Menu
Economy

MEMO on property for social insurance debts

March 5, 2019 at 9:05am
Edited by

The Labour Ministry will be applying similar measures  as regards unpaid social insurance contributions to those implemented by tax authorities.

A draft bill that has been tabled before Parliament provides for the seizure and foreclosure of movable property before and after the commencement of criminal proceedings before a Court and the acceptance and registration of an encumbrance on the debtor’s property.

According to the bill, anyone delaying  payments to the Social Insurance Fund in regard to contributions and due surcharges which exceed €3,000 – excluding the amount of contributions and surcharges for which not all administrative and judicial procedures provided for  have been exhausted – then deposits of either the employer or self-employed will be blocked.

The amount to be blocked will not exceed that which is due for the contributions and additional fee. In addition, the amount of deposits belonging to an employer or a self-employed that could be blocked should not leave the debtor’s bank account with less than €2,000.

A MEMO will be issued after one fails to pay the due amount of contributions and additional fee of up to €5,000, excluding the amounts for which all administrative and judicial proceedings have not been exhausted. The freezing of property will act as a guarantee for the payment of the due amount of contributions and additional fee.

The Government believes that these measures by the Ministry of Labour will have indirect financial costs for affected businesses due to the committals paving the way for the collection of the due contributions. These could also have a potential impact on the development of these businesses.

For the implementation of the new provisions, the strengthening of the Social Insurance Service in human resources and logistics infrastructure is essential. More specifically, a mechanism and additional staff for the implementation and inspection of the new legislation will be needed.

Read more:

Cyprus ranks first in European Social Fund absorption for 2018