CYPRUS: Social welfare expenditure fell to 19.1% of GDP in 2016

Spending on social protection in Cyprus, as a percentage of GDP fell to 19.1% in 2016 from 19.9% the year before, that translates to €3.530 bln compared to €3.532 bln in 2015, official data showed on Wednesday.

The majority of the social welfare benefits that were provided to beneficiaries in 2016 (85%), were non-means tested – this accounted for €2.936 bln in 2016.

In most cases, the beneficiaries, having made cash contributions to various insurance funds (e.g. the Social Insurance Fund), gained the right to benefits, without their income being a criterion.

In other words, the majority of social protection benefits are not explicitly or implicitly conditional on the beneficiary’s income and/or wealth falling below a specified level.

Furthermore, the majority of the benefits were cash benefits (€2.769 bln), whereas benefits in kind constituted only 19.9% of the total of social protection benefits (€686 mln).

As regards cash benefits, 90.1% (€2.494 bln) were provided periodically, for example pensions and other benefits, whereas lump sum benefits constituted 9.9% of the cash pay-out.

The most significant Social Protection Expenditure functions was for the elderly for illness/healthcare, which combined, constituted 67.3% of welfare benefits (compared to 67.4% in 2015).

The largest share of old age benefits were pensions which amounted to €1.569 bln, constituting 93.2% of the total old age benefits.  

The Social Insurance Scheme is the largest provider of social payments in Cyprus with benefits reaching €1.423 bln, representing a 40.3% share of the total benefits.