Donation does not exonerate social security recipient from explaining how money was used

The Social Security Department must be certain that a cash donation was not used by an applicant to be eligible for medical assistance that is means tested.

This was held in a judgment delivered by the Court of Appeal on 26 November 2025 presided by Mr Justice Lawrence Mintoff. The case was Rita Psaila vs Director General (Social Security).

The director general (the defendant) had filed an appeal from a decision delivered by the Arbiter for Social Services. The case concerned a decision taken by the director general in August 2024 to reject an application by Rita Psaila for medical assistance. The director general argued that Psaila had over €14,000 in capital and therefore did not qualify for assistance. From investigations it resulted that Psaila sold an undivided share of property in Rabat for €140,000. On the same day of the sale, she donated her share to her daughter. At the time she did not receive medical assistance and she was employed.

Psaila went to the Arbiter for Social Services and contested the director general’s decision to reject her medical assistance application.

The Court of Appeal reproduced the arbiter’s decision, which pointed out that at the time when Psaila applied for the assistance, she did not possess €14,000. The sale of the property took place 10 years before her medical assistance application. Caselaw dictated that the transfer of assets of an applicant must be relevant. The arbiter said the time between the sale of property and the application of social assistance had to be taken in consideration. In this particular case, the sale took place n 2012. The application for social assistance was filed 10 years later in 2022. The arbiter argued that the reasoning of the director general would create a barrier to the free movement of capital and the sale of assets. People may decide not the sell the property in order to retain their social security benefits, the arbiter argued.

The director general appealed from this decision on the grounds that the arbiter did not decide this case according to the Social Security Act. The law states that an applicant for social assistance must produce all certificates, documents and information that can have an impact on the application.

According to the director general, Psaila did not inform the department that she had received money following a sale of property. Neither did she inform the department of how she disposed of this money. According to Article 20(1)(c) of the Social Security Act for one to be eligible to medical assistance, that person must pass a means test. The director general argued that the sale of the property in 2012 should be included in the means test.

Psaila argued that once she was given the medical assistance, she did not exceed €14,000 in capital and the sale 10 years prior should not preclude her from receiving the benefit.

The Court of Appeal confirmed that from the acts of the case, the sale and the donation did take place in 2012. The court pointed out that Psaila received €140,000 following the sale of half of an undivided share of property of her son-in-law. She did not explain to the department what happened to this money when she applied for medical assistance. From the acts of the case, she sold her only property and went to live with her daughter. The Appeals Court upheld this ground of appeal.

It was up to Psaila to inform the director general on what happened to the money. It seems that after the donation, she now has less than €14,000 in her name. The judge ruled that the fact that the money was donated, does not mean Psaila did not need to explain how the money was used.

The Court of Appeal upheld the director general’s appeal and annulled the arbiter’s decision.