UHM proposes €900 in-work benefit for parents on minimum wage

Union Haddiema Maghqudin today proposed the introduction of a in-work benefit to encourage unemployed parents to enter the labour force.

In its 2014 Budget proposals, the union is proposing the introduction of a €900 per child in-work benefit for parents on social welfare who take up work. The in-work benefit would be granted over and above the children allowance benefits.

This measure would cost the taxpayer €1.8 million annually, UHM secretary general Josef Vella said.

Currently persons on the minimum wage earn € 697 a month while all families with children earn €450 per child and families on the minimum wage earn €527.

Vella explained that the union holds that the welfare system should be reformed to ensure that the unemployment trap "no longer confines beneficiaries to a life-time dependence on social benefits."

He said this can be achieved through a gradual tapering system in which unemployed persons who find work have their benefits tapered over a three-year period. These would be set at 75% in the first year, 50% in the second and down to 25% in the third year.

UHM secretary-general presented the union's proposals divided in six sections, with the main proposals centering around tapering social benefits and pension reform.

"The union is not against third pillar pensions, but we are being realistic and the country should not sweep away the problems relating to pensions by hastily introducing third pillar pensions."

Pointing out that studies showed that only 25% of workers can afford a third pillar pension, Vella said that the government should firstly make a clear commitment towards setting up second pillar pensions, since Malta was one of very few countries in Europe which has yet to introduce them.

"We do not expect the government to introduce the second pillar pensions in the forthcoming budget, but at least a target date for their introduction should be set," Vella said, adding that the government should also assure the sustainability and adequacy of first pillar pensions.

The union is also calling on the government to ensure a decent income to pensioners by introducing a Guaranteed National Minimum Pension and granting parts of services pensions which are forfeited.

Vella also proposed the revision of rules governing the central co-operative fund and lower the minimum membership requirements for setting up new co-operatives from five to three.

UHM are also calling on the government to explore the social enterprise concept for disadvantaged persons such as former convicts.  

The union is also proposing the extension of subsidies on photovoltaic panels, solar water heaters and insulation material. In addition, UHM called for a rebate on energy efficient appliances.