A budget for equality and a better quality of life

These last few weeks’ public debate has been dominated by the budget. Many have discussed its economic implications. These are undoubtedly important, and yet debate has tended to ignore some measures that might not affect many but will still make a real difference.

The clearest example is the measure through which more than 3,000 women will become pensioners for the first time, joining another 4,000 women who gained this right recently. Until a few years ago, a person’s national insurance contributions belonged just to them. They could not be shared across couples, even if these would result in better pension entitlements. It was only if there was a separation or divorce that the spouse could gain access to their partner’s contributions.

In the last Labour Party manifesto, Int Malta, a proposal was made so that pensioner couples could share contributions if this could result in an improvement in their overall entitlement. This was made in light of the fact that many women in the past were made to leave the labour market upon marriage or upon motherhood. The amount of national insurance contributions they made till then were generally not enough for them to qualify for a pension. Moreover, they were also penalised in that they would not benefit from any national insurance credited periods if they did not have the minimum number of required contributions.

Budget 2027 has started to address this situation. Now, if a spouse has contributed in excess of the years required to qualify for a full pension, they can transfer up to 5 years of contributions to their spouse. These would then be added to any contributions that the spouse had made in their own right. If a woman had made five years or more of contributions, this transfer would make her qualify for a pension.

I believe that this reform addresses a gender inequality injustice that was imposed by society on our elderly couples in past decades. When one looks at the bulk of pensioner couples in Malta, most of them depend on just one pension, when in reality their joint contribution records would qualify them for two individual pensions. This new right is a very welcome development which will improve pensioner incomes, but more importantly recognise the contribution of women in families.

Similarly, the reform through which, for the first time, widows and widowers will qualify for a full pension is another step to reduce gender inequality. It made no sense that the pension entitlements gained through someone’s national insurance contributions are reduced when these entitlements pass to their spouse. Imagine that you have a joint bank account, which you have saved towards together. Then one of you dies, and the bank tells you that it will now reduce the amount you can withdraw because your partner is no longer with us.

Taken together, these two changes—the sharing of contributions across couples and the award of full pensions for survivors—mark an important chapter for women in Maltese society. For many decades, our society treated the contribution of these women as not equal to that of their spouse and penalised their income. It is only fair that this has now changed.

I also welcome another reform enacted in the budget, which has not been commented much on. In recent years, government had introduced another reform through which thousands of women started to receive an annual bonus as they had made national insurance contributions but not enough to qualify for a pension. The benefit for these women was steadily improved but unlike other social security benefits it would not automatically be increased in line with the cost of living adjustment. This changed with Budget 2027, and now these women, like other social security beneficiaries, will have the purchasing power of their benefit protected against inflation.

The budget has also introduced changes that will make a real difference in the life of those who need the most help. For instance, I welcome the introduction of 10 days paid leave for those who take on fostering, the increase in the adoption grant, the improvement in the carers grant and its expansion to those who work part-time. The introduction of the aftercare programme for youths and of national insurance credits for individuals with domestic violence, behavioural problems or mental health issues are also a sign of a society that is focusing more on those in need.

Next year the budget includes the highest ever financial allocation towards the treatment of rare diseases and for the introduction of new medicines on the formulary. It also introduces a mechanism through which parents of children with disability will start getting therapy costs covered by the state. These are progressive reforms that truly strengthen our society and ensure a better quality of life for all.