekly supplementary pension is equal to 1.5% of the weekly value of the total number of insurance points in the insured person's supplementary insurance.

The total pension may not be less than 85% of the basic pension that would have been paid to the beneficiary if he or she had full insurance in the standard part of the Scheme.

For the purpose of calculating the pension rate, the insured person's basic insurable earnings are revalued on the basis of the amount of the basic insurable earnings applying on the day of retirement.

The monthly pension rate is calculated by quadrupling the weekly amount.

In December of each year a 13th pension instalment is paid, equal to 1/12 of the pension paid for the whole year.

Pensions are readjusted every year based on the increase of insurable earnings and the price index.

The special benefit for people with thalassemia is calculated the same way as for statutory pension at pensionable age.

A pensioner who worked and had earnings in the period between the date of entitlement to a pension and reaching the age of 65 is entitled to an increase in the weekly pension amount equal to 1/52 of 1.5% of that income.

 

 

The application form for a state pension must be submitted within 3 months before the date from which the pension, or the special benefit for people with thalassemia, are being claimed. If the application is submitted beyond the deadline, only 3 months will be paid in arrears.

For payment of the lump sum, the application form must be submitted within at most 3 months. If the application is submitted beyond the deadline the lump sum payment will be reduced by 1/12 for every month of the delay.


 

Further Information

For more information on the pension system in Cyprus you can visit the website of the Social Insurance Services, as well as the European Commission’s dedicated webpage.