Budget 2024: Pre-1962 pension anomaly to be addressed starting next year

Finance Minister Clyde Caruana announced the pre-1962 anomaly will be addressed starting from next year.

People born before 1962 had their pensions capped at a certain amount, while people born after 1962 had seem their pension increase on a yearly basis.

"In 2006, the government at that time differentiated between pensioners born before 1962 and those born after. For those born before 1962, they guaranteed an increase only for the cost of living. For those born after 1962, they introduced a mechanism in the law to increase their pensions every year by a percentage where 70% is based on the increase in wages and 30% is based on the increase in inflation," Caruna said.

From next year, the same mechanism that has already been applied to those born in 1962 or later will also be applied to pensioners who were born before.

The capping was part of a reform into the country’s pension system enacted by the Nationalist-led administration in 2006.

Independent candidate Arnold Cassola raised the issue earlier this year, saying a constitutional amendment was “urgently needed” to address age discrimination.

As it stands, mothers born before 1962 will receive two years child credit for every child they give birth to and four years for a child with disability.

This contrasts with the child credit given to mothers born after 1962, who are entitled to four years child credit for every child they give birth to and eight years credit in case of a child with disability.

He also said the maximum pensionable income of these individuals today is €6,407 per year, less than those born later.

“Starting from next year, those pensioners born before 1962, and whose current salary, if they are still working, does not reach their maximum pensionable income, will receive an additional increase in their pension that varies according to their salary,” he said.

This measure is expected to benefit nearly 10,000 pensioners.