COLA increase of €3.49 to be supplemented by €15 or €35 one-time bonus

● Pensions will increase by €7 per week including COLA ● Disability, invalidity pensions increase to reach national minimum wage ● Equity Sharing Scheme expanded to those below 40 years of age

The government has unveiled a raft of improved or totally new social measures, with increases in pensions, tax refunds, new equity sharing schemes, and disability and invalidity pensions increases all featuring in Finance Minister Edward Scicluna’s speech.

The cost of living adjustment (COLA) will be of €3.49 per week; an increase which will apply to all workers, pensioners, and persons on social benefits. Student stipends will, meanwhile, increase on a pro-rata basis.

However, Scicluna said, the government has noted that the price increase of certain products may not have been catered for in this, meaning that an additional financial bonus will be given to families. This will be financed solely by the government, and will be €15 for a single-person household or €35 for a more than single-person household.

For the third year running, workers will be getting an extra day of leave, while a tax refund which has been given out by the government in the past two years will be given once again in a measure which will affect 200,000 people and which will cost the government some €11.5 million.

Measures pertaining to overtime will also be introduced come 2020, with the first 100 hours of overtime in the year for workers whose salary does not exceed €20,000 annually and who does not work in a managerial position will be taxed at 15 per cent. The measure is expected to cost the government €5.3 million.

Scicluna moved on to explain that measures will be introduced to continue the fight against precarious employment, noting that it is now time that even in the private sector it is seen to that people working for private contractors can enjoy the same basic pay for the same work.

“We are also going to see that any employer observes the law on the payment of social security contributions. It will not be tolerated anymore that employers, after deducting social security contributions from their employee’s salaries, do not pass this payment onto the government, with the consequence that the employee will, in the future, not have the sufficient amount of contributions to qualify for a higher pension,” Scicluna said before noting the lawbreakers will have a chance to regulate their position or else the government will take the necessary steps against them.

Pensions increase by €7 per week including COLA

Pensions, meanwhile, will be increased for the fifth year in a row, with this year’s increase being €3.51 per week. Scicluna noted that, when combined with the COLA, this means that Malta’s 92,000 pensioners will have their pensions increase by a total of €7 per week, or €364 per year.

As a result of this, the maximum income from pensions that will be exempt from taxation will also increase to €13,798 per year, while the same exemption for couples with one pension will increase by €2,000 to €15,798 per year.

Scicluna also unveiled a measure wherein retired members of the police, army, civil protection department, and prison members who have started working elsewhere will be able to see their pensions increase, while there will also be pension increases for those who hit the pensionable age in the civil service or public sector between 2016 and 2018 but kept on working without receiving their pension for at least a year.

There will be a €200 increase in service pensions which is ignored in the assessment for social security pensions, meaning that the total sum here will reach €2,666. There will also be a bonus of between €200 and €300 for those who did not pay enough social security contributions to qualify for a pension which will be given even after the person reaches 75 years of age.

Widowed pensioners with children under the age of 18 were previously entitled to an allowance of €4.54 per week if they worked, or €9.32 per week if they did not, but this will be amended to €10 per week irrespective of the person’s employment status, hence not penalising those who work anymore.

€13 million will be allocated to address old injustices and anomalies in pensions, where a total of 8,000 people are eligible for payments while fiscal incentives for individuals who invest in third pillar pensions and employers who offer Voluntary Occupational Pension Schemes will be offered for another year.

An improvement of €50 per year will be made to the supplementary help given to persons, mainly the elderly, with low income, while €300 will be given to around 30,000 persons over 75 years of age and €350 to 18,000 persons over 80 years of age who all live in their homes or with relatives will also be given. This will also, for the first time, spread to around 900 elderly people who live in private residential homes.

Government Saving Bonds will be released once again for the elderly after 24,600 pensioners invested almost €3 million. A total of 6,300 new elderly persons will be eligible to invest in these bonds.

4,000 families to benefit from €300 child-birth or adoption bonus

Scicluna announced that due to a number of measures, the government had reached its aim where no child under 16 is living in a family with at least one full-time working parent which is at risk of poverty. This is, Scicluna said, based on Caritas figures before noting that the help given to these families will continue to be sustained.

Around 4,000 families per year will benefit from an all-new €300 bonus for every birth or adoption.

Disability, invalidity pensions increased to match national minimum wage

The final phase of a reform in disability pensions will be completed in 2020, Scicluna said, with weekly payments in this regard increasing to €161.40, which puts it at the same level as the national minimum wage. The national invalidity pension will also increase be increased to the national minimum wage.

A grant for the purchase of specialised equipment for persons with disability will once again be given, with this being capped at €400-€1,000 more than before.

The medical criteria for disability assistance will also be widened to include those who are either deaf or mute when they turn 16, while there will be improvements in the law to help vulnerable persons who suffer from disabilities or illnesses.

Parents who are forced to stop working to care for children who have rare diseases will see their social security contributions covered for up to eight years while they are out of em

ployment, meaning that leaving employment will not affect their pension.

Fibromyalgia and Myalgic Encephalomyelitis (ME) will be included on the government’s list of conditions eligible for help, meaning that persons unable to work due to these conditions will, subject to eligibility tests, be able to receive medical help.

Another change will be in the sickness benefit, which will see those being treated at Sir Anthony Mamo Oncology Centre given additional help in the case of regular medical treatment while they are still working.

Equity Sharing Scheme for persons below age of 40 introduced, capped at €17,500

Existing housing schemes such as tax reductions for first-time buyers, second-time buyers, vacant properties in urban conservation areas, buyers of properties in Gozo, and refund schemes for restoration works will all be extended for another year, and in fact first-time buyers will now be exempt from stamp duty on purchases of €175,000 as opposed to €150,000 which will equate to €6,500 in savings.

A reduction in stamp duty for those who buy the house they are living in, even if not first-time buyers, was also announced while persons who are living in a house which they inherit will see a reduced rate of 3.5 per cent duty for the amount of €175,000 as well.

An Equity Sharing Scheme for those below the age of 40 years old will be introduced, wherein the government, in agreement with banks, will lend the amount necessary for a 10 per cent home loan deposit. The amount will be capped at €17,500 and will have to be paid back within 15 years, although the interest will be covered by the government itself.

Benefits for social housing and affordable housing will be further extended, with the maximum income for a person to be eligible for these benefits being increased from €14,500 to €19,000 in the case of a single person, and from €28,600 to €32,000 in the case of a couple with two children.