In his opinion piece ‘Pensioners short-changed’ (January 24), Arnold Cassola makes several misleading claims.
Firstly, he absurdly claims that pension benefits are kept low because of a lack of funds. On the contrary, the latest Financial Estimates indicate that in 2024 the allocation for retirement pensions alone is €796 million.
This is the highest amount ever allocated and is nearly €118 million higher than in 2022 and €385 million higher than in 2013. This is an increase of 17% over the last two years and almost 94% since the change in government in 2013.
It is a fact that the investment in the retirement pensions has almost doubled under the PL government. The size of this increase testifies to the fact that pensioners are being given the highest ever increases on record.
Secondly, Cassola likes to divide pensioners between those who paid the highest rate of social security contributions and the remaining ones, arguing that those who paid the highest rate are facing a shortfall.
This is completely incorrect. The government has over the last years granted the same increase to all pensioners, no matter what rate of contributions they had paid. For instance, this year, all pensioners will get a €15 weekly increase.
Some categories of pensioners will get even higher increases. For instance, widows will get an additional amount and those who retired after 2008 are receiving an additional increase in their cost-of-living bonus, to address another anomaly created by a PN government.
So to set the record straight, for the last seven years pensioners on the highest rate were not receiving a lower increase than other pensioners, contrary to what Cassola claimed.
Thirdly, it is totally misleading to claim that there is one group of pensioners who paid the highest rate.
The highest rate of contributions, in fact, changes every year. So, someone who has paid the highest rate of contributions will have paid different amounts over time.
There is also the added issue that depending on the year when someone was born (the anomaly created in 2006 by a Nationalist administration), the person who paid the highest rate will have paid it on a much lower amount of income than someone born after 1962.
Pensioners are being given the highest ever increases on record
Furthermore, persons who were born before 1962 also had a different pension age, and so they will probably have been in receipt of pensions for an additional number of years compared to other pensioners.
Moreover, they also had very different contributory periods, ranging from 30 years for those born before 1952, to 41 years for those born after 1968.
Fourthly, this last point explains why there are different contribution credits for mothers (parents to be precise). These mothers (or parents) had very different contribution periods.
Consider a mother of one child born in 1952. She would need 30 years to get a full pension. If the same mother was born five years later, in 1957, she would need 35 years of contributions, and gets two years of credits, and so she would need to have paid for 33 years for a full pension.
If the same mother was again born five years after, in 1962, she would need 40 years of contributions, receiving four years of credits and so needing to pay 36 years to receive a full pension.
So, despite the imaginary discrimination that Cassola claims against mothers born before 1952, for the same number of contribution years they still would likely qualify for a better pension than those born in later years.
The process of granting up to a €9.47 weekly increase to those born before 1962 and who are on the maximum pension is gradual and is being carried out by the Department of Social Security over the coming weeks.
Every pensioner who will qualify for this additional increase will receive arrears accruing from the start of this year. I am informed that the department has already worked out around 6,000 of such cases, of which around 1,000 are widow pensioners who also stand to benefit from such measure – surely we are not waiting for the June elections to pay what is due. Those gimmicks belong to others and not to the Labour administration.
Such pensioners will thus have received a ‘pittance’ (as Cassola described it) of a €24.47 weekly increase in their pension in 2024 alone and an increase of at least €74 weekly since 2013.
This is equivalent to more than four extra pension payments per year at the pension rate they enjoyed in 2013 – excluding the thousands of euros such pensioners are enjoying in tax savings.
Finally, it is important to mention another important reform that affected pensioners among other, and which has already improved their purchasing power, namely the extension of the eligibility of the additional mechanism against the cost of living.
Before the recent changes, most pensioners did not qualify for this benefit, while now they do. This benefit ranges from €100 to €1,500 annually per household.
The department and this administration remain committed to continue improving the financial resources of all pensioners, no matter what level of contributions they paid, rather than focusing, as Cassola does, on just those on the highest pension rates.
Michael FalzonMichael Falzon is Minister for Social Policy and Children’s Rights.