Is GMI making our Gen Zs lazy?

The government’s GMI (Guaranteed Minimum Income) scheme provides financial support to around 17,000 families, and some 22,000 people in total.

One common criticism, though, is that the scheme acts as a disincentive for people – especially young people – to look for work, since they can get a monthly ‘salary’ while doing nothing. Does guaranteed money in the bank make Gen Z lazy?

GMI, established in 2014, operates on the gap between needs and income, according to Christos Diomedous, press officer of the Welfare Benefits Administration Service.

Income can be salary, pension, unemployment benefit and so on. Basic monthly needs, meanwhile, are assessed as follows: €480 for the applicant, then an additional €240 for their spouse, then €240 for every unmarried child between the ages of 14 and 28, then €144 for every child under 14.

In addition, GMI includes a housing allowance, “so if they’re renting they’re entitled to more,” Diomedous told the Cyprus Mail. “There’s a formula according to the person and the district” – around €200-250 depending on the city, with Limassol being the most expensive.

Cypriot and EU citizens, permanent residents and recognised refugees (though not asylum seekers) may all be eligible for the scheme. If the applicant is married, a single parent, an orphan, or has a disability, there’s no age requirement, otherwise they must be over 28.

Thus, for instance, a young couple with two children under 14 would be eligible for €1,008 in basic needs, plus the rent allowance, assuming neither parent was working.

That’s still very little money for a family. However, in the alternative scenario where one parent worked a minimum-wage job while the other stayed home, they’d be getting a gross salary of €1,088, which is much the same – and of course the GMI option means they have free time to work informally or ‘under the table’, as many do, so it may indeed discourage someone from joining the job market.

Or take the case of an idle, unmarried 29-year-old who lives with their parents, rent-free, and chooses not to work. He or she is still eligible for a monthly €480 in basic needs.

In fact, even if they worked they might still be GMI-eligible, since salary is not deducted in full: the first €170 of gross salary isn’t taken into account, rising to the first €512 for those with a disability. So our hypothetical idler could receive €170 a month from some kind of part-time work, fritter the rest of their time away, and still end up with €650 (480+170) in spending money.

These are the kinds of scenarios that have people grumbling about freeloaders taking advantage of the system, often followed by a gripe about Kids Today and their terrible work ethic. However, Diomedous is quick to counter such criticism.

“If you were talking about 12 years ago, that might be valid,” he says – meaning the days before the current scheme, when welfare benefits were handed out without strict safeguards.

There are about 17,000 families on GMI, as already mentioned. “Out of those 17,000,” says Diomedous, “16,000 [of recipients] are either disabled, or unable to work – meaning they have serious health problems – or else they’re elderly.

“So, only 1,000 of these families include people who are able to work. And those 1,000, we chase after them constantly.

“If they’re foreigners, we send them to learn Greek. If they’re Cypriots, we’re constantly sending them to training schemes and community work placements. All the time!” An unemployed person on GMI has to register as a job seeker and be actively looking for work – “and we check every month… The first time he refuses a job, we cut his benefit”. So much for the young idler sponging off the system.

Above all, the difference between GMI and older schemes comes in the level of state control – and indeed surveillance, with AI tools now being used to check applicants’ financial transactions.

Banks are required to supply information. “We know exactly how much money people have in the bank,” says Diomedous, “what property they own, what car they bought, what car they sold…”

In fact, he says, “we know everything about their financial situation” – not just with regard to GMI but social and welfare benefits in general, which add up to almost half a billion euros (about €450 million) a year in Cyprus.

Diomedous, it must be said, is very enthusiastic about what he calls the ‘Smart Social Economy’ which is now being created.

“What is unfolding in Cyprus is more than administrative reform,” he writes in an emailed statement. “It is the deliberate construction of a welfare system built for a new era.

“Under the Smart Social Economy framework, artificial intelligence tools, digital platforms and automated services are reshaping how the state listens, responds, and delivers.

“Decisions that once took months are accelerated, verification becomes smarter, and services are designed around people rather than procedures.” As an example, he says, processing times for GMI applications have been reduced to 60 days.

Far from being exploited by deadbeats and freeloaders, the system appears to be robust, and running like a well-oiled machine – “a welfare system that is proactive rather than reactive,” to quote Diomedous.

The truth, however, despite the ambitious language, is that no system can ever fully meet all the various demands – and limitations – of those it serves, and making it ‘smarter’ is often a hindrance rather than a help.

Thus, for instance, Nicosia resident Annita Dionysiou told the Cyprus Mail of her disabled 77-year-old aunt who’s functionally illiterate and has no close family, all her siblings having passed away.

How is someone like that supposed to apply for GMI, especially online? “Lots of people don’t know how to complete the forms, or don’t know if they’re eligible,” notes Dionysiou. “It’s all electronic.”

Even if the elderly or disabled are informed about GMI, the paperwork will often defeat them, the form having to be submitted with certificates from banks, mukhtars and so on. Help is seldom forthcoming, welfare offices being forever short-staffed.

“If it hadn’t been for me, to prepare the application, she wouldn’t have got anything,” she says of her aunt.

Deserving applicants falling through the cracks is one headache, undeserving ones crawling in through loopholes is another. That initial criticism about Gen Z laziness isn’t totally unfounded. Despite all the safeguards and high-tech tools, it’s still possible for a hypothetical work-shy applicant to game the system.

“How do they do it? They bring us a doctor’s certificate, saying they have mental-health issues,” admits Diomedous. “That’s our biggest problem.”

If someone is determined enough – and willing to pose as psychologically unstable – the state has no choice but to classify them as ‘unable to work’, meaning they can’t be harried to get a job and can go on receiving GMI, though of course any change in their bank account will be flagged by the AI assistant.

In the end, GMI becomes a kind of game between recipients trying to milk it and authorities trying to control it.

That said, its existence – with or without a ‘Smart Social Economy’ – is undoubtedly welcome, a flawed but necessary bid to establish a baseline in a grossly unequal world.