Finance Minister Clyde Caruana announced a €10 weekly increase for pensioners from January 2027 and a new system allowing social security contributions to be transferred between spouses, a measure expected to help around 3,200 more married women qualify for a pension.

The proposals form part of a social measures package worth more than €121 million outlined in the Budget 2027 speech. Caruana also announced that the retirement age and social security contribution rates will remain unchanged, while the national minimum wage will increase by €10.41 a week, including the cost-of-living adjustment (COLA).

Under the new pension measure, from 2027 a spouse receiving a pension will be allowed, subject to parameters to be announced, to transfer social security contributions to a spouse who does not qualify for a pension. The measure is intended particularly to help married women who had stopped working after marriage, when this was legally required.

He said that nearly 4,000 married women had started receiving a pension for the first time since 2021 through previous measures. The new change is expected to benefit a further 3,200 women, bringing the total number reached by these measures to around 7,000.

From January, retirement, invalidity and widow's pensions, as well as the age pension paid to older people, will increase by €10 a week. The increase is described in the Budget speech as the first instalment of the €50 weekly rise promised during the election campaign.

According to Caruana, since 2013 pensioners' weekly payments have increased by at least €92.40, with some receiving larger increases through other measures. The government also intends to eliminate the remaining pension anomaly by 2028.

Several further changes to pensions were announced. The maximum pensionable income for pensioners born before 1962 will rise to €28,000, benefiting around 15,000 pensioners, including widows.

More than 7,000 widows are expected to receive a further pension increase as the government completes a process begun in 2022. The adjustment is intended to ensure widows receive the full two-thirds pension their late spouses would have received had they remained alive.

The cost-of-living bonus paid alongside pensions will also be standardised. From 2027, all pensioners, regardless of the year in which they retired, will receive the same fixed rate of €21.53 a week.

The annual income threshold below which pension income is not taxed will increase by €520 to €37,624. Service pensioners will also benefit from changes to the amount of their service pension disregarded when calculating their social security pension. The annual disregarded amount will increase from €200 to €300, while service pensioners aged 72 or over will have the entire commuted amount disregarded.

Former members of the disciplined corps who receive a service pension but no social security pension, and who are not employed, will become entitled to the same increase paid to social security pensioners. Their annual bonus will rise by €520 next year.

People with disabilities receiving a contributory pension who previously received a disability benefit or an occupational injury pension will see the proportion of their former benefit paid alongside their pension rise from 10% to 20%. People who still do not qualify for a pension because they lack sufficient contributions will receive a bonus increased by €333.32 a year, with rates ranging from €933 to €1,383.

The additional COLA mechanism will be reintroduced for low- and middle-income households. Payments will range from €200 to €1,500 a year, depending on disposable income and household size, and are expected to reach more than 100,000 households, particularly pensioners, single people, couples and families with children.

Around 14,000 families will be eligible for a €500 payment for each child in post-secondary education during the first half of 2027.

The Carers Grant, paid to parents unable to work because of their child's severe disability, will rise to €7,500 a year as a first step towards making it equivalent to the net minimum wage. Parents working no more than 20 hours a week in part-time employment will remain eligible for the grant at half the current net minimum wage rate.

The Carer at Home benefit for older people employing a full-time carer will increase by €800 to €9,800 a year. The adoption expenses reimbursement for families adopting children from abroad will increase by €1,000 to €13,000 next year, as part of a commitment to raise the grant to €15,000 during the legislature.

Employed people who begin fostering will receive 10 additional working days of leave, paid for by the government, to help them bond with children placed in their care.

A support framework will be developed for young people leaving alternative care, guaranteeing access to education and training and housing assistance from the age of 17 until 21. The assistance, including educational support, will be at least equivalent to the social assistance rate for a single person and will be additional to other education-related payments, including stipends.

The Supplementary Orphans' Allowance will be extended from age 21 to 25 for those still in tertiary education, or until six months after graduation and starting work, whichever comes first. The rate will be €170 a week. The government will also cover all costs related to necessary therapies for children with disabilities under 18.

Social security contribution credits will be extended to employees temporarily out of work because of mental health problems or domestic violence, who may receive up to two years of credits. Credits will also be available to young people with behavioural problems who undergo rehabilitation, including under court orders, while receiving help to train, find work or start a business.

Higher minimum wage rates will also be reflected in benefits for around 15,000 disabled people, carers and social assistance recipients. Severe disability assistance will rise by €9.37 a week, while other listed disability and carers' benefits, and social assistance, will increase by €6.41 a week.

Finally, the government will end four compensation schemes addressing past employment anomalies affecting former workers or their heirs linked to Malta Drydocks and Malta Shipbuilding, the Gas Board, and former Telemalta and Rediffusion employees. The schemes have involved payments over 11 years to around 9,000 people or their heirs, totalling €105 million.