The editorial ‘Not-so-golden later years’ on December 17 paints too dire a picture of the living conditions of persons aged 65 and over in Malta. The relative poverty statistics quoted in the editorial do not tell the full and proper story.
Let me admit right away that the relative poverty statistics relating to old-age people are rather disappointing. The word ‘relative’ needs to be emphasised, because this does not mean that the persons concerned are living in absolute poverty. Far from it. In fact, I would say that the claim that the way the elderly are treated is “an emblem of shame” is preposterous.
One of the principal reasons why the elderly have fallen behind in relative terms is that the average household disposable income and relative poverty thresholds increased by at least 20 per cent in the last six years, paradoxically making the situation of those earning less than the average look worse than it actually is.
It is pertinent to point out that a whole host of social researchers have criticised the methodology of the European Commission regarding the use of the concept of relative poverty. This is because the comparison of different groups of people based on the median household income gives a distorted picture of the real, absolute welfare of the different groups.
In fact, if one looks at the number of older persons living in severe material deprivation, one finds that it has decreased. Conversely, the number of older persons not at risk of poverty or social exclusion and not living in severe material deprivation has increased substantially.
The measures that have contributed to this improvement are many. In general, there has been a substantial increase in pensions, the one to be paid in 2021 (€260) being the second highest increase ever. Over eight years, pensions will have increased by €568.36. Adding the cost of living adjustment of €878.28 to them, the total increase will have amounted to €1,446.64, or €27.82 per week.
It is also worth mentioning that, over the last four years, elderly persons receiving low or average pensions have been awarded arrears totalling €36 million meant to reflect improvements in collective agreement salaries which had not been previously reflected in pensions. This malpractice of pre-2013 administrations had created a large gap between the pensions paid to certain pensioners and that paid to others.
Over eight years, pensions will have increased by €568.36
Around 70,000 retirement pensioners and 14,000 widows/widowers have benefited from this adjustment. Obviously, the one-off arrears payments are not reflected in the At-Risk-of-Poverty (ARP) rates retrospectively, though the subsequent pension increases will contribute to lower ARP in future years.
In addition, several service pensioners who are 72 or older have begun benefiting from higher rates of social security contributory pension as a result of changes in the assessment mechanism of the commuted part of their service pension.
Other measures include non-taxable pensions, an annual bonus (now increased to €350) to women who did not pay enough social security contributions, and, from 2021, consideration of contributions paid (especially by women) before 19 years of age so that they may become entitled to a minimum pension reflecting their actual contributions.
Many of the elderly who have fallen behind in fact are women who had either not worked at all or whose working life had been cut short by family responsibilities or even by their having to terminate their employment once they got married. This meant that the overwhelming majority of them did not have sufficient social security contributions to earn a decent pension. This is the result of decisions or policies adopted decades ago, not now.
The measures taken by the government have sought to alleviate the plight of such pensioners in the short- term. Over the longer-term, this problem will be reduced sharply as this government has made it easier for, and indeed incentivised, many women to continue working or to join the labour force. This is the dignity that the government has given to women, a far cry from the shame which the article attributes to the government.
Moreover, the evolution of ARP rates over a period of time taking inflation into account also needs to be considered. Thus, whereas the ARP in 2013 (2012 income) was 14.4 per cent, the percentage had been cut down to 7.3 per cent by 2019, taking inflation since 2008 into account.
The point about the misleading picture if one just relies on relative measurements is also illustrated by how the elderly judge their life satisfaction. According to Eurostat, those who were satisfied with both their financial situation and their overall life was higher in 2018 than it was in 2013, ranging between 6.8 and 7.4 (on a scale of 0-10), depending on whether the elderly are aged 54-75 or 75+. Another deficiency of the ARP statistics is that they do not capture benefits in kind granted under the social welfare net.
In conclusion, while we recognise that more needs to be done where it concerns the elderly, the situation is much better than that claimed in the editorial. However, the government remains committed to rolling out further measures to help the elderly.
Claudia Cuschieri, media and PR Consultant, Ministry for Solidarity