Budget 2026 hands out baby bonus: €1,500 for second child, €2,000 for third

Have a second baby and get a €1,500 grant and have a third and get €2,000, Clyde Caruana announced in Monday's budget speech.

The one-off bonus for the birth or adoption of a child will now rise to €1,000 for the first child, €1,500 for the second, and a significant €2,000 for the third child and every subsequent child.

The grants increased by €500 for each child since last year's budget, which had seen the bonus for a third child rise to €1,500.

The government hopes the continued increase in financial incentives will encourage couples to have larger families, as Malta continues to grapple with the lowest fertility rate in the European Union.

Malta's fertility rate of 1.08 births per woman is well under the 2.1 rate required to replace the population.

Weeks ahead of this year's budget, Caruana did not mince his words about the problem. This is "the greatest challenge of our time", he told social partners in a pre-budget event last month.

Caruana said figures show 60% of families who have a child never go on to have a second.

"We need to encourage more families to have at least two children," he said in that event, echoing Archbishop Charles Scicluna’s warning earlier that week that Malta faces “ethnic extinction” due to its low fertility rate.

He said every year there are 3,000 fewer Maltese people around and accused politicians of wasting their energy on petty issues while ignoring the elephant in the room.

The current trajectory is not sustainable without a greater native population, he said.

Hence, the budget's new bonus rates, which are one of several measures the government has taken in recent years to try and mitigate the ongoing demographic decline.