The cabinet approved on Thursday a €12.5 million reform of child benefit that will increase payments for lower income families and widen income thresholds, with the measures due to take effect from January.

Deputy Social Welfare Minister Tina Pavlou said the reform would benefit some 17,000 families and 23,500 children, while also addressing the previous situation in which small increases in household income could abruptly result in families losing their entitlement.

Under the changes, child benefit will increase by 10 per cent for families with annual incomes of up to €22,000 and by 5 per cent for families with incomes of up to €44,000.

The income threshold for families with three children will rise to €90,000, while the limit for families with four children will increase from €69,000 to €100,000.

For families with five or more dependent children, there will continue to be no income criteria, as decided by the government last year.

Pavlou said the reform removed a “distortion that existed over time”, whereby families could lose support following a small increase in income.

“This will no longer apply to any category,” she affirmed, adding that the wider income thresholds would prevent small increases in earnings from depriving families of benefits.

The reform also includes an extension of tuition support for children up to the age of four years and four months.

President Nikos Christodoulides said the measure would benefit about 2,000 families and 2,800 children.

Pavlou said the government was also combining financial support with services, including assistance connected to school costs and feeding programmes.

“Two thousand families in view of this reform will be able to benefit from a subsidy related to the school,” she said.

“And 2,800 children will be able to benefit from the subsidy and feeding programme related to the education system.”

Christodoulides announced the measures on Sunday, ahead of the start of the new school year, describing the package as an important reform to strengthen support for families with children.

“The maximum income limits for families with three and four dependent children are now set at €90,000 and €100,000 respectively,” he said, saying this addressed calls for greater support for middle class families.

He said the government’s aim was to increase disposable income by returning the benefits of economic growth to society through targeted policies in education, health and welfare.

The reform will now be submitted to the House for approval before it can take effect.