Pensioners ask for 90 per cent of cola adjustment

The Alliance of Pensioners' Organisations is seeking an assurance that in the next budget the government would grant pensioners 90 per cent of the cost of living adjustment (COLA) - the whole rate less the amount reduced for National Insurance.

Alliance chairman Albert Tabone told a news conference yesterday that the COLA was calculated on the inflation on the minimum wage and other benefits. Pensioners received two thirds of this increase irrelevant of the level of salaries where they used to work.

In a report to the European Commission on a strategy for protection and social inclusion for 2006 to 2008, it was noted that the national minimum pension would be of not less than 60 per cent of the average median income and this would be revised annually. This policy significantly reduced the number of persons at poverty risk.

The actual situation was somewhat different. Where the current wage of positions which had been occupied by the elderly, and on which their pension was calculated, did not exceed the highest pensionable income of Lm7,048, the elderly would benefit with the regular revision of their pension because of the wage revision.

However, there were thousands of pensioners who did not receive any increase except for the two thirds of the cost of living increase calculated on the social wage.

This was because they only got the COLA as they were self-employed or because the wage was equal to or over the highest pensionable income.

In spite of the report to the European Commission which gave the impression that the formula which ensured that the national minimum pension would never be less than 60 per cent of the median income would be adopted within three years, according to the pension reform, this was to be applied from January 1, 2027.

Till then, the current 18 per cent of pensioners living below the poverty line were expected to continue living in this way.

The alliance said that the highest pensionable income of all those born before January 1, 1962 should gradually go up to reflect inflation with additional revisions every so often to keep up to date with wage increases and improved standards of living. Mr Tabone said that the government itself admitted that those who received the highest pension saw a drop in real income. The situation was worse for a number of pensioners who, on retirement, found they were receiving a pension of 50 per cent or less than their salary. But nothing was being done for the situation to be rectified.

In many other countries it was considered that not even inflation proofing (full compensation for inflation) was enough to ensure that a pensioner continued living a decent life, where the standard of living was not greatly inferior to what they had when they were still in employment.

But towards the end of the legislature was not the time to request the introducing of a similar arrangement in Malta. However, to mitigate the bad situation the alliance was requesting that, as from January, pensioners should start getting 90 per cent of the COLA - the whole rate less the amount reduced for national insurance.

Mr Tabone complained that although the alliance requested a meeting with the minister in April, the minister did not turn up for the meeting and only sent a technical committee.

The alliance refused to meet the committee and the minister said she could only meet the alliance on July 25. The alliance wanted to meet the minister before the technical committee because political decisions were required.

He said that when the alliance pressed for straight and serious answers to its concerns, it got fluff.

Was the government afraid of consultation? It seemed it was not willing to listen dispassionately to positions of organisations such as the alliance.