Around 86,500 ‘vulnerable’ people will receive an additional cost of living adjustment payment from December 17, the government announced on Wednesday.

A total amount of €16.2 million will be disbursed to 45,000 households, with the average payment amounting to €643. The lowest amount a family can get is €100. 

First announced in 2021 but officially unveiled during this year's budget speech, the mechanism is intended to help low-income families cope with the rising cost of living. 

Finance Minister Clyde Caruana and Family Minister Michael Falzon, who jointly announced the cheque rollout during an event on Wednesday, said the mechanism has been structured to ensure future governments will be able to continue to sustain it.

The mechanism addresses all those who are receiving social benefits and who earn less than the average income, which stands at €17,796 this year.

Cheques will be issued once a year, with recipients varying from year-to-year, based on their income during that particular year. 

Amounts disbursed will also vary. The lower the income and the greater the number of people living in the same household, the more compensation is given to help.

Families whose income is less than 40 per cent of national median income will receive an average of €643 in the coming days. The least a family can receive is €100.

A ministry spokesperson refused to divulge what the maximum amount disbursed will be. 

A variable mechanism

“We now have a scientific and technical mechanism that will allow governments to objectively measure families’ basic needs, and which can be revised to cushion further spikes in inflation in the future,” Caruana explained.

“If the rate of inflation next year decreases, people will receive the same amount next year as they will receive this year. But if it increases, they will receive additional aid over and above this year’s amount.”

He said the mechanism had taken years of negotiation between the government, unions and employers to thrash out, as well as consultations with the Alliance Against Poverty, Caritas Malta, and the Pensioners’ Alliance.

Family Minister Michael Falzon said the initiative adds to several other financial aid packages, such as the children’s allowance and the in-work benefit.

“This government is generating wealth, incentivising people and cushioning energy prices,” he said, adding that all of this is possible because the country’s finances are in good hands.

“We’re not perfect, but we sure made a huge difference in the lives of many people. This is a social government that has the people in its heart and soul.”

Correction December 7, 2022: A previous version stated that the maximum cheque is of €643. That is the average amount disbursed.