National minimum pension to reach 60% of average wage by end of the next legislature
The national minimum pension will reach 60% of the average national wage by the end of the next legislature, Social Solidarity Minister Michael Farrugia said yesterday.
Dr Farrugia said a governmentcommissioned report had found that pensions could become adequate and sustainable without increasing the retirement age and national insurance contributions and without introducing second pillar pensions.
The reason was that the country was doing well economically, and more people were working and paying national insurance contributions.
Last year the government increased the national minimum pension to €140 per week. Pensioners who already received this amount have had their pension increased by €4.15 per week.
Pensioners will this year get an additional €4 per week. This figure does not include supplementary allowances and a full COLA increase. The minister said that the weekly contributory pension for single pensioners will be increas- ing from €127 in 2015 to €162 in 2017 while the pension for married pensioners will rise from €143 to €164. These are the biggest increases in decades, Dr Farrugia said.
There will also be a further widening of tax bands. Married pensioners will not pay tax on the first €13,500 while single pensioners will not pay tax on the first €10,500. These will be increased to €14,000 and €13,000 next year.
Dr Farrugia said these measures will affect some 22,000 pensioners over a two-year period.
Through other changes, a greater number of pensioners will be entitled to sickness benefits. The Social Solidarity Minister said previous PN administrations had planned to review pensions only after 2027. “We are taking care of today’s pensioners but we will also be taking care of tomorrow’s.”
He also pointed out that the government was working on improving financial literacy, whereby it was not only making sure that youths will have an adequate pension but also understand that they needed to invest in their own futures.