Perspectives

Social measures

Malta Budget 2017

Deloitte Malta presents a summary and analysis of the Malta Budget 2017 speech presented to the House of Representatives by the Hon. Prof. Edward Scicluna, Minister of Finance on 17 October 2016.

In-work benefit

The current ‘in-work benefit’ for parents who are both gainfully occupied and whose combined annual income is between €10,000 and €20,399, will increase from €1,000 to €1,200 per child per annum.  However if the combined annual income is more than €20,400 but does not exceed €24,000, then the ‘in-work benefit’ is just €170 per child per annum.   

The current ‘in-work benefit’ for single parents whose annual income is between €6,600 and €14,999 will increase by €50 per child per annum to a maximum of €1,250. However, if annual income is more than €15,000 but does not exceed €16,500 they will be entitled to an ‘in-work benefit’ of just €50 per child per annum.

The current ‘in-work benefit’ for parents where only one parent is employed will increase from the current level of €150 per child per annum to a maximum of €350 per child per annum depending on the family’s total annual income which must not exceed €16,500.

Supplementary benefits

The annual income threshold entitling married persons who are gainfully occupied and who have children over 16 to receive Supplementary Benefits will increase from €11,089 to €13,000 per annum (€9,012 in the case of single persons in gainful occupation). 

Minimum annual pension

The minimum annual pension payable to married couples and who are in receipt of only one pension will increase by an additional €4 per week to €144 per week. This increase will also be paid pro-rata to other pensioners who are in receipt of a higher pension.

Income tax for pensioners

Pensioners over the age of 61 in receipt of pension income will be exempt from income tax on pensions of up to €13,000 per annum.  This applies to social security, treasury as well as other local or foreign pensions. This exemption will be introduced over a period of two years as follows: 

Basis of tax computation   Exempted income in 2017 Exempted income in 2018

Single rate

€10,500

€13,000

Married rate

€13,000

€13,000

Parent rate

€11,500

€13,000

 

Married couples in receipt of a pension will benefit from an additional exemption of €1,000 per annum on their total income, introduced over two years as follows:

Basis of tax computation Exempted income in 2017 Exempted income in 2018

Married rate

€500

€1,000

 

Senior citizens grant

Senior citizens over the age of 75 will be entitled to an annual grant of €300.

Contributory retirement grant

The annual grant applicable to pensioners who have not yet reached the age of 75 and who have not paid sufficient social security contributions to qualify for a Contributory Pension will increase by €50 to a maximum of €250 per annum, depending on the number of years of contributions.

Rental subsidies

The rental subsidy will double from the current maximum of €83.33 to €166.66 per month depending on the size of the family and the household income.

Rent adjustments

Increases in the annual minimum rentals as established by law every three years in 2010, 2013 and 2016 will no longer apply to residences rented from the Government or the Housing Authority. Any increases applied in 2013 will be refunded to tenants.

Carer at home subsidy

Elderly persons who reside at home and who are on the waiting list for entry to a residential home for the elderly are entitled to a Carer at Home subsidy will be increased in 2017 to a maximum of €5,200 per annum.

Savings Bond for pensioners

The decrease in the rate of interest paid on bank deposits has resulted in a substantial loss of income for pensioners. To address this situation, a special Savings Bonds with attractive interest rates will be issued by the Treasury, targeted specifically at pensioners.

Disclaimer: This publication reflects high level announcements made in the Budget Speech on 17 October 2016, which are typically implemented through detailed legislative amendments and tax guidelines that have yet to be published. Clients are advised to seek appropriate professional advice following the publication of such detailed amendments or guidelines and prior to implementing any actions based on the information given in this publication.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/mt/about for a more detailed description of DTTL and its member firms.

Deloitte Malta refers to a civil partnership, constituted between limited liability companies, and its affiliated operating entities: Deloitte Services Limited, Deloitte Technology Solutions Limited, Deloitte Digital & Technology Limited, Deloitte Digital Limited, Deloitte Technology Limited, and Deloitte Audit Limited. The latter is authorised to provide audit services in Malta in terms of the Accountancy Profession Act. A list of the corporate partners, as well as the principals authorised to sign reports on behalf of the firm, is available at www.deloitte.com/mt/about. Cassar Torregiani & Associates is a firm of advocates warranted to practise law in Malta and is exclusively authorised to provide legal services in Malta under the Deloitte brand.

Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 ® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 245,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn, or Twitter.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

© 2016. For information, contact Deloitte Malta.

Did you find this useful?