Rapid delivery of bumper package of social measures | Mark Musù

Social measures aimed at bolstering Malta’s social fibre and addressing social exclusion have notably been at the heart of budgets rolled out annually by Government over the past nine years. Besides being designed to create a better quality of life for the young and old, families with children, pensioners, vulnerable persons and persons with disability, the raft of enacted measures successfully promoted social activation and participation to ward people off benefit dependency.

Budget 2022 was distinctly laden with a bumper package of social measures, which in terms of expenditure and span outstripped its predecessors. The biggest share of an unprecedented outlay of €1.8 billion allotted to the Ministry for Social Policy and Children’s Rights was apportioned to the funding of social security benefits.

Retirees, widows, invalid persons and old age pensioners whose number this year reached about 98,000, have been eminent beneficiaries. They drew weekly increases of €5 in their pension rates, and additionally a considerable number of them benefitted from weekly enhancements of up to €7.5 in their rates. The upgrades were triggered by adjustments in widows’ pensions and in the cost-of- living bonus through mechanisms which were set in motion this year. The processes have been designed to establish over a number of years equivalence in survivors’ pensions and a level playing field in the award of the cost-of living bonus among all pensioners.

Low-income pensioners as well as persons on social assistance benefitted from another keynote measure which raised the rates payable under the Supplementary Allowance scheme. Married couple rates increased by up to €338 yearly whilst those of single beneficiaries went up by €260. Furthermore, benefit claimants 80 years and older became automatically entitled to free medical care.

Other measures targeted at elderly persons included the enhancement of the Senior Citizens Grant and the Deficiency Contribution Bonus, with top rates going up to €400 and €500 respectively. On the other hand, persons, mostly married women, with a record of up to 10 years’ social contribution payments during their working life became eligible to the lowest scale of retirement pensions.

The Making Work Pay concept has been the hallmark of budgetary initiatives initiated since 2014 to incentivize people to enter the labour market and reduce benefit dependency. Backed by a robust economic growth and the ensuing creation of job opportunities, the initiatives have paid dividends with the number of beneficiaries reliant on social or unemployment assistance dropping to record levels.

As a key pillar in this policy, the in-work benefit scheme has been gradually upgraded to allow a wider spectrum of working parents boost their household incomes through a range of rates payable to children under 23 years. The scheme enhancement kept going this year with a further widening of income thresholds to enlist couples with incomes of up to €50,000 and single earner households with incomes of up to €35,000. Households within the extended brackets qualified to a payment of €200 per child. At the same time, families with incomes below €26,000 or €35,000 gained an increase of €100 in rates payable per child.

Through a further innovation in the scheme, employees working atypical hours and earning less than €20,000 are being awarded an annual grant of €150, equivalent to 10% of their income tax bill.

Other family measures set off increases in the childbirth and adoption bonus, the disabled child allowance and in the carers’ grant payable to parents who drop out of work to take care of severely disabled children.

Furthermore, for the first time, social assistance claimants were awarded the full cost of living increase instead of 67% as was the case up to now.

By year end the expenditure on enhanced pensions and social benefits is estimated to go up by hefty €90 million over 2021 with the number of beneficiaries, including families, reaching about 185,000.

Socially conscious of their duties, officers and staff in the Department of Social Security and the Income Support and Compliance Division were quick on the ball in the wake of the budget presentation to serve beneficiaries at the earliest.

Notably, salient measures earmarked for low-income beneficiaries were put to bed a month after their announcement, with pension increases following suit in January. By the first quarter of 2022 the departments managed to deliver over 80% of the package.

Full closure will be attained next month with the issue of payments to over 5,000 eligible applicants under the schemes open to former members of the labour corps who were engaged in the public service or sector and other categories.

Mark Musù is the Permanent Secretary for the Ministry for Social Policy and Children’s Rights, and the Ministry for Social and Affordable Accommodation