Budget 2025: Pensioners get further increase of €416 per year

Pensioners will receive a further increase of €8 per week or €416 per year, which includes the cost-of-living increase.

Over 100,000 retirement, invalidity and widowhood pensioners as well as others entitled to an old-age pension will benefit from this increase.

Together with the annual increases received by pensioners over 10 years, these increments have reached a total sum of at least €3,583, almost €70 per week.

“This means that what pensioners would have received in a full year’s pension 10 years ago, today they are receiving it in the first eight payments, with five more payments to go,” finance minister Clyde Caruana said.

In a bid to close a loophole in Maximum Pensionable Income between pre-1962 and post-1962 generations created as a result of the 2006 reforms, those born before 1962 and whose salary would otherwise still exceed the Maximum Pensionable Income of €23,500, will have a further adjustment in their pension. Some 26,000 pensioners are expected to benefit from this measure.

Tax exemptions for pensioners

Pensioner widows will benefit from an additional increase in their pension through the process allowing them to receive the full pension their spouse would have received if they had survived by 2027.

This adjustment affects around 7,500 widows and widowers. The additional increase will average around €3 per week, additional to the overall increase of €8 per week.

“In 2022 we started a process to remove the anomaly created in 2008 that led to pensioners receiving cost-of-living-allowances that varied depending on the year they retired. Now all pensioners will receive the same rate of that bonus each year,” Caruana said.

The adjustment of bonus rates will continue over the next two years, until the end of the process in 2027 where every pensioner will be entitled to the highest rate of €21.53 per week, which will then continue to be paid together with the pension and any other increases granted to pensioners in the future.

Service pensioners will again see the amount of their service pension not taken into account for the purpose of the social security pension, increased by a further €200 to reach the sum of €3,666. Around 3,250 service pensioners will benefit from this move, thanks to a measure where at the age of 72, the entire amount calculated from the service pension is no longer taken into account.

Bonus improvements for those who do not qualify for a pension

Persons who did not have enough NI contributions to qualify for a pension will receive a bonus according to the number of contributions paid. The bonus since 2015 this year will be €500 for those who paid up to four years of contributions, and €600 for those who paid five to nine years in contributions.

Bonus rates will now be calculated according to the actual number of stamps paid. These will range from €550 for those who paid up to one year’s contributions to €1,000 for those who paid up to nine years’ contributions.

This measure will benefit over 16,000 people, mostly married women.