The Malta Independent's editorial of the 15th of August sadly gave a completely incorrect interpretation of social spending data. The editor argued that the rise in non-contributory benefits, of 12.9% between the first six months of 2024 and the same period of 2025, was a "reflection of growing dependency, economic strain and policy gaps". This false assertion, however, is not backed by the facts quoted in the same editorial.
The editorial notes, that nearly €10 million of the €21.6 million increase in non-contributory benefits was due to children's allowance. Increased spending on Children's Allowance is not a sign of social dependence, because this is a universal benefit paid to all parents of children under 16. Spending has increased as a result of the rise in Children's Allowance rates introduced in Budget 2025. This was the second year in a row, that these rates rose greatly, and in fact official data clearly show, that the Children's Allowance Supplement has risen from €2.3 million in the first six months of 2023, to €10.5 million in the same period of this year. At a time when there is concern about Malta's low fertility rate, it is indeed hard to reconcile the editorial's worry about rising generosity of Children's Allowance. Some would argue that the State needs to find even more generous ways to help families.
This leads to the second so-called 'worrying' trend focused on by the said editorial. In fact, the editorial was "apparently" worried about the rise in the number of claimants under the Special Allowance for Post-Secondary Students. Again, this suggests a misunderstanding of this benefit. This benefit like Children's Allowance - is a universal benefit paid to all parents with children between 16 and 20 years of age, who continue with post-secondary education. This means that, if the number of those who continue studying increases, the number of parents getting support inevitably grows. Since having a higher proportion of persons with tertiary education is a key policy goal for Malta, and a widely adopted sign of social progress, rather than worrying about the increase this year, it is hard to understand why the Malta Independent's editorial is so concerned about this positive development.
The editorial also expressed concern, about the number of persons qualifying for the Additional Cost of Living Adjustment. Once again this surely is due to a misunderstanding of the benefit. As explained on the Department of Social Security's website, this benefit is given to all households having an income adjusted for the number of people in the family, that is below the equalized national median as defined by Eurostat. This means that around half of the population of Malta automatically qualifies for it. Therefore, unless Malta's population starts declining, one cannot expect the number of beneficiaries to fall.
Yet again, the editorial repeatedly argues that there is increased dependence on social benefits, something that is not backed by any official data. Take for instance, the number of those dependent on Supplementary Allowance for low-income earners. In the first half of 2024 there were 20,946, while now there are 20,068. The number of those on Social Assistance during the same time fell from 3,657 to 3,228, while the number of single parents on Social Assistance declined from 2,115 to 1,899. Taking a longer time trend, the number of those on Social Assistance and Unemployment Assistance; at its peak in 2013, was triple what it is today.
Thanks to policies such as free childcare, tapering of benefits and the In-work Benefit - reforms which international organisations such as the European Commission, the ILO and the ISSA have lauded repeatedly - we have managed to lower social assistance dependency, both in relative and even in absolute terms. Today just 4% of the population are in severe social and material deprivation, with some 5,000 persons exiting this situation in the last three years alone. Malta's rate is in fact a third less than that observed in the rest of the European Union.
In a situation where median income in Malta is rising so rapidly, Government has to keep raising the generosity of social benefits, so that people on benefits can retain relativity with those in employment. Otherwise, even with lower numbers of people on benefits, there would be a risk of growing income inequality. That is why even where we have had a drop in those dependent on Social Assistance or on the Supplementary Allowance, one notes a rise in spending. The generosity of benefits must maintain the pace with median income, if we are to truly sustain those in most need.
At the same time, a prosperous Maltese economy allows Government to introduce new non-contributory not means-tested benefits, such as the Special Allowance for Post-secondary Students, the Carer's Grant and the Additional Cost of Living Adjustment to mention some. While this Ministry will always seek to help individuals sustain themselves through their own means; and we have more than succeeded in doing that in this last decade or so; we also believe it is our mission to ensure that the share of the economy devoted to social spending remains stable.
Michael Falzon is Minister for Social Policy and Children's Rights