At a recent meeting of the MCESD, Carmelo Abela, the minister for the implementation of the electoral manifesto within the Office of the Prime Minister, said he was aiming to establish a basic living income.

This innovation would be aimed at ensuring that payment to citizens will cover the costs of their basic needs. Abela said the focus should be on ensuring a more decent income for everyone. It is understood that this includes pensioners.

This declaration confirms the fact that thousands of citizens do not have a decent income and about 83,000 persons are at risk of poverty and exclusion.

What is a living income?  

By one definition, it is the “net annual income required for a household in a particular place to afford a decent standard of living for all members of that household”.

Pensioners’ organisations would certainly welcome the introduction of the living income to enhance the financial resources of Malta’s citizens.

However, in the current situation, the top priority should be that of establishing a national minimum income to address the problem of poverty and exclusion.

According to Eurostat, in 2019 the number of Maltese households at risk of poverty and exclusion (AROPE) was 20 per cent.

The figure is of 50 per cent among households with a single adult and dependent children, while 41 per cent of all people living in single-parent households were in persistent AROPE.

Furthermore, 25 per cent of persons who are 65 years and over are at risk of poverty. The European average is 16 per cent.

Statistics point out that children and elderly people are the most vulnerable.

In the current precarious situation, where unemployment is on the increase and there is a decline in economic activity due to the pandemic, it is worrying that a new venture is being embarked on which may take years to develop and be implemented. 

Pensioners, single-parent households, unmarried mothers, children, the working poor and the thousands of other vulnerable citizens cannot wait any longer to have their poverty problem addressed. They need help today because tomorrow may be too late.

The thousands of vulnerable citizens cannot wait any longer to have their poverty problem addressed

The minister, as well as the MCESD, should take early action to establish a minimum income which is considered reasonable for today’s basic needs.

Abela also referred to the agreement on the national minimum wage which was made prior to the 2017 election. He explained that the concept of the basic living income started to be discussed following that agreement.

In fact, there was no increase in the basic minimum wage. Only workers in the second and third year of employment were affected, as they received a weekly increase of €3. 

In normal practice this is considered an ‘increment’ and not an increase in the basic wage as wrongly interpreted by the administration and all stakeholders who were present to celebrate the “historic” step to lift people out of poverty.

 It was actually a “historic” stabbing-in-the-back for low income earners, who include pensioners. They expect and deserve better treatment from MPs, political parties, employers, trade unions and all those who attended that ceremony.

 The statistics mentioned above indicate clearly that the measure adopted to address poverty did not work. Disastrously, it had no effect for thousands of vulnerable citizens. The poor became poorer and the rich continued to get richer.

Interviewed by Times of Malta on April 30, 2017, Joseph Farrugia, director general of the Malta Employers Association, was asked: “Has the minimum wage increased or not?”

He replied: “Let me make it clear.  The minimum wage has remained the same.”

In the current scenario, I suggest that we need to be careful about how we tread on this slippery ground.  The introduction of a basic living income will have an impact on social security in the short-term and will have benefits in the long- term, including on pensions.

The pension reform has already caused considerable harm to beneficiaries by separating pensioners into two categories according to their date of birth.

At this stage it is of paramount importance to consolidate what we have achieved so far.

When the issue of the minimum wage is resolved, we can move forward to establish a living income if it would upgrade the standard of living of beneficiaries and help them to enjoy a decent life after their retirement.

Carmel Mallia, former president, Alliance of Pensioners Organisations