A total of €16.2 million will be distributed among 45,000 households of low-income families and persons, through the additional cost of living adjustment cheques starting on 17 December, government announced on Wednesday. This amounts to around 86,500 persons who will benefit.

The average amount families will receive is €643, with the lowest amount such families can receive being €100.

In this year's budget speech, it was announced that a new additional COLA mechanism was being introduced which is intended to help low-income families cope with the rising cost of living and inflation.

Finance Minister Clyde Caruana and Family Minister Michael Falzon announced the cheque rollout and said that the mechanism has been created to ensure that future governments would be able to sustain it.

All those who are receiving social benefits and who earn less than the average income will be benefiting from this mechanism, and cheques will be issued once a year with recipients varying from year to year, based on their income in that particular year.

The amounts distributed will also vary, and the lower the income, and greater the number of people living in the same household, would mean more compensation would be given.

Families whose income falls below 40% of the poverty threshold will receive an average of €643 in the coming days.

Caruana said that the mechanism is a scientific and technical one, which allows government to objectively measure the family's basic needs.

Caruana said that the aid is not intentioned to be given this year only, but the mechanism can be revised according to the circumstances and will be revised if there are anomalies in the rate of inflation. If the rate of inflation increases, beneficiaries will receive additional aid to this year's amount, Caruana said.

He said that with this help, the rate of poverty will decrease by 1%. He said that consultations and negotiations were made between government, unions and employers, as well as with the Alliance Against Poverty, Caritas Malta, and the Pensioners' Alliance.

Falzon said that the initiative is adding to the children's allowance and the in-work benefit, which will also be given this month.

He said that government is incentivising people and cushioning rising prices whilst generating wealth. Falzon said that the rate of unemployment under a PL administration has decreased by 90%.

"We widened the threshold so that more people may benefit from this, and we will be helping more people," Falzon said, adding that this will surely make a difference in people's lives.

Falzon said that this is a social government which has the people in its heart.