The budget and pensions Three case studies
Asked by The Malta Independent on Sunday how the pension tweaks from the budget affected people on a tangible level, the government provided three real life examples of what it is trying to achieve along such lines, as follows.
John is a retired civil servant. He is now a widower. His combined pension income is €13,000, partly from social security and partly from his treasury pension.
Before the changes in tax rates announced in the Budget he used to pay €585 in income tax.
Next year, his tax bill will fall to €375, a saving of €210 compared to this year.
In 2018 his tax bill will fall to 0, meaning that he will be €585 better off.
Lawrence and Doris is a pensioner couple. They had migrated to Australia, so Lawrence receives a pension from overseas. Together with his Maltese pension, this gives them an income of €14,000.
Before the changes in tax rates announced in the Budget, they used to pay €195 in income tax.
Next year their tax bill will fall to €75, a saving of €125 compared to this year.
In 2018 their tax bill will fall to 0, meaning that they will be €195 better off.
Lawrence and Doris will also be getting an increment of €221 in their pension as a result of this Budget.
Thus, taking into consideration their tax savings and their benefit increases, they will be €416 better off.
is a widow. After the changes in the widow’s pension made in last year’s budget, her widow’s pension rose from €10,000 to €12,000.
However she had lost part of this increase, as her tax bill rose from €135 to €435 as a result of her higher benefit.
After the change in tax rates made in this year’s budget, this will no longer be the case. Next year, Rita’s tax bill will fall from €435 to €225.
In 2018 Rita will not be paying any tax. This means that compared to her position two budgets ago, her disposable income will have increased by €2,135.