Pensions will increase for the eighth year in a row, with a weekly increase of €12.50 or €650 a year, inclusive of the cost-of-living adjustment.
Some 100,000 pensioners will net a yearly increase of €65 million between them, Finance Minister Clyde Caruana announced.
It is a significant increase to the pension, which in the last two budgets, only increased by €5 a week or €260 a year.
The rise reflects soaring inflation, driven by increases in food prices.
"The vulnerable in our society are the ones at risk with the impact of the cost-of-living," Caruana acknowledged in his budget speech.
In the previous two budgets, pensions had only been increased by €5, up from €3.25 per week in 2020.
Pensions had increased by €2.17 per week in 2019 and €2 per week in 2018 over and above the cost of living allowance. This means that pension increases have risen by roughly 500 per cent in the past five years.
Between 2016 and 2018, pension increases had been on the decline, however, the adjustment has been on the increase during the past five years.
Rise in taxable ceiling
The taxable ceiling for pensions will be raised to €14,968, up from €14,318 announced in the last budget. Married couples will also enjoy a further €3,600 that is tax exempt, while pensioners born after 1962 will also see an increase in the highest possible pension that they can benefit from.
Caruana said that from next year some 56,000 pensioners who retired after 2008 will be seeing an additional €1.50 a week, which is set to cost some €1.7 million.
Service pensions will increase by a further €200, while pensions for widows will increase by €3.54 a week, to the cost of €1.6 million.
While orkers who receive a widow’s pension because their spouse died young are normally not entitled to certain benefits, this will be revised next year. This will entitle them to also receive unemployment, sickness or worker’s compensation benefits.
People who have reached pensionable age but are not entitled to a pension will be receiving a €50 increase in their bonus every year, which will climb to a total of €450 a year for people who have less than five years of paid contributions and up €550 to those who have less than 10 years of contributions paid up.
Caruana said this will impact some 15,000 people, most of them married women, which will account for a spend of some €800,000.