Reforms to the pensions law will allow civil servants to continue to work after the age of 61 without suffering any reduction to the gratuity paid out upon their retirement.
The reforms, moved by Social Solidarity Minister Michael Falzon, will furthermore allow the Principal Permanent Secretary to permit civil servants to continue to work after age sixty-five.
The bill will also add the post of Principal Permanent Secretary to the list of civil service offices whose pension is retained even if the office-holder returns to a lower grade.
The measure will not impact current Principal Permanent Secretary Mario Cutajar, as this provision already applies to him as Cabinet Secretary.
During Tuesday’s debate in parliament, Opposition MP Claudio Grech called upon the government to examine how a sustainable pensions system could be built for coming generations. Older persons were living longer while facing more severe health conditions, putting a further strain on their ability to make ends meet.
Old age should not be seen as the last phase of life, but as the best phase of life, Mr Grech added, saying that this was the period when the elderly could enjoy the fruits of their social contribution. However, difficult situations were being created for elderly people in an economy which was built upon restrained consumption.
Responding to Mr Grech and to others, Home Affairs Minister Michael Farrugia expressed his surprise at Opposition MPs who seemed “cut off from reality.” The poverty rate was a third of what it was in 2013, he said, but the government was still not happy and would continue to ensure that this rate continued to dwindle.
Although the national insurance rate and the pensionable age had both been raised during Nationalist administrations, pensions had not increased at all, a trend which had been reversed by the Labour government. The government had also ensured that pensioners who earned less than €13,000 a year from pensions were not taxed on this income, and launched schemes to ensure that pensioners were incentivized to work beyond pensionable age.
Dr Farrugia said that it was important to recognise that the situation of those reaching retirement age could and would be improved. It had been possible to make positive changes over the past six years due to the sound economic footing which Labour had created for the country.
Opposition MP Godfrey Farrugia said that present efforts to reform pensions needed to move at a quicker pace. He called upon the government to make room in Budget 2020 for pensions, in the same way that it found money for other things. The Government should launch an educational campaign to help those approaching pensionable age to cope with financial commitments and loans.
A category of pensioners, who were mainly women, had not amassed enough social security contributions to receive a decent pension. The government had a duty to look after these persons, Dr Farrugia insisted, and they should also be given what they deserved in the upcoming Budget.
Recently co-opted Opposition MP Kevin Cutajar expressed the Opposition’s approval of the amendments, which would “remedy an injustice.” However, he stated that one could not but worry about pensions in the present day.
Referring in particular to disability pensions, he asked MPs whether the €400 or so given to some of those who suffered from disabilities was adequate. Government efforts to increase the employment opportunities offered to the disabled were laudable, but there was a category of disabled persons who would never be able to reach the economic performance necessary to ensure a comfortable life for themselves. As a result, it was necessary to ensure that these persons were given the opportunity to live a decent life.
Dr Cutajar said that other categories, such as the elderly, were failing to benefit from the well-performing economy that the government often mentioned.
Winding up, Michael Falzon, minister responsible for social policy, said that this year would mark the fourth consecutive increase in pensions since Labour’s accession to government. He recognised that the present state of affairs was “not a utopia,” however, acknowledging the gender gap in pensions which was pointed out earlier by Opposition MP Claudette Buttigieg. However, he added that everybody had benefitted from pensions increases and increases to the cost of living adjustment.
The government would be looking at new classifications of disability which weren’t as strictly tied to mobility problems. He expressed his hope that Budget 2020 would ensure that disability allowance for certain conditions was on par with the net minimum wage.