In what situation can I claim my Cyprus pension?
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.
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.
What conditions do I need to meet?
From the first Monday in 2016, 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 14 insurance points and 728 weeks must have elapsed since the week of commencement of insurance.
It should be noted that the actual basic insurance requirement is gradually increasing to at least 15 years. From the first Monday of January 2017 and thereafter, the insured person must have attained actual basic insurance of at least 15 insurance points.
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.
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.
What am I entitled to and how can I claim?
The pension rate
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.
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.
Actuarial reduction in statutory pension
The amount of the statutory pension payable to a person entitled to claim a statutory pension from the age of 63 is reduced for life (through the submission of the application form for statutory pension, with which the person declares when he wants the pension payments to commence) when the material time falls within the period:
From 1st January 2016 and thereafter, by 0.5% for each complete month or part thereof in the period between the start date of pension payments and the date of reaching the age of 65 years (i.e. a 12% reduction if pension payments begin at the age of 63).
It should be clarified that the actuarial reduction applies in the case both of insured persons entitled to the minimum statutory pension and of widowed pensioners whose late husband or wife, as the case may be, was a statutory pensioner. Furthermore, the actuarial reduction shall also apply to the orphan’s benefit which may arise from the death of a parent who was receiving a statutory pension.
To claim a statutory pension, the insured person must submit an application on a special form which can be obtained from any social insurance district office, citizens’ service centre(CSC), citizens’ centre (KE.PO) or via the internet. The application must be accompanied by all the required original documentation referred to in the application form which, once completed, should be delivered to any social insurance district office or citizens’ service centre or citizens’ centre.
Deadline for submitting the application
The application form must be submitted within 3 months before the date from which pension payments 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.
- Insurable earnings: the amount of the insured person’s earnings on which contributions are payable.
- Insurance points: the result arrived at by converting real and assimilated insurable earnings to insurance points.
- Basic insurable earnings: the amount of insurable earnings which is set each year and increased by Cabinet decree (published in the Official Gazette of the Republic) on the basis of the percentage increase in average insurable earnings in the previous contribution year compared to the contribution year immediately preceding it.
- Basic insurance: includes the insurable earnings for each year up to the amount of the basic insurable earnings i.e. up to one point.
- Weekly value: the valuation of the insurance point in insurable earnings, based on the weekly amount of basic insurable earnings.
- Insured person’s dependants:
- the spouse with whom he/she lives or whom he/she maintains and is not gainfully occupied;
- child aged under 15 years;
- an unmarried daughter aged between 15 and 23 years who is in regular education;
- an unmarried son aged between 15 and 25 years who is serving his term in the National Guard or is in regular education;
- a child, regardless of age, who is permanently incapable of self-support;
- a husband who is unable to work and who is supported by his wife;
- a parent who is unable to work and is supported by the insured person;
- a younger brother or sister of minor age if maintained by the insured person.
- Assimilated insurance: insurable earnings for which the insured person is not obliged to pay contributions:
- for any period of regular education in an educational institution after the age of 16;
- for periods of service in the National Guard;
- for periods when receiving benefits for sickness, unemployment, maternity, paternity, physical injury or an incapacity pension from the Social Security Fund;
- for any period of absence from work because of parental leave.
When evaluating eligibility for, and the amount of, the statutory and widow’s pensions for an insured person who died at or after pensionable age, assimilated insurance from regular education is only taken into account for 6 years i.e. up to 6 insurance points. It should be noted that for all other benefits the period of assimilated insurance for regular education is taken into account without limits. An insured woman, for the purpose of acquiring eligibility for a pension or an increase in its rate, is entitled – for each child she has given birth to or adopted – to assimilated insurance for a period of up to 156 weeks within the 12 years following the birth of each child to cover any possible gaps in her insurance.
- Contribution year: for salaried employees whose earnings are set on a monthly basis, this means the calendar year; and for other insured people, this means a period of 52 or 53 weeks commencing on the first Monday of each year and ending on the Sunday preceding the first Monday of the following year.
- Material time: in relation to any benefit, this means the first day a person would be eligible for the benefit if they submitted an application for that benefit within the set deadline.
- Reference period: the period commencing the first day of the contribution year during which the insured person reached the age of 16 and ending the last week before the week in which the person attains eligibility for pension (material time).
- Actual insurance: includes all insurable earnings for which contributions were paid.
- Actual basic insurance: refers to the insurable earnings each year in relation to which contributions have been paid up to the amount of the basic insurable earnings.
- Supplementary insurance: includes the insurable earnings each year beyond the amount of the basic insurable earnings.
- Relevant contribution year: in relation to benefits, this means the last contribution year before the benefit year which includes the date on which the insurance conditions attached to the benefit must be satisfied (i.e. the relevant contribution year is 2018 for the first half of 2020 and 2019 for the second half of 2020).