Issue link: https://maltatoday.uberflip.com/i/1176480
BUDGET 2020 maltatoday | TUESDAY • 15 OCTOBER 2019 10 JAMES DEBONO THE Budget 2020 introduces a completely new social benefit consisting of a one-time universal €300 bonus for families who ei- ther adopt or give birth to a new child, which is presented as an ad- dition to more substantial family- friendly measures in-troduced by Labour in the past, like children's' allowance, maternity leave and free childcare. Around 4,000 families are ex- pected to benefit from the bonus, which will come handy for par- ents faced with extra expenses like cribs and nappies. The new benefit will not be means-tested and everyone will benefit from it. The benefit ex- pected to cost € 1.2 million will come at a relatively small cost to the country while making a con- siderable difference at a strategic juncture in family life. During the speech the Finance Minister also announced that no under 16-year-old presently living in a family where at least one of the parents work is at risk of pov- erty. 92,000 pensioners will also see their pension increase by a meagre €3.15 a week. This increase will cost the cost the country's coffers €16 million. Coupled to the cost of living increase this will translate in an increase of €7 a week or € 364 a year. The budget itself confirms that 16,000 pensioners are presently at risk of poverty. This category which is eligible for a supple- mentary allowance of €100 in- crease to €150 a year. A more targeted measure is the increase in the allowance for un- der 18-year-old children of wid- owed pensioners, who will now get €10 a week irrespective of whether their parent works or not. Presently they get €4.54 if their parent is working and €9.32 if the parent is unemployed. In this way widows will not be penalised for work- ing. Over 75-year-olds will see the annual age ben- efit of €300 increase to €350 upon reaching their 80th birthday. The benefit presently restricted to old people living in their own home or that of relatives will be extended to pensioners who are present-ly living in a private re- tirement home. In line with the government's political commitments the budget foresees no in-crease in the pen- sion age or any mandatory second pillar but retains the same in-centives for voluntary private pension plans intro- duced five years ago. The government will also tap into the grey pound by issuing bonds targeting 6,500 pensioners in the over-62 category. All 19,000 pensioners who are over 75 years old will benefit from free public transport. One of the most socially signifi- cant measures is the increase in the disability from €150 to €161 a week. In this way disabled per- sons will be receiving the full equiva-lent of the minimum wage as promised in the PL's electoral manifesto. The VAT ex-emption on the purchase of equipment for the disabled will increase to €1,000. 651 disabled people will benefit from this life-changing measure, which has been im-ple- mented over a 3-year period. Other social measures are tar- geted for parents who take care of children with rare diseases which will be awarded eight years of Na- tional insurance payments. People suffering from fibromyalgia and ME will also become eligible for sickness benefits if their condition prevents them from working. But to avoid abuse the condition of these persons will be assessed by a specific "multi disciplinary" board. From cradle to old age: €300 upon birth, and weekly €7 for pensioners COLA increases to €3.49 From next year, the Cost of Living Allowance (COLA) will rise to €3.49 a week. This raise will be given to all employees, as well as pensioners and those on social benefits. Students' stipends will increase pro-rata. Moreover, in 2020, the government will be giving an additional one-off bonus of €15 for single persons and €35 for families of more than one person. The bonus is meant to make up for the increase in the price of milk and bread and will be covered by the government with not burden being placed on the private sector. Workers will be given an extra day of leave as part of the government's electoral promise to give back to employees public holidays which fall on a weekend. Income tax refund A tax refund ranging from €40 to €68 will be paid out to anyone who has worked. The measure will cost the government €11.5 million and will benefit over €200,000 workers. Lower tax on overtime The first 100 hours of overtime in 2020 for workers whose basic salary does not exceed €20,000 a year and who don't occupy any managerial posts will be taxed at 15%, at a €5.3 million cost to the government. Equal pay for equal work in private sector The government wants to introduce the concept of equal pay for equal work in the private sector and to fight cheap labour. Next year it will start discussing how to ensure that contract workers on shop floors receive the same basic pay as other workers in the same work within their particular entity. No VAT on educational and vocational services Educational and vocational service will be exempt from VAT Pensions increase Pensioners receiving retirement, widowers' and invalidity pensions will benefit from an increase of €3.51 a week exclusive COLA. Inclusive of COLA, pensions will increase by €7 a week, or €364 a year. The cap for pension tax exemptions will be raised to €13,798. Those retiring from disciplinary corps after 25 years of service will have their retirement pension recalculated upon reaching retirement age. The old age benefit of €300, for those over 75 who are paying for a private retirement home from their own pocket, will remain in place and will increase to €350 for those over 80. Around 900 elderly persons will benefit from this. The supplementary allowance for those over 65 who are at risk of poverty will increase from €50 to €150 annually. This measure will affect 16,000 elderly persons. Everyone 75 and over will be able to use public transport for free. Invalidity pensions up The invalidity pensions will increase from €150 a week to €161.40, bringing it up to the minimum wage level. The grant for the buying of special equipment for disable persons will increase to a maximum of €1,000. Patients who take care of children with rare diseases will be awarded eight years of National Insurance payments. €300 one-time bonus for newborns or adoptions From January, anyone having a new baby or adopting a child will be given a one-off €300 bonus. Around 4,000 families a year will benefit from this. More free medicine More medicines for oncology, heart disease, skin and rare diseases will be added to the free formulary. Those suffering from fibromyalgia will be considered for sickness benefit, including having the first three days of sick leave covered by the government.