12,000 people in poverty to benefit from new pension increase

Some 12,000 pensioners at high risk of poverty stand to benefit from the newly announced pension increase. 

Social solidarity minister Michael Farrugia told a press conference that this budgetary measure was the first step towards a national minimum pension, which is expected to fully implemented in 2027.                                                 

The final national minimum pension will be calculated as 60% of the average wage.

This initial measure will target those pensioners at highest risk of poverty, and will ensure that no pensioner earns less than €7,280 per year, or €140 per week.

Farrugia explained that pensioners aged 75 and over living in poverty will see their pensions increase by an average €8.92 increase per week.

Those under 75 will see an average weekly increase of €8.

Other new pension schemes include the provision of social contribution credits for new mothers and tertiary students, so as to boost Malta’s low birth rate and encourage more people to study at tertiary level respectively.

Farrugia suggested that some people are put off from studying or giving birth because both would mean sacrificing working years and hence placing them at risk of not meeting the social contribution quota when they reach retirement age.

“The government wants to incentivise more people to study at tertiary level,” Farrugia explained. “Besides, tertiary students are more likely to find high-paying jobs and hence pay higher levels of social contribution.

“The same logic applies for mothers who give birth. The more new babies are born, the more social contributions will get paid when they reach working age.”  

While the retirement age won’t be increased, people born after 1968 will have to pay 41 years' worth of social contribution in order to receive a state pension, up from 40 years currently.

Moreover, a streamlining exercise will be carried out to simplify the process of applying for carers' pensions and social assistance to carers, amalgamating the two so they are overseen by the same board. 

The government will also be paying half the minimum wage of live-in carers, who move in with elderly clients and help them with their day to day needs.

Farrugia said that around 200 pensioners will benefit from this measure, which is also expected to create new jobs in the caring sector.