The Church’s Justice and Peace Commission wants the pensions system to be reformed to no longer exclude non-EU workers.
Many non-EU workers are not eligible for a Maltese pension once they retire, even if they have paid taxes and national insurance for years.
The Church commission believes this is “socially unjust and morally unacceptable” and has called on the government to reform the system to ensure such workers are no longer treated as a “subservient underclass”.
The number and proportion of non-EU workers contributing to Malta’s economy has skyrocketed over the past decade. Currently, there are more than 40,000 such workers in the country. Around 77 per cent of them earn less than €21,000 annually.
According to figures tabled in parliament by Finance Minister Clyde Caruana, National Insurance contributions by foreign workers increased by 570% from 2012 till 2021 to reach over €1 billion in total.
Over the same time-period, these workers also paid over €1.3 billion in income tax with the yearly total increasing from nearly €48 million in 2012 to €250 million in 2021.
Despite the demographic shift in Malta’s workforce, pensions provisions have remained unchanged. The system currently in place is designed on the assumption that non-EU workers will only spend a few years in Malta and leave before reaching pensionable age.
That, the Church commission believes, is unjust.
“Without any realistic possibility of making Malta their home, non-EU workers do not benefit totally from the fiscal social contract in which people pay tax and, in turn, receive public goods and services, including a pension,” it said in a statement on Saturday, two days before Workers Day.
If workers’ home countries do not have bilateral agreements with Malta in place, they do not even receive a pension if they opt to move back there after working in Malta.
“The economic “success” of our country and the sustainability of our social benefits should never be obtained at the expense of workers, whoever they are and wherever they come from,” the Commission said as it called for the country to question how it defined economic success.
Pope Francis had last year urged business leaders to measure success according to “the number of people who move out of extreme poverty” instead of “profits, expansion, and short-term and shortest-term results”, it noted.
The Commission therefore called for a new social contract that promotes and respects the rights and dignity of all workers, including non-EU ones.
“Given that there can be no social justice without tax justice and no social cohesion if the rights and dignity of some are blatantly ignored, an economic and pension system which depend on the use and abuse of tax-paying workers who are then left empty-handed and discarded when no longer needed, should be firmly and roundly rejected,” it said.