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11 maltatoday | TUESDAY • 29 OCTOBER 2024 BUDGET2025 MATTHEW VELLA mvella@mediatoday.com.mt Pensions: further increase of €416 per year Up to €100 monthly for public sector workers' occupational pensions PENSIONERS will receive a fur- ther increase of €8 per week or €416 per year, which includes the cost-of-living increase. Over 100,000 retirement, inva- lidity and widowed pensioners as well as others entitled to an old- age pension will benefit from this increase. Together with the annual in- creases received by pensioners over 10 years, these increments have reached a total sum of at least €3,583, almost €70 per week. "This means that what pension- ers would have received in a full year's pension 10 years ago, today they are receiving it in the first eight payments, with five more payments to go," finance minister Clyde Caruana said. In a bid to close a loophole in Maximum Pensionable Income between pre-1962 and post-1962 generations created as a result of the 2006 reforms, those born before 1962 and whose salary would otherwise still exceed the Maximum Pensionable Income of €23,500, will have a further ad- justment in their pension. Some 26,000 pensioners are expected to benefit from this measure. Tax exemptions for pensioners Pensioner widows will benefit from an additional increase in their pension through the pro- cess allowing them to receive the full pension their spouse would have received if they had survived by 2027. This adjustment affects around 7,500 widows and widowers. The additional increase will average around €3 per week, in addition to the overall increase of €8 per week. "In 2022 we started a process to remove the anomaly created in 2008 that led to pensioners re- ceiving cost-of-living-allowances that varied depending on the year they retired. "Now all pensioners will receive the same rate of that bonus each year," Caruana said. The adjustment of bonus rates will continue over the next two years, until the end of the process in 2027 where every pensioner will be entitled to the highest rate of €21.53 per week, which will then continue to be paid together with the pension and any other increases granted to pensioners in the future. Service pensioners will again see the amount of their service pen- sion not taken into account for the purpose of the social security pension, increased by a further €200 to reach the sum of €3,666. Around 3,250 service pension- ers will benefit from this move, thanks to a measure where at the age of 72, the entire amount cal- culated from the service pension is no longer taken into account. Bonus improvements for those who do not qualify for a pension Persons who did not have enough NI contributions to qual- ify for a pension will receive a bo- nus according to the number of contributions paid. The bonus introduced in 2015 is €500 for those who paid up to four years of contributions, and €600 for those who paid five to nine years in contribu- tions. Bonus rates will now be cal- culated according to the actual number of contributions paid. These will range from €550 for those who paid up to one year's contributions to €1,000 for those who paid up to nine years' con- tributions. This measure will benefit over 16,000 people, mostly married women. THE g o v - e r n - ment will be contributing up to a maximum of €100 a month for pub- lic sector workers investing in an optional occupation pension plan. Finance minister Clyde Caruana said it will contribute directly as an employer, by paying as much as the individual contributes up to a maxi- mum of €100 per month. "This plan will benefit from the same tax incentives that exist today, both for the employer and the em- ployee," Caruana said. Those who are already in a private plan, can also join an occupation- al plan and benefit from the same schedule of tax benefits – which amount to a maximum of €750 an- nually in tax rebates. Details of the occupational plan for public sector workers will be ham- mered out with social partners, to roll out the occupational pension plan by mid-2025. "This government does not on- ly take care of families' incomes in the present, but also caters for the future. That is why we must foster a culture of savings, ensuring a more adequate pensionable income for the pensioners of tomorrow," Caru- ana said. Government had already launched tax incentives to encourage people to invest in a private pension plan. "Now is the time to strongly encour- age occupational pension plans in our country. This is in the interest of workers and to have more and more sustainable and adequate pensions. "The ultimate intention is that every employee entering the world of work or changing jobs will have the opportunity to invest in an oc- cupational pension plan. While employers will not be obliged to contribute, they must offer their employees the opportunity to join a plan. It is up to the employee to refuse to do so." MATTHEW VELLA mvella@mediatoday.com.mt

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