Issue link: https://maltatoday.uberflip.com/i/1510683
7 maltatoday | TUESDAY • 31 OCTOBER 2023 BUDGET2024 KARL AZZOPARDI GOVERNMENT will be raising pensions for the ninth year in a row, Finance Minister Clyde Caruana announced. Every retired person, pensioner, and those on disability benefits, as well as those who receive a re- tirement pension, will see their income increase by €15 per week or €780 per year. "This is the largest increase that pensioners have ever received in a single year," Caruana said. He said government will im- prove the tax exemptions that apply to pensioners from the age of 61 and older. This will include the exempted amounts for all the announced increases for pensioners. Furthermore, starting from next year, the Widow's Pension will not be taxable for widows who have not yet reached the age of 61. "In this way, we will be ensur- ing justice for these individuals as well," he said. With the continuation of the process that will now enter its third year, those who started re- ceiving their pension in 2009 or later will receive an additional increase in their cost-of-living bonus, up to a maximum of just over €1.00 per week. In total, this improvement will benefit ap- proximately 53,000 pensioners. "It should be noted that if we do not act to carry out this process, the cost-of-living bonus for these individuals is currently less than €9 per week," he said. Widows' pensions Widows' pensions will be ad- justed upward once again in line with an electoral pledge to bring these pensions equivalent to that of their deceased spouses by the end of the legislature. Around 7,000 widows will ben- efit from the increase. Service pension 6,000 people in receipt of a ser- vice pension will receive an in- crease of €200. "Pensioners from the armed forces who have been boarded out and retired with an early ser- vice pension due to illness will begin to see the adjustment in their pension after 12 years from when they started receiving the service pension, and not when they reach the age of 72," Carua- na announced. A new measure for service pensioners who have not yet reached the retirement age and do not work, or do not receive any social security pension will be introduced. To date, they have received no cost-of-living allow- ance, while those who work or receive social security pensions receive the COLA. From next year, these individ- uals will start receiving an addi- tional Cost of Living bonus equiv- alent to the increase in the cost of living. This bonus will continue to accumulate each year with the increase in the cost of living until the person either starts working, begins receiving any pension or social security benefit. FINANCE Minister Clyde Caruana an- nounced 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 saw 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 guar- anteed 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 ap- plied to pensioners who were born be- fore. The capping was part of a reform into the country's pension system enacted by the Nationalist-led administration in 2006. Independent candidate Arnold Cas- sola 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 pension- able income of these individuals today is €6,407 per year, less than those born later. "Starting from next year, those pen- sioners born before 1962, and whose current salary, if they are still working, does not reach their maximum pen- sionable income, will receive an addi- tional increase in their pension that varies according to their salary," he said. This measure is expected to benefit nearly 10,000 pensioners. Pensions to increase by €780 per year Pre-1962 pension anomaly to be addressed starting next year PENSIONS "This is the largest increase that pensioners have ever received in a single year."