The government is to reform unemployment benefits in a way which gives more dignity to the unemployed without discouraging them from looking for a job, Finance Minister Clyde Caruana announced in the Budget speech on Monday.

He said the benefit will henceforth be linked to the salary which the unemployed would have previously had.

The unemployment benefit for the first six weeks of unemployment will be 60% of the salary or income which the individual would have had in his last occupation.

In the 10 following weeks the unemployment benefit would be 55% and then go down to 50% for the next 10 weeks.

The lowest unemployment benefit will be worked on the basis of the national minimum wage while the maximum will be 175% of the national minimum wage. This, Caruana said, would bring Malta in line with international standards. 

The minister also announced improvements to the In-Work Benefit for eligible working parents with an increase of €50 per child.