Pensioners will receive an additional €5 a week, workers will get an extra day of vacation leave and an income tax refund is being raised, Finance Minister Edward Scicluna announced during his Budget 2021 speech.
Workers will as of January be receiving an additional €1.75 a week as part of an automatically-calculated Cost-of-Living-Adjustment which is intended to combat the impacts of inflation. Last year, COLA reached €3.49 a week.
They will also be receiving an additional day added to their vacation leave, as has been the case in recent budgets, to make up for public holidays which fall on weekends.
An income tax refund scheme introduced two years ago is also being raised for all categories. Workers on the lowest incomes will now receive a €95 cheque. Those in the top category, earning up to €60,000 will get a refund of €45. Previously, the maximum was set at €68. As a result, government spending on the refund will rise from €11m to €16m.
Workers will also be given further incentives to invest in a private pension scheme, with the first €3,000 invested in such a plan made tax-free. Previously, the tax-exempt threshold stood at €2,000.
The government will also allocate €9 million for compensation to workers who suffered injustices in the past. An estimated 5,500 workers are expected to be eligible for compensation. Funds will also be allocated as compensation to former dockyard workers exposed to asbestos.
Budget 2021 for pensioners
Pensioners will, as usual, get the full COLA increase, which this year stands at €1.75 a week, as well as an additional €3.25 per week increase, bumping their pensions up by a total of €5 per week.
It is the sixth consecutive budget when pensions have been increased. Last year, pensions were raised by €7 a week - the highest pension increase since 1980.
The tax ceiling is being raised to ensure pensions will not be taxed.
Excluding the COLA increase, pensioners received an additional €3.51 per week in 2020, €2.17 per week in 2019 and €2 per week in 2018.
Tax laws will also be amended to close a loophole which led to some pensioner couples being forced to pay income tax when only one of the two pensioners works.
Social security contribution rules are also being amended for those born before 1962, the minister said. The change is intended to ensure that a number of workers – mainly women who are now approaching a pensionable age - who had started working as 16-year-olds would be able to count those early years of work as having contributed to their pension.
Those in receipt of service pensions will have another €200 deducted for the purposes of calculating their social security pension.
As of next year, free public transport will be extended to anyone aged 70 or over. Currently, people aged over 75 are eligible for bus ticket refunds.
Anyone employing a carer to help look after an elderly person will receive an additional €700 every year, with a grant rising from €5,291 per year to €6,000. The scheme will also be extended to those who engage a carer to help a person with disabilities.
The government is also planning to issue new savings bonds with favourable interest rates, specifically targeting savers aged over 62.
Independent journalism costs money. Support Times of Malta for the price of a coffee.Support Us