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Pensions Information

 

Retirement Pensions

 
Contributory retirement pensions can be divided into two schemes, the flat rate pensions and the two-thirds pensions.
 
The flat rate pensions are awarded to pensioners who also receive a service pension and to pensioners who have a low pensionable income. The two-thirds pensions are awarded to all other pensioners.
 
A full retirement pension requires a yearly average of at least 50 contributions from 1956 or from age 19 (whichever occurs later) and/or from age 18 if born after 1958 up to the last full year prior to the year of retirement.
 
With effect from January 2014, the pension age has increased to 62 years for both males and females and the accumulation of contributions for a full two-thirds pension has increased to 35 years.

Incentives for persons keeping their employment beyond their Pension age.

This is the first step the Government of Malta will be taking and thus initially, this incentive will be open to workers in the private sector and self-occupation as follows;

For persons entitled to a Retirement Pension at age 61 who opt to continue working till age 62 without claiming their retirement pension at age 61, a 5% increase in pension rate entitlement at age 62.                       

For persons entitled to a Retirement Pension at age 62 who opt to continue working till age 63 without claiming their retirement pension at age 62, a 5.5% increase in pension rate entitlement at age 63.      

For persons entitled to a Retirement Pension at age 63 who opts to continue working till age 64 without claiming their retirement pension at age 63, a 6% increase in pension rate entitlement at age 64.          

For persons entitled to a Retirement Pension at age 64 who opts to continue working till age 65 without claiming their retirement pension at age 64, a 6.5% increase in pension rate entitlement at age 65.      

Those opting to postpone their Retirement Pension award for more than one year, will have their pension percentage incease accumulated as follows;

For persons entitled to a Retirement Pension at age 61 who opt to continue working till age 63 without claiming their retirement pension at age 61, a 10.5 % increase in pension rate entitlement at age 63.   

For persons entitled to a Retirement Pension at age 61 who opt to continue working till age 64 without claiming their retirement pension at age 61, a 16.5% increase in pension rate entitlement at age 64.    

For persons entitled to a Retirement Pension at age 61 who opt to continue working till age 65 without claiming their retirement pension at age 61, a 23% increase in pension rate entitlement at age 65.       

For persons entitled to a Retirement Pension at age 62 who opt to continue working till age 64 without claiming their retirement pension at age 62, a 11.5% increase in pension rate entitlement at age 64.

For persons entitled to a Retirement Pension at age 62 who opt to continue working till age 65 without ​claiming their retirement pension at age 62, a 18% increase in pension rate entitlement at age 65.

For persons entitled to a Retirement Pension at age 63 but choose to work till age 65 without claiming their retirement pension at age 63, a 12.5% increase in pension rate entitlement at age 65.

The pencentage pension increase is cumulative and will be paid till date of pensioner’s demise.

The percentage pension increase will be payable to all eligible persons in receipt of a Contributory Retirement Penison who satisfy the above conditions including those in receipt of the Maximum Two Thirds Pension.

The percentage increase is payable apart from other pension increases, included Cost of Living Increases.

The percentage increase is tranferred in the case of a Widows Pension.

Further information

Statutory Pension age for a person born between 1952 and 1955 is 62 years.

Statutory Pension age for a person born between 1956 and 1958 is 63 years.

Statutory Pension age for a person born between 1959 and 1961 is 64 years.

Statutory Pension age for a person after 1961 is 65 years.

A person born between 1952 and 1961 can opt to retire at age 61, provided he/she is not in any gainful occupation and has paid 1820 contributions between age 18 and date of retirement.

A person born between 1962 and 1968 can opt to retire at age 61, provided he/she is not in any gainful occupation and has paid 2080 contributions between age 18 and date of retirement.

A person born after 1968 can opt to retire at age 61, provided he/she is not in any gainful occupation and has paid 2132 contributions between age 18 and date of retirement.

The Incentives for persons keeping their employment beyond their Pension age comes into effect as from the 1st January 2016. Therefore, a person who was eligible for a Contributory Retirement Pension at least at age 61 but opts to claim his pension at least with a one year deferral will benefit from the mentioned pension percenrtage increases. This increase will accumulate yearly as the pension award date is postponed. Agreement with employer is to be reached if a person opts to retire after own statutory pension age.

Hereunder are three examples that will help in explaining this new incentive (assuming that the cost of living allowance will be € 1.75 weekly).

1.       A person entitled to  a contributory pension of € 8,000 per annum (€ 153.84 per week) at age 61.

If pension is claimed at age 62 instead of age 61, pension would increase to € 8,496 (€ 163.38 weekly)

If pension is claimed at age 63 instead of age 61, pension would increase to € 8,907 (€ 171.29 weekly)

If pension is claimed at age 64 instead of age 61, pension would increase to € 9,462(€ 181.96weekly)

If pension is claimed at age 65 instead of age 61, pension would increase to € 10,065 (€ 193.56 weekly)

Therefore, if a person who is entitled to a contributory pension of € 153.84 per week at age 61, continues employment till age 65 and thus claims his/her pension at age 65, would have his pension entitlement increase to € 193.56 per week, a net increase of nearly € 40 weekly.

2.       A person entitled to a contributory pension of € 9,500 per annum (€ 182.69 per week) at age 62

If pension is claimed at age 63 instead of age 62, pension would increase to € 10,023 (€ 192.75 weekly)

If pension is claimed at age 64 instead of age 62, pension would increase to € 10,661 (€ 205.01 weekly)

If pension is claimed at age 65 instead of age 62, pension would increase to € 11,354 (€ 218.35 weekly)

Therefore, if a person who is entitled to a contributory pension of € 182.69 per week at age 62, continues employment till age 65 and thus claims his/her pension at age 65, would have his pension entitlement increase to € 218.35 per week, a net increase of nearly € 36 weekly.

3.       A person entitled to a contributory pension of € 11,500 per annum (€ 221.15 per week) at age 63

If pension is claimed at age 64 instead of age 63, pension would increase to € 12,190 (€ 234.42 weekly)

If pension is claimed at age 65 instead of age 63, pension would increase to € 13,006 (€ 250.12 weekly)

Therefore, if a person who is entitled to a contributory pension of € 221.15 per week at age 63 and continues employment till age 65 and thus claims his/her pension at age 65, he would have his pension entitlement increased to € 250.12 per week, a net increase of nearly € 29 weekly.​

 

Non-Contributory Age Pensions

 
Unemployed persons who are residents in Malta, over 60 and do not qualify for a contributory retirement pension because they do not have the minimum number of contributions paid or credited, may be entitled to a non-contributory age pension if they satisfy the capital and income means test.
 

Invalidity Pensions

 
Contributory invalidity pensions are awarded to persons who have at least paid 250 contributions and are suffering from a medical condition which according to the medical board of the Social Security Department renders them as permanently incapable for any full-time and/or any part-time employment.
 
Such persons must be incapable for work (suffering from their medical condition) for at least six months prior to their claim and in continuous employment and/or registering for work on the Part 1 register held by the Employment & Training Corporation for at least one (1) year.
 
There are eight rates of Invalidity Pension according to the yearly average of contributions paid and/or credited and the civil status of the claimant. These rates are not related to the salary earned while in employment.
 

Widows Pensions

 
Contributory widow’s pensions are awarded to widows whose spouse had paid not less than 156 contributions and to widows where their spouse died as a result of a personal injury during the course of their duties (employment).
 
A widow's pension is also payable in full without any deductions if widow is carrying out a full-time gainful occupation and, where a widow re-marries, a flat rate widow's pension will be due.
 
 
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