Drastic overhaul required if social insurance fund to stay afloat

CONTRIBUTIONS to the social insurance fund will have to increase dramatically by 2011 if the scheme remains unchanged, Labour Minister Christos Taliadoros warned yesterday.

Warnings about the viability of the fund have increased recently, with government warnings that the fund could collapse if changes are not introduced as soon as possible.
“For this reason, together with the Finance Ministry, we started a dialogue with the employers, wage-earners and the self-employed,” Taliadoros said.

New meetings have been scheduled for this month and the beginning of July, he added.
The government seems poised to act in order to avert the need for spectacular increases to contributions.

A government projection has showed that if there is no change in the scheme, and contributions remain at current levels, then by 2011 they would have to be increased dramatically for the fund to stay viable.

Taliadoros said the state planned to improve the current situation so that all those covered by the social insurance scheme would make contributions based on their income.

One step towards alleviating the problem is the government’s decision to extend the age of public sector retirement to 63, which main civil service union PASYDY finally approved last week.

The minister said unemployment reached 4.6 per cent in April, the fourth lowest in the European Union.

Cyprus has the lowest male unemployment in the Union.

Taliadoros assured that the government would try and tackle the slight increase, which was recorded this year.

“We are in hot water because we are making efforts for Cypriot jobseekers to be on top of the list when there are available positions,” the minister added.

He revealed that there were around 50,000 foreigners working on the island legally.
According to reports, there are around 40,000 foreigners working illegally.

Concerning Turkish Cypriots working in the government-controlled areas, Taliadoros said the ministry encouraged them to insist on their employers making social insurance contributions for them.

The number making contributions has reached 2,800 out of around 7,000 Turkish Cypriots working in the south.

Ministry officials carry out frequent inspections in workplaces to assure that employers do make contributions, Taliadoros said.

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