The Malta Independent 4 December 2023, Monday
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Pension anomalies

Sunday, 17 September 2023, 12:15 Last update: about 4 months ago

Various letters have appeared in the print media recently concerning the unfair discrimination between those born before or after 1962 in determining one’s maximum state pension. I am aware that the Ghaqda Nazzjonali tal-Pensjonanti has been fighting for many years for justice to be done but successive governments have turned a deaf ear to persistent demands to place all pensioners on an equal footing. In response, Social Policy Minister Michael Falzon has committed government to produce a plan for making gradual changes to the pension system to ensure that those born before 1962 are no longer penalized.


However, the word gradual indicates that government does not intend to tackle this anomaly head on in one go but only in dribs and drabs as has been the case of the long-standing discriminatory treatment of those receiving a service pension. It is opportune to point out that ‘service pensioners’ include both those in receipt of a pension arising from former employment with the British services but also those who were sensible enough to sacrifice part of their (already taxed) income towards creating a private pension.

In this regard, one recalls the Pl-led government’s change of heart in 2022 when, just before the last general election, two legal notices were issued in quick succession, the second one nullifying the intended exemption from income tax over a five-year period of all pensions, I repeat all pensions i.e. including private pensions in accordance with government’s pre-election promise. The exemption from tax of all pensions irrespective of amount as contemplated in L.N. 98 of 2022 was quickly decimated by L.N. 220 of 2022 by the introduction of a maximum of €2,864 for 2022 (20% of the then maximum state pension of €14,318) rising by 20% annually to the stated maximum figure by 2026. Thus, automatically, private pensions were unfairly excluded.

With inflation slated to remain in the region of 5 per cent, and in light of the ever-increasing cost of living that affects pensioners more harshly than others, the least that the Minister for Finance should do is to commit government in the forthcoming 2024 Budget speech to increase the ceilings introduced by L.N. 220. Better still, will government have the guts to make another U-turn by reverting to the gradual income tax exemptions with no ceilings as was the intention originally per L.N. 98 of 2022?


Anthony R Curmi

St. Julian’s

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