The truth about pension rises

The budget is now over and the propaganda bombardment by the government, worth thousands of euros, has started.

The general impression is that it was quite a positive budget. Indeed, I would say that, all in all, the positives are noteworthy. As my colleague in Momentum, Mark Camilleri Gambin, has pointed out: “Incentives for larger families are quite tangible and, while such financial aid is most welcome, more consideration needs to be given to family well-being, which is often strained by the necessity for both parents to work and rush between commitments; the 24-hour opening of the Gżira and Qormi health centres was desperately needed; widespread AI training is something without which the country cannot move ahead.”

A number of fiscal measures aimed at increasing Malta’s waning population can certainly be considered family-friendly and positive. What I find less convincing is the reasoning behind these measures.

Perhaps unintentionally, the underlying message suggests that single women and single men without children are viewed as less important than those who have children.

But the scope of this article is to tackle another issue: the false impression given about pensions.

Let me begin by commending the government for adopting a proposal that

Momentum and I have been advocating for the past five years: ensuring that social security contributions made by 16- and 17-year-olds count toward their pension entitlement. Until now, for reasons that were never entirely clear, these contributions had to be paid for two years but were excluded from the final pension calculation.

Until now, 16-year-olds could contest elections, become mayors, officiate at marriages and sign bylaws – but the social contributions they made between ages 16 and 18 did not count toward their pension, effectively wasting those two years. This has finally been corrected, meaning that someone who began paying contributions at 16 could, if they wish, now retire as early as 56.

However, the big headline on pensions is: €10 rise for all pensioners.

This is a blatant twisting of the truth and it is also about time that journalists question such a statement, which is only meant to dupe people.

It is not true that pensioners got a €10 increase.

The truth is that all the working population, including pensioners, got €4.66 a week to compensate for last year’s cost-of-living rise. The marketed figure of €10 for pensioners includes the €4.66 given to the whole population.

So, the real extra rise for pensioners is €5.34 a week. Is it so difficult for honest politicians to just say things as they are, rather than try and dupe people with a round figure, like €10?

We then have the issue of the pre-1962 pensioners.

First scandal: mothers born after 1962 get four years social security payments from the state for every child, up to three children. Therefore, a maximum of 12 years payment.

But mothers born between 1952 and 1961 only get two years social security payments for every child, up to three children. Ergo a maximum of six years. Why? Are their children worth less?

It is not true that pensioners got a €10 increase- Arnold Cassola

And mothers born before 1952 get zero years contributions by the state. Why? Are their children the sons and daughters of lesser gods?

We then have all the pre-1962-born pensioners, male and female. In 2023, I had identified the great anomaly that these were going to get up to €82 less a week in their pensions than their post-1962 counterparts.

Social Policy Minister Michael Falzon started writing hysterical articles to state that Arnold Cassola was a liar. Two months later, he had to take back everything since he realised that Cassola was right.

So, in 2024, the 25,000 pre-1962 pensioners who had paid the highest contribution on their over-€23,000 salary got €9+ as compensation. The shortfall gap went down to €73.

In 2025, the 25,000 pre-1962 pensioners who had paid the highest contribution on their over-€23,000 salary got €11+ as compensation. The shortfall gap went down to €62.

In 2026, the 25,000 pre-1962 pensioners who had paid the highest contribution on their over-€23,000 salary will get €19+ as compensation. The shortfall gap will go down to €42.

The above compensations are slowly redressing the injustice for the 25,000, who might be at par with the post-1962-born pensioners in four years’ time.

But what about the other 50,000/60,000 pre-1962 pensioners who paid lesser contributions because they had lower salaries? Some of them worked even for 45 years of their lives.

Yet, these 50,000/60,000 have not seen a penny to redress their situation.

Why were they not given a pro-rata of €9+ in 2024, of the €11+ in 2025, of the €19+ in 2026?

How are they going to pay for the continuously rising costs of fruit, vegetables, medicines in 2025-2026 with the zero euros that you gave them, Clyde Caruana?

Are you more concerned with duping people with the fictitious €10 you gave pensioners?

It seems that to guarantee your partisan exigency of keeping Labour in power, you are prepared to sacrifice the well-being of thousands who worked all their lives for their country.

As Konrad would have screamed at you: “Shame on you, Clyde.”

Arnold Cassola is chairperson of Momentum.