Malta | Budget 2017 – Pensioners

Malta | Budget 2017 – Pensioners

13 relevant Government Budget 2017 measures affecting pensioners:

  • Cost of Living Allowance (COLA) – increase of €1.75 per week commencing January 2017 – view 2017 COLA
  • Malta resident status tax rates for 2017 – view 2017 resident status tax rates
  • Certain persons receiving dividends on profits from companies quoted on the Malta Stock Exchange during 2017 shall have this tax refunded if declared in the tax return
  • The minimum pensions shall increase by €4 per week and pro-rata for those receiving a pension slightly higher than the minimum pension
  • Pensioners of the age of 61 and over who qualify for the single rates shall be exempted from tax on the first €10,500 in 2017 (€13,000 in 2018) on income derived from pensions (Examples: treasury, social security, local and foreign pensions)
  • Pensioners who qualify from the married tax rates shall be be exempted from tax on the first €13,000 in 2017 on income derived from pensions and additionally exempted from tax on the first €500 in 2017 (€1,000 in 2018) on other income
  • Pensioners who qualify for the parent tax rates shall be exempted from tax on the first €11,500 in 2017 (€13,000 in 2018) on income derived from pensions
  • Pensioners of 75 years and over shall retain the grant of €300 p.a. on the condition that they live in their own home
  • In 2017 pensioners who have not reached the age of 75 and who have paid between 1 year and 5 years of social security contributions shall receive a bonus of €150, an increase of €50
  • In 2017 pensioners who have not reached the age of 75 and who have paid over 5 years of social security contributions shall receive a bonus of €250, an increase of €50
  • Service pension shall increase by €200 and shall be deducted from the social security pension
  • The differences between female and male pensions shall be eliminated by bringing female pensions equivalent to male pensions
  • The wage subsidy for care workers caring for old aged persons who are in the waiting list to enter a government managed care home shall reach a maximum subsidy of €5,200p.a.

 

  Government Budget 2016 Highlights   Click here for full Government Budget 2017 Highlights

Downloads:
  Budget 2017 Speech in Maltese

Links:
  Relevant Government budget measures 2017
  Relevant Government Budget 2017 measures affecting pensioners
  Relevant Government Budget 2017 measures affecting 1st time buyers

15 thoughts on “Malta | Budget 2017 – Pensioners

  1. I am a 67 year old pensioner and I still work for 25 hours a week. My pension plus work amounts to 20,500. euros yearly. What is my tax exemption for year 2017. To my understanding I heard a lot of definitions which it is still not cleared as yet. This means that on my yearly total earnings, on the first 13,000 euros I am exempted and pay 15% in the following.

    • Legal Notice 42 of 2017 has clarified the Government Budget 2017 measures on Pensions. The Legal Notice does not mention exemptions but tax rebates allowable as a set-off. The tax rebates allowed against taxed income earned in the year 2017 shall in no case give rise to a tax refund and shall not be allowed to be carried forward to following years.

      The workings for the tax rebate for pensioners over 61 years of age are the following:

      Persons applying the Single Tax Rates with pension exceeding €9,100:
      Pension Tax Rebate = [(Pension Income – €9,100) * 0.15]
      Condition: Maximum tax rebate cannot exceed €210

      Persons applying the Parent Tax Rates with pension exceeding €10,500:
      Pension Tax Rebate = [(Pension Income – €10,500) * 0.15]
      Condition: Maximum tax rebate cannot exceed €150

      Persons applying the Married Tax Rates with pensions exceeding €12,700:
      Pension Tax Rebate = [(Pension Income – €12,700) * 0.15]
      Condition: Maximum tax rebate cannot exceed €45
      An additional further tax rebate is being granted for pensioners earning additional taxable income:
      Total Tax Rebate = [(Total Income – €12,700) * 0.15] – [Pension Tax Rebate as above]
      Condition: Maximum tax rebate cannot exceed €75

  2. I am a 65 year old pensioner and I am still working. My current pension is around €938 every 4 weeks. Do I benefit from the tax exemption and how? I earn about €18,000 a year plus the above mentioned pension.

    • According to the understanding of the Budget 2017, which is not law yet, if you utilise the married tax rates then your pension should be exempt from tax on the first €13,000 in 2017. In your case the annual pension should be around €12,500 in 2017. This means that you would be exempt from tax on your pension, yet as a point of interest the first income tax bracket which ranges from €0 to €12,700 is at the 0% tax rate and your pension fits this criteria. This means that in your case your pension would not attract an effective exemption based on the Budget 2017 measure. Yet you should benefit from an exemption on the first €500 on other income over and above your pension.

    • This budget measure 2017 applicable to pensioners is still not very clear and we are waiting for the necessary changes to the tax legislation to be in a better position of understanding how it shall work. Yet, if you are pensioner and qualify for the married tax rates you shall be exempted from tax on the first €13,000 in 2017 on income derived from pensions and additionally exempted from tax on the first €500 derived from other income.

  3. I am a pensioner and my pension is €870 every 4 weeks (2/3rds pension). Besides the COLA am I entitled to any other benefit?

    • The information you provided is not sufficient to assess your situation. The following may be applicable to your case assuming you may utilise the single tax rates:
      * the minimum pension shall increase by €4 per week and pro-rata for those receiving a pension slightly higher than the minimum pension
      * Pensioners of the age of 61 and over who qualify for the single tax rates shall be exempted from tax on the first €10,500 in 2017 (€13,000 in 2018) on income derived from pensions (Examples: treasury, social security, local and foreign pensions)
      * In 2017 pensioners who have not reached the age of 75 and who have paid between 1 year and 5 years of social security contributions shall receive a bonus of €150, an increase of €50
      * The wage subsidy for care workers caring for old aged persons who are in the waiting list to enter a government managed care home shall reach a maximum subsidy of €5,200p.a.

      Therefore if you can apply the single tax rates then your pension will be taxed in 2017 at zero rate on the first €10,500 earned and the rest will be taxed at the applicable tax rates starting at 15%.

    • I am a pensioner too and the information you supplied is not enough!

      Are you married? If yes does your spouse receive a pension? Are you 75 years or older? Are you on the waiting list to enter a government care home? Are you entitled to the Karta ir-Rosa or Karta is-Saffra?

      If you call the government helpline on 80076677 you might get an answer if you provide them with this information and more.

      Since your pension is what it is and on the low side for a pensioner with today’s cost of living, the probability, as I am in a similar situation and I have already called the Helpline, is that you will not benefit much more from this budget. In other words the situation you are in today will remain the same in 2017, if not worse, if prices of food and medicines continue to increase.

      If you learn anything new from the helpline on 80076677 kindly share it with us pensioners following this webpage.

      Thanks Charles

  4. If we are going to get an increase of €200 to our service pension, but then this amount will be DEDUCTED from our social security pension, then how on earth are we going to benefit?????

    • This is the quote from the Budget 2017 speech: “Mis-sena d-dieħla se nkunu qed nerġgħu inżidu €200 oħra fl-ammont ta’ pensjoni tas-servizz li jitnaqqas mill-pensjoni tas-sigurtà soċjali. Din il-miżura se tkun qed tolqot aktar minn 5,000 pensjonant tas-servizz.” see Page 38
      You may wish to contact the Budget 2017 Helpline on 80076677 so that they may provide you some more insight on your concern.


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