All eyes will be on the Finance Minister on Monday, as he will be presenting the budget for 2023. We already know, in the words of Clyde Caruana, that we will have no new taxes, but no existing taxes will be reduced or removed. We also know that the Cost of Living Adjustment will be the highest ever, at around €10 per week.

But there is so much more to the budget than taxes and wage increases. It is an exercise which explains the government’s plan for the coming year, and could also signify a shift in policy.

One such change that is being advocated, both by employers and unions, regards pensions. As things stand now, people who have completed their National Insurance contributions but have as yet to reach the age of retirement, cannot draw a pension if they choose to remain in employment. Only those who opt not to work can receive their pension in full.

What is being proposed now is that this system is changed, and that these people would still be able to work while receiving part of the pension.

In an interview with The Malta Independent on Sunday, David Spiteri Gingell, a former chairperson and member of the Pensions Strategy Reform, explained what the Chamber of Commerce and the General Workers Union have proposed in a joint position on the matter.

In the proposal, the degree of partial pension should become closer to 100% as one moves closer to the statutory retirement of 65 years. What has been proposed is that retiring at 61 years of age, the pension income entitled is pro-rated at 50%; Retiring at 62 years of age, the pension income entitled is pro-rated at 60%; Retiring at 63 years of age, the pension income entitled is pro-rated at 70%; Retiring at 64 years of age, the pension income entitled is pro-rated at 85%.

Such a system would allow people to remain in the employment world while still being entitled to at least part of their pension. In this way, their experience will not be lost and, at the same time, they would be supplying their income from the part-pension through employment, also on a part-time basis.

Allowing people to remain working in spite of having paid up all their NI contributions would also be sustaining the active ageing policy. Successive governments have encouraged elderly people to remain active, but as things stand now people who opt for an early retirement pension are not allowed to work. This goes against the active ageing policy.

Spiteri Gingell described this as being a “win-win for everybody”. Enterprises would be tapping into a highly-skilled and well-experienced workforce, retirees would be able to remain active and maintain economic stability, and the government would be meeting its active ageing commitments and ensuring that people who opt for early retirement can work legitimately.

It is hoped that the government will consider the proposal being made. If it is too late for the measure to be introduced in this budget, the government should at least indicate that it will work on it in the next months and that it has accepted the idea that people who completed their NI contribution years should be allowed to continue working while drawing at least part of the pension they are entitled to.