Currently, there is no minimum pension in Malta, which means that many old people are living off very little money, and often do not have the chance of properly enjoying their retirement. Many people are at risk of living in poverty.
Michael Farrugia, the Social Solidarity Minister, recently announced that the government is considering a national minimum pension. Poverty among pensioners is not the norm, and compared to the rest of the European Union, the figure is quite low. However, the government wants to reduce this number to ensure that no one has to live in poverty in Malta.
The new bill is covering the third pillar pension, which covers people that contribute to a private pension, which will act as a top up to their state pension. In general, private pensions have to become more common in Malta. There will be a number of incentives linked to the scheme when it is introduced in the next weeks.
This progress, and the introduction of the new bill is satisfying pension working groups, who have been suggesting the introduction of a third pillar pension for a long time. The previous government had been given the suggestion as well, however all they did was to raise the retirement age. The government has kept their promise not to raise the pensionable age further.
The National Pension Scheme in Malta
When you live and work in Malta you also make contributions to the National Insurance Scheme. If you are in employment, you and your employer will have to contribute 10% of your salary, and if you are self-employed, you will have to pay at least 15% or around 28€ a week. The government will then add another 50% of this amount to the pension fund. The retirement age in Malta is 65 years for persons who were born after 1961. They are entitled to a state pension if they have collected a minimum of 156 weeks of paid insurance contributions, with a minimum of 20 weeks per year.
Malta also has social security agreements with all other European member states, and Australia and Canada, which means that expatriates can benefit from the Maltese state pension if a social security agreement exists.
