Budget 2025: €250 increase in children’s allowance

Finance minister Clyde Caruana announced an additional €250 in children’s allowance per child. 

The increase aligns with a pledge made in the ruling party's manifesto to raise the allowance by €450 during this legislative term.

In his budget speech, Caruana also announced that government plans to introduced a change that excludes both social security contributions and income tax from the income used to determine allowance eligibility. This adjustment, anticipated to cost around €16.5 million, will affect approximately 42,000 families with a collective 63,000 children.

These new measures disregarding social security and income tax will apply here as well, meaning the benefit will be calculated on a lower net income. Approximately 25,000 families, with a total of 40,000 children under 23, are expected to benefit from this expansion.

In his speech, Caruana also introduced a €500 annual allowance for children still in education beyond the mandatory age. This payment, made over a three-year-period, will assist 10,500 families in 2025, with an estimated annual expenditure of €6 million.

Addressing Malta’s low birth rate, Caruana announced an increase to birth and adoption bonuses. He explained that this year, families received €500 for their first child and €1,000 for subsequent children. Now, the third child or more will trigger a €1,500 bonus, with around 580 families expected to benefit.

Additionally, the marriage grant has been raised to €500 per spouse, totaling €1,000 per couple. 

With regards to IVF, the finance minister explained that currently, employed parents benefit from 100 hours of additional paid leave per treatment cycle—60 hours for the prospective mother and 40 for her spouse. Beginning next year, self-employed parents will be eligible for equivalent compensation, with maximum benefit payments calculated based on the national minimum wage.

Similarly, paternity leave of 10 days or 80 hours will now extend to self-employed fathers, with the payment reflecting the national minimum wage.

On foster families and residential care homes play, Caruana announced an increase in the weekly fostering allowance. This benefit, which supports children under 21, will rise by €10 per week to €120, amounting to €6,240 annually for each child in care.