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Minister Vows ‘Gradual’ Changes to Rectify Pre-1962 Pension Disparity

Minister Vows 'Gradual' Changes to Rectify Pre-1962 Pension Disparity
by
August 8, 2023
in Business News, NEWS Malta
282

In an effort to address the disparities in the pension system affecting individuals born before 1962, Social Policy Minister Michael Falzon announced on Tuesday that the government is planning a series of gradual changes. This move comes in response to concerns raised earlier this year by independent candidate Arnold Cassola, shedding light on a peculiar incongruity.

The Anomaly and Minister’s Commitment

The introduction of a new limit for post-1962 pensioners in the 2023 budget raised concerns that it would inadvertently “freeze” the pensions of those born before 1962, effectively maintaining their rates. This discrepancy would lead to a notable disparity, with pre-1962 pensioners receiving nearly €350 less per month than their younger counterparts.

In response, Falzon emphasized during a press conference that the intention is not to “freeze” pensions, but rather to address the historical disparities inherited from the previous Nationalist Party administration. He assured that the government is actively working to rectify this situation.

Government’s Plan of Action

Falzon outlined two key strategies to resolve the issue. Firstly, the government intends to legislate that all pensioners should experience increases in their pensions in a uniform manner and at the same rates, a practice maintained since 2018. Secondly, a gradual adjustment will be made to the highest pensionable income for individuals born before 1962 over several years. The aim is to increase this income at a faster pace than that of their post-1962 counterparts, aiming to eventually bridge the gap.

The specifics of the gradual adjustments were not provided during the announcement, leaving room for further details to be disclosed.

Political Back-and-Forth

The political arena also witnessed exchanges regarding the matter. Labour MP Romilda Zarb argued that the Nationalist Party lacks credibility on social issues and praised the efforts of the Labour government in supporting families and pensioners.

The Nationalist Party (PN), on the other hand, accused Prime Minister Robert Abela’s government of diverting its focus by launching partisan attacks on the opposition instead of earnestly addressing the pension disparity. The PN asserted that it has long been prepared to implement a comprehensive pension reform package that tackles various injustices, even those the Labour Party has been unable to resolve during its decade-long governance.

Arnold Cassola’s Reaction

Arnold Cassola, who initially highlighted the pension anomaly, welcomed Falzon’s commitment to enact change. He noted that Falzon had previously dismissed his concerns as untrue but was now pledging to align pre-1962 pensions with post-1962 counterparts. Cassola expressed optimism about this development.

However, he raised a crucial question about the implementation timeline of these changes. Cassola urged Falzon to clarify whether the adjustments will be enacted over a span of 2-3 years, which he considered reasonable, or if the timeline might extend further, potentially excluding the current eldest pensioners from reaping the benefits of these adjustments. Cassola called for clarity to provide reassurance to pensioners affected by this issue.

Conclusion

The commitment by Social Policy Minister Michael Falzon to rectify the disparity in pension rates for pre-1962 and post-1962 pensioners is a step towards addressing a long-standing issue. With the pledge to make gradual adjustments and bring about equity, the government aims to bridge the gap and ensure fair treatment for all pensioners, irrespective of their birth year.

Frequently Asked Questions

What was the concern raised by Arnold Cassola regarding pensions?

Arnold Cassola highlighted a concern that the new pension limit introduced in the 2023 budget would disadvantage individuals born before 1962, potentially leading to lower pension rates compared to younger pensioners.

How does Minister Falzon plan to address the pension disparity?

Minister Falzon intends to implement gradual changes by ensuring uniform pension increases for all pensioners and by adjusting the pensionable income for those born before 1962 at a faster pace than their post-1962 counterparts.

What is the stance of the Nationalist Party (PN) on the issue?

The PN criticized the government for focusing on partisan attacks rather than addressing the pension anomaly. The PN claimed it has long been prepared to implement a comprehensive pension reform package.

What was Arnold Cassola’s reaction to Minister Falzon’s commitment?

Arnold Cassola welcomed the commitment and appreciated the recognition of the disparity. He sought clarification on the timeline of the changes to ensure transparency and reassure affected pensioners.

How does the government plan to bridge the pension gap?

The government’s plan involves enacting uniform pension increases for all pensioners and gradually adjusting the pensionable income of those born before 1962 to catch up with post-1962 counterparts.

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