Senior citizens will see their basic pensions increase for a seventh year in a row and will receive an extra €260 a year or €5 a week.

Of that €1.75 is the increase for the cost of living and €3.25 is the additional increase.

The total cost of the increase is around €24 million and will affect 95,000 people.

The government will also increase the supplementary allowance for married pensioners who do not earn more than €14,318. They will receive between €3.47 and €6.50 a week, depending on their income.

Single pensioners, including widows and widowers, whose income does not surpass €10,221 will receive between €4.10 and €5 per week. Some 29,000 people will benefit from this increase which will cost a total of €5.6 million a year.

Finance Minister Clyde Caruana said that with these two measures alone, many pensioners will receive an extra €500 a year, equivalent to an extra pension payment.

In order to ensure that these increases are not lost to tax, the taxable ceiling on pensions is being raised to €14,318. Those couples on the married tax band will continue receiving an extra €3,600 which is also exempt of tax.

Free medicines for over 80s

People aged 80 and over who already receive Supplementary Assistance because their income is below a certain amount will automatically become eligible for free medical assistance, better known as the Pink Card, without the need of a means test.

Around 4,500 elderly people will start receiving free medicines for the first time.

The Grant for Senior Citizens for people aged 80 or over still living in the community or in a private nursing home will see an increase of €50 to €400 per year.

About 21,000 people will benefit from this increase at a cost of €1 million. This grant will start being paid at €300 per year when the senior turns 75. Those receiving the grant who do not qualify for a contributory pension but have paid some contributions will receive both grants together.

Widow’s pension

The government will also adjust the widow’s pension to bring it closer to the pension to which their late spouse was entitled. Some 12,000 pensioners will see an increase of €5 a week, with a total expense of €3.3 million.

Those who receive a widow’s pension and who earn not more than €10,221 will receive between €10 and €15 in increases equivalent to between €520 and €780 a year.

Service pensions

Service pensions will be increased by €200 which will not be considered in the assessment of the social security pension. The sum that will be exempt will be €3,066. Those service pensioners who are over 72 years of age or who turn 72 next year will benefit from further improvements in their social security pension as the sum will be completely ignored. Around 3,250 service pensioners will benefit from this, with a total expenditure of €2.7 million.

Pensioners will receive the full cost of living adjustment for those pensioners who retired after 2008. In 2022, 43,000 pensioners will benefit from a maximum increase of €2.50 per week or €130 per year, at a cost of € 2.5 million.

An increase of €150 in the annual bonus will be given to people who have reached retirement age but do not qualify for the pension because they did not have enough contributions. The bonus for those who paid less than 5 years stamps will increase to €400 per year and for people who paid more than 5 years stamps the bonus will increase to €500 per year.

Around 12,500 people, mostly women, will benefit from this increase at a total cost of almost  2 million. This will be the fourth and largest increase in this bonus since the governemt started giving it in 2015, Caruana said.