Pen­sion mea­sures to cost gov­ern­ment about €20 mil­lion over two years

Malta Independent - - NEWS - He­lena Grech

Bud­get 2017 pen­sion mea­sures are to cost be­tween €21 and €22 mil­lion over a pe­riod of two years, Fi­nance Min­is­ter Ed­ward Sci­cluna ex­plained at a press brief­ing yes­ter­day.

A to­tal of 20 bud­get mea­sures are aimed to­wards pen­sion­ers and the el­derly, rang­ing from tax cuts to low­est pen­sion earn­ers to sub­si­dies for home car­ers.

Fi­nance Min­is­ter Ed­ward Sci­cluna to­gether with Fam­ily Min­is­ter Michael Far­ru­gia gave an over­view of how each mea­sure is go­ing to im­pact the more vul­ner­a­ble sec­tions of so­ci­ety.

Pro­fes­sor Sci­cluna ex­plained that a cer­tain per­cent­age of ex­pen­di­ture in­creases from year to year ir­re­spec­tive of new mea­sures in­tro­duced.

There­fore, a small pro­por­tion of the €20 mil­lion spent in this sec­tor is un­avoid­able.

This amount of spend­ing may seem high how­ever in view of the €2,401.8 mil­lion spent on gov­ern­ment ex­pen­di­ture be­tween Jan­uary and Au­gust 2016 the €20 mil­lion fig­ure is put in the rel­e­vant con­text.

An in­ter­est­ing new mea­sure which has been pro­posed for 2017 is the op­tion for pen­sion­ers to buy gov­ern­ment bonds at rates of in­ter­est that are more favourable then cur­rent mar­ket rates.

Pro­fes­sor Sci­cluna said that while he can­not re­veal the rate of in­ter­est but con­firmed that they are more favourable and that the bonds will ma­ture af­ter six years.

He said this is the best op­tion for pen­sion­ers who wish to earn some­thing ex­tra and for the gov­ern­ment.

Mea­sures aimed at help­ing the el­derly and pen­sion­ers in­clude ex­tend­ing sub­si­dies to el­derly peo­ple who em­ploy car­ers in their home, for a max­i­mum of €5,200 on a full time ba­sis, the launch­ing of pi­lot project in­volv­ing 100 fam­i­lies will see the draw­ing up of a seven-year con­tract for low-in­come fam­i­lies rent­ing prop­erty from pri­vate in­di­vid­u­als, car­ers al­lowanced in­creas­ing by €90 per week, the en­cour­age­ment of hav­ing el­derly peo­ple live at home through al­lowances for car­ers to cover peo­ple with dif­fer­ent lev­els of de­pen­dence, a €300 grant to be given to peo­ple aged over 75 and pen­sion­ers will also be get­ting a rise in their pen­sion by €225 per year through the cost of liv­ing ad­just­ment and a sup­ple­men­tary ben­e­fit.

Per­sons 61 years or older will not be pay­ing in­come tax on their pen­sion un­less up to €13,000.

In the event that the pen­sioner has some other form of in­come, the first €1,000 will be tax free. This re­form will be spread over two years and it is ex­pected that pen­sion­ers will have saved up to more than €585 each year.

Sin­gle pen­sion­ers will ben­e­fit from tax re­duc­tions for those who earn up to €10,500 yearly, which will in­crease to €13,000 in 2018.

Dr Far­ru­gia spoke of the up­wards re­vi­sion of thresh­olds for means tests of as­sets.

For cou­ples, the new thresh­old is as­sets worth up to €7,000 and for sin­gle per­sons €1,700. He said that this will im­pact some 1,000 peo­ple.

Pro­fes­sor Sci­cluna ex­plained that three years of gov­ern­ment mea­sures that in­cen­tivised peo­ple to en­ter work, such as free child­care, has had a dis­tribu­tive ef­fect and leads to an in­crease in dis­pos­able in­come.

Peo­ple are en­cour­aged to in­vest in pri­vate pen­sion schemes in view of this. The in-works ben­e­fits could lead to a sit­u­a­tion where in­crease in in­come is not nec­es­sar­ily re­flected in fu­ture pen­sions.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.