The Government is promoting a child benefit reform that will increase payments and widen income thresholds for eligibility, with the changes proposed to take effect from 1 January 2027.
The proposal was approved by the Cabinet on Thursday and will now be submitted to the House of Representatives, Deputy Minister of Social Welfare Tina Pavlou said following the Cabinet meeting at the Presidential Palace.
The reform carries a fiscal cost of €12.5 million and is expected to benefit 17,000 families and 23,500 children once approved by Parliament.
Higher payments for lower-income families
According to Pavlou, the child benefit reform will initially focus on lower-income families.
Families with an annual income of up to €22,000 will receive a 10% increase in their benefit, while families with income of up to €44,000 will receive a 5% increase.
The income threshold for families with three children will be raised to €90,000.
For families with four children, the threshold will increase from €69,000 to €100,000.
Income thresholds to be widened
Pavlou said the reform would also address what she described as a long-standing distortion in the system, under which a small increase in household income could abruptly make a family ineligible for the benefit.
“This will no longer apply in any category,” she said, explaining that the income thresholds would be widened so that small increases in income would not automatically deprive families of the benefit they are entitled to receive.
Support linked to school and meals
Pavlou stressed that benefit policies are not effective unless they are accompanied by services.
She said around 2,000 families are expected to benefit from a school-related subsidy under the reform, while 2,800 children will be able to benefit from an education-sector subsidy programme covering meals.
“Only by combining services with the benefit can we achieve results,” Pavlou said.
Reform awaits parliamentary approval
Pavlou said the reform reflects the Government’s focus on supporting families and carries a total cost of €12.5 million.
The child benefit reform is scheduled to enter into force on 1 January 2027, provided it is approved by the House of Representatives.
The next step is therefore parliamentary approval, after which eligible families will be able to benefit from the revised scheme.
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