The Maltese value the broad protection that our social security infrastructure provides and legitimately expect continued improvement to meet emerging societal changes and challenges.
Broad swathes of the population draw contributory and non-contributory benefits, ranging from pensions and child allowances to in-work benefits and unemployment assistance.
In 1948, Malta’s legislation had already provided means tested pensions to persons over the age of 60 years and in succeeding years covered other categories as well. But the real green shoots of a welfare state sprouted out eight years later with the enactment of two key bills – the National Insurance Act on May 7, 1956 and the National Assistance Act a few weeks later – and with the concurrent birth of the Department of Social Security, which was then known as the Department of Emigration, Labour and Social Welfare.
At the time, Maltese society was still grappling with the social and economic fall-out from World War II. Tourism and private enterprise were in their infancy and the economy was heavily reliant on British services’ expenditure, so much so that 27 per cent of the gainfully occupied population was employed by British establishments. Unemployment was steep, job opportunities sparse and young people and heads of households had to emigrate to make a living.
The National Assistance Legislation established the provision of social and medical support, both in cash and in kind, to the unemployed and persons in search of a job or unable to hold a job because of ill-health. Additionally, it kicked off free institutional care for the aged, free hospitalisation and treatment in State-run institutions and hospitals.
On its part, the National Insurance Act launched a mandatory contributory social insurance programme providing a wide range of benefits, allowances and pensions coverage to employees. Some years later the law was amended to extend coverage to the self-employed and introduce the Two-Thirds pension, for employed and self-employed.
The two laws, together with Age Pension Act, early in 1987 were merged into the Social Security Act, which is now the umbrella ‘rule-book’ for the provision of all contributory and non-contributory benefits, with an annual outlay which this year is estimated to exceed €1.2 billion.
Successive administrations have fleshed out the provisions of the legislation to strengthen the social infrastructure and ensure solidarity between generations so no one is left behind. This was achieved through enhanced benefit rates, the widening of eligibility criteria and the introduction of new concepts based on social justice.
Solidarity was particularly in evidence at the peak of the COVID-19 pandemic, when our Ministry expeditiously intervened to support vulnerable and disabled employees in the private sector, parents of school-age children and employees who temporarily lost their job by putting up a package of short-term benefits to help them bridge their lay-offs during the pandemic. Our response dove-tailed with the longer-term support packages rolled out by other Ministries to soften the consequences of the pandemic on employment, health and the social fabric.
Labour market activation measures injected in the social network since 2014 to make work pay and reduce welfare dependency also weathered the pandemic shocks. The package consists of the In-Work Benefit scheme, tapering of social benefits, and free childcare for parents in employment and education.
Backed by a robust economic growth and the concomitant creation of new job opportunities, these measures have spawned record declines in the numbers of social assistance and unemployment beneficiaries. Significantly, dependents on unemployment assistance sunk by 84 per cent in seven years, from 5,713 in 2014 to 933 in 2021; while the number of social assistance beneficiaries dropped from a high of nearly 14,000 in 2014 to just over 4,400 in 2021.
Employment is now at a record high, with the NSO reporting the national employment rate in 2020 for the 20 to 64 age group exceeding by more than seven percentage points the national Europe 2020 target of 70 per cent. The social activation measures significantly stimulated the participation of females in the labour market and their employment rate now exceeds the EU average.
The savings registered from the drop in social assistance have been channelled to finance increased children’s allowances and the addition of a supplement for each child under 16 years, the disability assistance reform, the introduction of packages for carers of elderly persons living in the community, and the recent substantial pension rates increases.
Social protection, justice and inclusion are our Ministry’s core values. While we mark and celebrate the progress achieved over the past decades, we remain focused to follow on the trail blazed by our predecessors by continuing to invest our resources and energies to combat poverty and social exclusion, reduce inequalities and promote better living for our beneficiaries. Our integrated approach in the years ahead will be guided by the social strategy and principles mapped out in the manifesto approved by the electorate in March and which have now become the Government’s programme and the basis of our action. It will also be guided by a national social vision which will be launched shortly with the aim of positively shaping our society’s future in the next 10 to 15 years.
This is the closing article from a series, as part of the Social Justice Month organised by the Ministry for Social Policy and Children’s Rights during May 2022.
Mark Musù is Permanent Secretary at the Ministry for Social Policy and Children’s Rights and at the Ministry for Social and Affordable Accommodation.