Achieving social justice through financial support and benefit compliance

Achieving social justice through the provision of social benefits and services is pivotal to any social welfare system.

The Income Support and Compliance Division’s (ISCD) forms an integral part of the social security framework within the Ministry for Social Policy and Children’s Rights as it primarily delivers non-contributory financial support to vulnerable persons and citizens suffering hardships because of circumstances beyond their control.

Concurrently, it is assiduously engaged in weaning off ablebodied persons from inactivity and benefit dependency through the promotion of a package of labour market initiatives aimed at making work pay. The package comprises the work benefit scheme and the tapering of social benefits.

Through the tapering scheme, social claimants are allowed to retain part of their benefits when they get employed. In the first year of their employment they retain 65% of the benefit to which they are entitled, and in the following two years the retention rate is reduced to 45% and 25% respectively. Along with them, employers are assigned 25% of the benefit throughout the three years of the scheme.

The scheme which was launched in 2014 was followed the year after with the roll-out of the In-Work Benefit scheme. Besides incentivising work, the scheme is designed to boost the disposable incomes of low-tomedium income households, where married and single parents are in employment and have dependent children up to 23 years of age. The scheme also covers families where one of the spouses is in employment.

The benefit rates are pegged to a range of income thresholds and are payable to each child in the family. The rates have been repeatedly increased and, simultaneously, the income threshold spectrums have been broadened.

The Making Work Pay framework has been a remarkable success. Aided by rapid economic growth, it has managed to cut down the number of claimants on social assistance and unemployment assistance to record low levels. The number of persons on social assistance has declined by 55% and those on unemployment assistance by 93%. Furthermore, the policy triggered off a greater participation of women in the labour market, generating a contraction in the gender employment gap.

The thrust of the Division’s endeavours has not just been directed towards persons who are able to work but also to those whose disabilities cut them off from the labour market. To this end, in 2017 the Division piloted a reform in disability assistance which spawned two new benefits – the Increased Severe Disability Assistance (ISDA) and the Severe Disability Assistance (SDA). ISDA was purposely created for persons who are precluded from working because of their disability. Their benefit rate is equivalent to the net national minimum wage. On the other hand, SDA is aimed at those persons who notwithstanding their physical disability can be gainfully employed. Since the introduction of these benefits the number of beneficiaries has gone up from 3,080 in 2016 to 4,600 in 2021.

Another significant reform was carried out in the carer’s sector with the introduction of the Carer’s Allowance and Increased Carer’s Allowance to support persons taking care of relatives with low or high dependency living in the same household. The award of these benefits is no longer tied to a means test, but is solely determined by a medial assessment of the patient based on the criteria of the Barthel Index or the Mini Mental State Examination. Even here, the reform spawned a greater number of such carers thus enabling more elderly persons to remain living in the community. According to annual figures released by the National Office of Statistics, the number of beneficiaries of the care benefits shot up from 410 in 2016 to 1,830 in 2021.

In continuation with the reform, last year we introduced the Carers’ Grant for parents who have to stay at home to take care of children with severe disability.

The Division’s pro-activeness came to the fore in 2020 and 2021 with the expeditious packaging and delivery of ad hoc benefits to ease the impact of Covid 19 on families and vulnerable persons. These included an additional unemployment benefit for persons who were laid off in the private sector; an allowance for working parents who had to stay at home to care for their school age children; and a grant payable to medically vulnerable, pregnant or disabled employees who were precluded from reporting to work and unable to telework.

The efficiency with which these benefits were rolled out have been recognised this year with the award of a certificate of merit by the International Social

Security Association - ISSA. The Association recognized the effective and efficient response of Malta’s social security administration to the COVID-19 challenge and how this major threat was addressed and turned into an opportunity for improved service delivery.

While we remain committed to ward off persons from benefit dependency, we aim at intensifying our efforts to be of further assistance to vulnerable persons and persons with a disability. But at the same time, we will remain vigilant to curb benefit fraud and make sure that benefits are delivered to truly eligible claimants. Such scrutiny is carried out in the initial stages of an application for a non-contributory benefit and through initiatives embarked within the area of benefit compliance. Through such work more than €5m have been ‘saved’ from being paid out to ineligible or fraudulent claimants, which funds could be put to better use to meet other social welfare needs. Thus through this work we also ensure to achieve social justice.

Ray Chetcuti is Director General, (Income Support and Compliance Division), Ministry for Social Policy and Children’s Rights.