Key points on the Minister of Health’s Decree on March 29th on the special scheme for partial closure of business operations

As per Sunday March 29th Decree of the Ministry of Health, the Special Scheme for Partial Suspension of Businesses was issued.

The criteria are as follows:

  1. Any company can be included in the plan provided its work has been partially suspended i.e. there is a turnover reduction of more than 25% in March 2020 and it foresees an equivalent reduction for April 2020 in comparison to the same months of last year and the said decrease is due solely due to the COVID 19 pandemic. In the event that the company was not operational in 2019 the comparison will be carried out on the months preceding March 2020.
  2. A specific e-application should be filled in on the document EE4 which is labelled as Appendix 1 and will be available  on https://www.coronavirus.mlsi.gov.cy/ by a person that legally binds the business as per relevant law.
  3. A basic precondition for participation is the Special Scheme is that no employee should have been fired from March 1st 2020, and in the event of approval to participate that no employee be fired for the period of participation as well as an additional period equal to the period of participation plus an additional one month (except for cases where lay-off without warning is warranted). It is implied that businesses should not fire employees for financial reasons in the abovesaid period.
  4. Businesses employing up to 50 employees can participate in the plan and enroll 75% of their staff for the Special Unemployment Allowance as long as the criteria and preconditions are met.
  5. Businesses employing more than 50 employees can participate in the plan and enroll up to 60% of their employees to receive the Special Unemployment allowance as long as the criteria and preconditions are met.
  6. For the calculation of employees who fall within the 75% or 60% the mathematical calculation will be rounded to the nearest whole number. It is clarified that for companies employing up to 2 people, the special unemployment allowance may be provided to all employees regardless of their position if the criteria and preconditions are met.
  7. For businesses that will be accepted in the plan, the special unemployment allowance is not provided to Shareholder Directors, Partners with over 20% of shares, General Directors and  Management Staff who fall within either the 25% or 40% – depending on the case – to whom the allowance cannot be provided (not applicable for businesses employing up to two staff).
  8. In the event, that the persons stated above exceed 25% or 40% of the employed staff – depending on the case – then they can be included and the Special Unemployment Allowance paid as long as the terms and conditions of the current decision are met.
  9. The business needs to submit along with the application (EEA.4) a list of employees for whom the special allowance is requested for the period of partial suspension as well as a list of employees to whom the special allowance will not be paid.
  10. For the period for which the special unemployment allowance will be paid, the employer is discharged from his obligation to pay salary to the employees that received the said allowance. In the event, that salary has been paid to the employee for the period during which he will receive the allowance, the portion of the pay equivalent to the period can be offset by the employer.
  11. For businesses that will participate in the plan, the employer has the capability to employ staff that will be receiving the special unemployment allowance, paying the employee the rest of their salary and the relevant contributions to the Social Insurance Fund that relate to this sum. The remainder of the salary can be adjusted, if the employee agrees, according to his/her hours of work.
  12. The employee to whom the unemployment allowance will be paid can, if he/she so agrees, receive the remainder of his/her salary from the Special Unemployment Allowance or if the employee agrees, with an adjustment of the above difference as per hours of work.
  13. The period during which the unemployment allowance is provided is to be considered a period of simulated insurance for the purpose of Social Insurance and the insurance account of the beneficiary will be so credited.
  14. The enterprise will only be inducted into the plan of Partial Business Suspension with an affirmation statement by a designated official that binds the company according to the relevant law with where:
    1. It will be confirmed that the data submitted are real and legal ramifications are accepted for false statements, amounting to up to €40,000 or a prison term of up to two years or both in the event of conviction for the provision of false information.
    2. Authorization will be given to the Ministry of Labour, Welfare and Social Insurance to verify in cooperation with the relevant authorities in Cyprus or abroad any of the documents submitted in the application, if required at the time of submission, in order to receive the allowance.
  15. Terms and Conditions for the provision of the special unemployment allowance for employees:
    1. The allowance is given to the employees that have been included in the 75% or 60% of the staff depending on the company size. For companies of up to two persons, the allowance can be provided regardless of their position, if the terms and conditions are met.
    2. No Special Allowance can be given to Shareholder Directors, partners possessing more than 20% of shares, General managers and Managerial staff when they fall within the 25% or 40% of the company’s employees – depending on the case – to whom the Special Unemployment Allowance will not be given (not applicable in companies of up to two staff).
    3. The special unemployment allowance is paid to beneficiaries as follows:

i.      For employees for whom the insurance preconditions are met and who qualify for unemployment allowance under the Social Security Act, at 60% of the value of the insurance units in accordance with the above Law.

ii.      For employees for whom the insurance preconditions are not met as per Social Security Act and are insured in the Social Insurance Fund in January 2020, the salary of January 2020 (Social Insurance Earnings) will be taken into account  or the previous last salary (Social Insurance Earnings) for which there is information in the Social Insurance Services registry and a special unemployment allowance  will be paid ; the amount of which will be detailed in a later decision.

iii.      The maximum amount to be paid as unemployment allowance for a period of one month cannot exceed €1,214.

    1. The special allowance is paid to a beneficiary only if FORM EEA6 (IBAN DETAILS) is submitted for the bank account in which the allowance will be paid.
    2. The special unemployment allowance is not available for any period during which the employee received unemployment allowance, special sickness allowance, sickness allowance or similar allowances from the Social Security Fund.
    3. The plan is not applicable for government and semi-governmental organizations or organizations of similar nature as stated in Appendix 2.
    4. The Special Partial Suspension Plan is valid from 16/03/2020 to 12/04/20.
    5. Beneficiaries of the Minimum Guaranteed Income (EEE) can take advantage of the special unemployment allowance if they are employed in businesses that could be inducted in the plan. The special unemployment allowance that will be paid to beneficiaries will be considered for the purpose of income calculation for the payment of the Minimum Guaranteed Income (EEE).
    6. The decree is enforced as of March 16th 2020.

The full Decree in Greek with the relevant Appendices can be found on https://www.coronavirus.mlsi.gov.cy/

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