Minimum pension to reach 60% of minimum wage by end of legislature

The government plans to gradually increase the minimum pension to 60% of national minimum wage before the end of the legislature, Social Policy Minister Michael Farrugia has declared.

He admitted that whilst the government had “succeeded in improving the lives of some 22,000 people” and lifting many out of poverty, more could still be done.

 “All pensioners today have an income higher than that set by Caritas. This is a feather in our cap, however we want to make sure that these people are not a statistic and we want to lift them out of the risk of poverty,” Farrugia told a news conference on pensions.

He said that this year, the weekly contributory pension received by single pensioners will be increasing from €127.81 a week in 2015, to €162.02 a week, when one factors in the supplementary allowance. Married couples will see their pension rise to €164.84 a week when compared to the 2015 level of €143.51.

Farrugia welcomed the latest EU country report on Malta, which did not mention the pension system: “It is clear from previous reports that there was concern about this subject.”

“The previous pension reform was only going to see those receiving a pension in 2027 benefit. We criticized it then and we are in government and we are going to ensure that everyone benefits.”

Another budgetary measure is the widening of tax bands on pensioners’ income. Farrugia said that this measure will see single pensioners be exempt from paying tax on their first €10,500 in income. The level increases to €13,000 for married pensioners. The minister explained how during 2018, this will increase to €13,000 for single individuals and €14,000 for those who are married.

He also said that as a result of these increases, benefits for the sick will also increase to €153 a week from €140. This is because of the fact that their level is linked to the national minimum pensions, which will be increasing, said Farrugia.

In the coming weeks, the government will be launching a financial literacy project aimed at young people. According to Farrugia, there were many pensioners, who over the course of their working life, had not paid social security and were now struggling to cope.

“We must make sure that the difference between the working wage and one’s pension is as small as possible for future generations,” he said.