Malta Social Tax Measures – Chetcuti Cauchi Advocates, Tax Consultant, Malta

Malta Budget Report 2003
2 0 0 3


Aim: To improve the quality of life for people in need.


Capital Means Test

Currently: Means test for entitlement to non-contributory Old Age Pension:

  • Single persons: Lm6,000
  • Married couple: Lm10,000

Measure: Extension of above means test to entitlement to:

  • Social Assistance,
  • Medical Assistance, and
  • Social Security Pension.

Increase in Supplementary Allowance

Aim: To provide for those with less income.

Measure: Increase in & extension of the Supplementary Allowance scheme.

Income eligible for Supplementary Allowance:

  • Married couple: Lm4,200 (increased)
  • Single: Lm3,270 (unchanged)

Ceiling on which benefit is calculated remains unchanged:

  • Married couple: Lm10,270
  • Single person: Lm8,270

Increase in percentage rates applicable on the difference between the existing levels and the income of the beneficiary:

  • Married couple: 1.75% (increased)
  • Single person: 1.25%.

Threshold for income applicable for these calculations remains unchanged: Lm2,220 for all beneficiaries.

Payment for maintenance of children in cases of personal separation

Currently: Under the Income Tax Act, maintenance paid is taxable in the hands of both the paying & the receiving spouse.

Measure: Children’s maintenance allowance is not to be taxed in the hands of the receiving spouse.

Increase in Childrens Allowance for those with three children and more

Measure: Increase in rates on which Childrens Allowance is calculated for persons with three or more children:

  • 3 children: 12%
  • 4 children: 14%
  • > 4 children: +2% (not 1.5%)

New procedures in working of tax calculations on arrears of pensions

Aim: To spread tax arrears arising out of revisions of pensions on the respective years of income on which the pension arrears were due.

Measure: applicable:

  • on all arrears paid on 1/1/2003, provided that these do not go back to prior 1999: arrears due before that year will be added on to the income of 1999 for tax purposes;
  • on all arrears paid 1999 – 2002, provided they are due to erroneous calculations on pensions made by some Government Department.

Increase in the cost of living for pensioners

Aim: To adopt the workings of a new Cost of Living Index that would justly reflect the expenditure patterns of pensioners.

Measure: A weekly increase in costs of living Lm1.27c, calculating the Price Index in accordance with the expenditure patterns of pensioner-households, applicable to:

  • Two-Thirds Pension rate,
  • and the Survivors Pension,
  • the Retirement Pension,
  • the Invalidity Pension,
  • the Widows Pension,
  • single persons’ National Minimum Pension, and
  • single persons’ Old Age Pension.

Justice with Casual Social Assistants

Measure: Casual Social Assistants (635), who provide services to our elderly, will no longer be considered as self-employed but as part-time with all the pertinent rights under labour legislation.

Financial assistance for parents with children under two years who attend Child Day Care Centres

Aim: Increasing female participation in the creation of wealth both for her own sake and for that of the country.


  • Subsidy of payments for day care service for small children – projected for working women with children under 3 years of age who are left at a licensed Child Day Care Centre – means tested;
  • A regulatory framework to ensure that the service given by these Child Day Care Centres will be of the desired standards.

back.pngBack to Budget 2003 Index