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MALTATODAY 23 October 2018 Budget

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BUDGET 2019 maltatoday | TUESDAY • 23 OCTOBER 2018 2 The government says it has set itself a target as part of its strategy on poverty to have no child living in poverty or materially deprived households where at least one person is active in the labour market. The number of measures in past years in this respect plan to remove all children from poverty by increasing children's allowance for those households earning less than €20,000 annually. Children of parents on minimum wage will get a maximum increase of €96 per month per child, making this the first increase in children's allowance for 11 years for those with more than one child, and the first increase in 23 years for those with one child. 24,600 children are set to benefit, across 16,500 families. COLA COLA is €2.33 for all, including pensioners and anyone on benefits, while students will still be paid their COLA pro-rata on their stipends. €2.33 EXTRA DAY LEAVE Workers get to enjoy a second day of leave as part of Labour's manifesto pledge to remove the 2005 law that removes public holidays when they fall on weekends - this makes it the second one of five public holidays removed from the calendar. MINIMUM WAGE Not a specific Budget measure per se but 2019 will be the second year when minimum wage earners will get another €3 increase in weekly wages for those who have already spent a year on minimum wage, over and above their COLA increase. TAX REFUND ACROSS THE BOARD Another Labour manifesto pledge, this will be the second 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 will benefit some 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 €40-€68 each NO CHILD LIVING IN POVERTY DISABILITY ALLOWANCE FOR SERVICEMEN As of next year, there will be automatic compensation to workers in security, police and AFM who suffer permanent disability at work that doesn't allow them to work. The State will effectively ensure servicemen are cared for their entire life if they have been injured and suffer a reduced income due to their inability to carry out specific or extra duties. VAT REFUND FOR MOTORISTS Final payment of the seven-year tranch for refunded VAT on cars acquired with incorrectly computed VAT charge. UNEMPLOYMENT BENEFIT FOR THE SELF-EMPLOYED From 2019, the self-employed who go out of work will be eligible to register for unemployment benefit. 26 ROLL-OVER OF SECOND-TIME BUYER SCHEME Extension of the 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. 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. There will be an increase of €5.19 per week to couples that are granted a medical assistance benefit – a benefit given to people who have a chronic condition. So far it was discriminatory because men usually get the full rate while women get a reduced rate because the male spouse is already benefiting from it. No both people in a couple receive the same amout. The measure is expected to benefit mainly female spouses. Pensions until €13,000 will remain tax-free. Pensioners will see an increase of €4.50 weekly, affecting 92,000 pensioners and costed at €21 million. Service pensions, affecting some 2,200 people, will be paid an increase of €11 a week over and above the €4.50 pension increase. These people had been getting "raw deal" for many years due to a lack of increase in pensions. 29,000 people over 75 will keep getting €300 a year bonus if they keep living in the community. Another government saving bond will be issued that will give above market coupon as interests to the elderly. 14,000 applied last year. PENSIONS AND MEDICAL ASSISTANCE BENEFIT €3 plus €2.33 This is historically Malta's second consecutive Budget which includes no increase in personal income tax, the third Budget to record a consecutive surplus, in 2019 at 1.3%, the fourth Budget to increase pensions, and the seventh Budget that lowers income tax. Also there will be no new duties, excise taxes, or the customary annual increase on cigarette prices. NO NEW TAXES OR INCREASES IN DUTIES AND EXCISE Increase in bonus to people, mostly women, who would have paid national insurance, but don't have enough for a pension. Initial bonus of €150 now increased to €200. On the basis of an Ombudsman recommendation, government will be extending the right for workers who agree with employers to push back retirement age, in the public sector. A third tranche of injustices repayments – dockers and electricity board workers included – has been costed at €11 million. Rules to be issued by the end of 2018 after a working group had already started 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. EQUITY RELEASE FOR PENSIONERS ADJUSTMENTS ON GOVERNMENT BONUSES AND GRIEVANCES ARREARS

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