Pension ceilings and the EU

In the letter "The EU and pensioners" (March 5) Paul Farrugia posed a number of questions regarding the social security income and pension ceilings. They merit a reply.

As an apolitical organisation, the National Association of Pensioners abstained from taking a stand on the subject of EU membership. Nor did it deem it wise to suggest to members how to vote.

The editorial in the winter issue of Il-Pensjonant, to which Mr Farrugia made reference, sought to explain that currently, within the EU, pensions are the preserve of national governments. It also set out some possible future scenarios. However, its main thrust was the effect on pensioners of VAT on food and medicines as from January, 2010.

One thing bears repetition. Under the current dispensation, governments have full freedom of action with regard to matters relating to pensions and welfare, eg rates, ceilings, age of retirement etc. Obviously a government acts within a country's financial means. Membership of the euro might impose greater constraints as a member state's deficit cannot exceed three per cent of GDP.

Therefore, in reply to the questions about the present income ceiling of Lm6,750 and the related two-thirds pension ceiling, the correspondent may rest assured that EU membership per se should have no effect, whether positive or negative.

Unless current EU arrangements change, the Maltese government would continue to remain free to raise both ceilings.

The correspondent also referred to progress on the gradual raising of the Lm6,750 income ceiling to Lm8,000 mentioned in an NAP resolution of May 26, 2001. Alas, the short answer is nil.

One would have expected those without any cap on publicly funded pensions to be sympathetic to the plight of others in a less happy position. Unfortunately, thus far, they seem to be far less caring than we have a right to expect them to be.