Think tank calls for debate, reform of social security system

A think tank report on the sustainability of Malta's social security system has called for a reduction of unnecessary dependence on social security, effectiveness in the provision of personalised services and greater inter-action between the public, NGOs and the private sector. It also called for public debate on the subject.

The report was prepared by the Today Public Policy Institute. The study group was led by Joseph FX Zahra.

It says that, given its questionable financial sustainability and affordability, Malta's social security system stands to benefit from a wide-ranging reform.

Despite the gab between contributions and expenditure, the current system's sustainability is ensured through the injection of funds derived from other sources of government revenue, amounting to 50 percent of the total contributions collected throughout the year. A surplus of funds is no longer expected betyond 2011/2012 and by 2015 there would be a shortfall of funds of €191 million.

In the year 2000, outlay on the two-thirds pension was equivalent to 24 percent of the funds from social security contributions. By 2015 expenditure on the two-thirds pension wil be equivalent to 81 percent of funds generated by social security contributions, or 54 percent of total funds.

The report was presented to the Prime Minister earlier this week.