What's in it for you?

All the budget measures at a glance

COLA

COLA is €1.75 for all, including pensioners and anyone on benefits, while students will still be paid their COLA pro-rata.

EXTRA DAY LEAVE

Oh yes workers, unite and party as one extra day of statutory leave is added as part of Labour’s manifesto plegde to remove the 2005 law that removes public holidays when they fall on weekends. There is still no agreement on this matter with the social partners.

MINIMUM WAGE

Not a specific Budget measure per se but 2018 will be the first year when minimum wage earners will see a €3 increase in weekly wages for those who have already spent a year on minimum wage.

SALARY ARREARS

Continuation of settlement of dues for police overtime, dock workers, former Malta Electricity Board workers, para-statal corp workers, costed at €11 million. This will affect 6,000 beneficiaries and their heirs.

VAT REFUND FOR MOTORISTS

Continuation of seven-tranche payment for refunded VAT on cars acquired with incorrectly computed VAT charge.

HIGHER VAT EXEMPTION THRESHOLD FOR BUSINESSES

VAT exemption threshold for businesses and self-employed has now increased from €14,000 to €20,000.

SECOND-TIME BUYER SCHEME

While the first-buyer property scheme will once again be extended into the new fiscal year, the government is now introducing a second-home buyer scheme.

This means that home-owners who are selling off their first home, and buying a second property, will benefit up to €3,000 in exempted property tax. The acquisition will have to be carried out within two years of the sale of their first home.

The scheme is not intended at allowing a second-home buy, but only if a first home is old.

The government says the measure is intended at freeing up certain properties that may not be sold, by offering an incentive to free up the housing stock.

Two family models are earmarked in this measure: families and other homeowners who are moving up the property ladder, and older homeowners who are planning to downsize their homes after entering pensionable age.

EXTENSION OF UCA SCHEME & 2% GOZO PROPERTY TAX

The grants for restoration of UCA properties once again is extended, as is the reduced 2% property tax (down from 5%) on properties acquired in Gozo.

TAX REFUND ACROSS THE BOARD

Another Labour manifesto pledge, this will be the first tranche of a general tax cut for anyone earning up to €60,000: a cheque of anything between €40 to €68 will be paid out to taxpayers, who will be paid a higher cheque the lower their salary is.

The tax cut is being costed at around €10.6 million and will benefit over 200,000 taxpayers.

The tax cut will also be paid out to those on minimum wage and those whose salaries do not reach the minimum tax threshold.

 

PENSIONERS

  • Pensioners will be receiving an increase in contributory and non-contributory pensions of €2 a week. The measure will affect over 90,000 pensioners for a total of €9 million in outlay.
  • Second-year continuation for tax relief on pensions which in the last budget benefited 22,000 pensioners. This year will see an additional 9,000 beneficiaries. The ceiling for non-taxable pensions is now increased to €13,200.
  • An increase of €200 in the amount of service pensions that are subtracted from the social security pension, which will benefit 4,500 pensioners and costed at €1 million.
  • A grant of €350 will again be paid out to all those aged 75 and  over and still living in their properties.
  • A new measure will assist pensioners with missing social security payments. Pensioners who still work beyond pensionable age are still obliged to pay national insurance up until 65. In cases where pensioners, especially women, have missing NI payments and are not taking a full pension, a new measure will now allow pensioners from 65 years of age to compute their pensions as well as on the additional NI payments they submitted after pensionable age.
  • Pensioners younger than 65 years of age who are self-employed or part-time workers will be allowed to pay national insurance at a pro rata 15% rate on net income, and not on the full rate.
  • Continuation of the Government Savings Bonds 62+.
  • Sickness benefit will now be paid to pensioners benefiting from contributory pensions. This was not possible before and targeted widows who were still working and had dependent children under the age of 23. Under the new measure, these widows will be able to claim the sickness benefit.

 

ELDERLY IN HOMES

  • Elderly residents in government homes will be charged a smaller portion  - 60% - of their pensions if they release their social housing properties to the State.
  • The government says that elderly homes’ residents who live in rented government housing, do not release the keys of their houses and keep paying the rent on that house. One of the reasons is to allow their children to keep occupying that house.
  • The government will allow such tenants to retain this control on their government properties but will be offering an incentive to those who release the keys to the house so that it can be used once again for social housing.
  • This will be taking 60% instead of 80% of their pension for residing at St Vincent de Paul, and down to 40% for those residing in any private or Church-run home, including PPP homes.
  • The measure will allow such residents to claw back €1,350 to €2,700 in pension incomes.

 

EQUITY RELEASE FOR PENSIONERS

A working group will start devising an Equity Release Facility so that pensioners who are homeowners, can use the value of their property to finance their retirement expenses on a staggered, monthly basis; the property is later released to the paying company, for example, an elderly home operator, upon the death of the owner.

 

ROADS AGENCY

Creation of new ‘roads agency’ that will coordinate a massive €700 million road construction project spread over seven years.

