Retirees to benefit from pre-COVID pension over the coming years

Those born between 1956 and 1961 will face no reduction in their net pension due to the pandemic 

Those approaching retirement will have their pension unaffected by COVID-19, with income generated in January and February to be considered as their annual basic salary. 

This will be carried out through an amendment to the Social Security Act. Those born between 1956 and 1961 will be benefitting from the measure. 

When assessing pensionable income, a yearly average is calculated of the person's basic wage during the best three consecutive calendar years between the previous 12,13 years.

For those whose best three consecutive calendar years also included 2020, only the first two payslips of the year will be taken into account and "annualised" for the entire year. 

The legal change will potentially affect 2,500 people and their families, so that the pandemic will not result in any reduction in their net pension.

"We are doing this to improve the negative effects of the COVID-19 pandemic," Family Minister Michael Falzon said. "Those affected are a number of people who have almost arrived at pension age but had their employment impacted negatively, in the last year, before reaching retirement."

Offering more technical background to the measure, Finance Minister Clyde Caruana explained that this will not result in any increased payments from government's side, and no changes will be carried out on the way pensions are changes.

"If you were entitled to, say, an €8,000 per year pension in 2019, but due to the pandemic you're now entitled to €7,000, you will still earn that initial €8,000," he clarified.