The scheme will cover the period until the end of June 2016, and aims at placing 1,000 unemployed into paying jobs.

The Council of Ministers has authorised the Labour Minister to make any amendments necessary for the purposes of securing co-financing from the European Social Fund or other changes, as well as any amendments required following a review of de minimis aid regulations.

According to the statement, the scheme has been devised following public dialogue with stakeholder groups.

It stipulates the provision of grants and sponsorships to businesses in order to incentivise the hiring of people falling in one of two categories – the general target group includes those listed as unemployed in the government’s employment database at the time of application to enter the scheme, and the special sub-group of those listed as unemployed in the government’s employment service for longer than six months at the time of application.

It was announced that all unemployed Cypriot citizens and foreigners living in Cyprus with legal access to the local jobs market are eligible candidates.

Following a severe banking crisis that culminated in the seizing of deposits in order to recapitalise Cyprus’ largest bank while winding down the second-largest in March 2013, Cyprus has been faced with economic contraction and dramatic unemployment. The most recent data showed an upward-trending 17.4% unemployment rate, while IMF forecasts indicate that this will exceed 19% in 2014 before dropping marginally to mid-18% in 2015. The long-term unemployment rate – those unemployed for over six months – has climbed to 6.4%. With over 70,000 unemployed in absolute numbers, the government felt it had to act to incentivise job creation.

According to the scheme’s provisions, sponsorships relate to financial support to employers to the tune of 50% of an employee’s payroll cost, up to €5,000 for applicants from the general target group. For applicants from the special sub-group, the scheme provides for the state sponsoring of 60% of their total payroll cost, up to €6,000.

The sponsorship will be available for the first ten months of employment and the employer will be obliged to keep the employee for an additional two months, with no additional sponsorship.

Applications will be accepted at specific time periods, which will be decided by the administrative body.

Should the budgeted amount be depleted prior to the announced conclusion date, the discontinuation of the scheme will be announced in the daily press. However, the statement noted that funds from previously announced schemes have been accumulated to finance the new scheme.

Source: Cyprus Mail