 

FREE BUS TRANSPORT FOR THOSE AGED16-20

Free bus transport for every young citizen from the age of 18, who benefit from a free bus pass, will now be extended to all those aged 16-20 - not just students, but to all workers and young persons, in a bid to improve public transport patronage.

 

VAT EXEMPTIONS ON ELECTRIC TRANSPORT AND BICYCLES

  • Extension of full 15.25% VAT refund on bicycles and electric bikes, now also extended to all companies that offer these kind of vehicles for rent.
  • A new measure to incentivise the purchase of motor-cycles, scooters, and electric-engine bicycles with a maximum €400 grant. Additionally, apart from this grant, electric bikes will retain VAT exemption.
  • A new VAT cut on the rental of bicycles from 18% to 7%.
  • A new concept called ‘Share The Road’ will introduce two urban corridors, one from Valletta to St Julian’s and the other from Mosta to the University of Malta, so that urban streets are improved to facilitate better safety for cyclists and pedestrians.
  • This will involve the introduction of new CCTV systems and the reduction of the maximum speed in these roads, with electronic messages beamed so as to give priority to cyclists.

 

NO REGISTRATION TAX ON ELECTRIC VEHICLES

  • For the first time ever, electric vehicles, as well as hybrids and derivative vehicles with autonomous batteries of less than 80km, will be exempted from any registration tax on acquisition.
  • From 2018, no licence fee will be payable for five years on these vehicles, whilst commercial companies will benefit from a maximum €200,000 if they qualify for state aid rules. In 2018, the government will be issuing new incentives for the purchase of such vehicles and for the equipping of such engines.

 

GRANT FOR WHEELCHAIR-ACCESSIBLE TAXIS

A maximum grant of €10,000 for wheelchair accessible taxis (WATs), which cost more than regular taxis since they have a facility for wheelchairs to be lifted inside the taxi. Only €100,000 will be allocated for this measure.

 

GOVERNMENT TO LAUNCH STUDY FOR FREE PUBLIC TRANSPORT FOR ALL SCHOOL-CHILDREN

  • The ministry of education will be carrying out a study, and start discussions with all stakeholders, to introduce a system for the free public transportation of all school-children.
  • That means creating a plan so that children of all schools, government, private and Church schools, are grouped for their eventual transportation to schools. The plan is expected to be discussed for introduction for the 2018/19 scholastic year. The measure is intended at alleviating transport chaos due to different school transport schemes and parents opting for private transportation.
  • This might yet be a useful but also controversial proposal for some groups of parents.

 

WASTE COLLECTION

  • A pilot project to collect organic waste in a white bag is to start being applied nationwide across Malta and Gozo.
  • Discussions will also be held with the private sector to operate a deposit scheme on beverage containers - both glass and plastic - by 2019, so that consumers recieve a refund when depositing the empty bottles.

 

CREATION OF AMBJENT MALTA

A new environmental agency will be set up for the management of natural heritage sites - a sort of superintendence to manage Natura 2000 sites and to ensure that the countryside is rendered more accessible to citizens. Unspecified however, was the increase in littering fines “so as to instil more discipline amongst the Maltese”.

 

4,000 NEW TREES

The government has pledged to plant one tree for every child born. This will entail some 4,000 saplings planted every year.

 

€10,000 GRANT FOR ADOPTION COSTS

From 2018, parents will be entitled to a maximum €10,000 grant to cover costs, including travel expenses, incurred in the process of adoption. This will be granted to those couples who are already in the process of adoption. 

 

COMMUNITY WORKER SCHEME

In 2018, workers on the Community Worker Scheme will have a monthly €200 increase in their wages.

 

INCREASE IN CARERS’ ALLOWANCE

An additional €8.15 per week will be paid for any other family member who loses the right to any social benefit if they get a higher allowance. In this case, the family’s income and capital, excluding the increased allowance, will be used for means-testing.

 

HIGHER IN-WORK BENEFITS

The highest in-work benefit will increase from €350 to €450 for every child, while the lowest increases from €52 to €75 per child. The benefits will be kept even if a second parent enters the labour market, since the highest rate can go up to €1,200 for every child. This measure will ensure that no family with children under 16, where at least one parent is in full-time and on minimum wage, is living in poverty.

 

ORPHANS

Increase from €70 to €100 weekly for foster carers.

 

MAINTENANCE

Child maintenance will not be added to total income as part of the means test for the pink card medicinals’ allowance, which means parents, mainly women, in this situation can still benefit from this state subsidy.

 

TAX HOLIDAY FOR MASTERS AND PhD GRADUATES

A tax holiday of one year for Masters graduates and two years for PhDs on salaries of less than €60,000 if beneficiaries spend three years working in Malta after graduation.

 

REDUCTION IN EXAMS’ FEES

A further reducation in fees for exams for SEC and MATSEC, by 50% in 2018; in 2019, the fees will be removed once and for all.

 

More in Budget 2018