Edgar Wadge, Tarxien
Pensioners suffering from discrimination
With reference to the article titled Brussels Deems Service Pensions Deduction Illegal (December 15) and the contribution by the chairman of the Alliance of Pensioners’ Organisations titled Brussels Probe Into Pensions Fraud (December 18), there is yet another category of pensioners suffering discrimination, namely, persons receiving a pension not payable by the UK government. May I therefore offer some further information and comments on the subject.
An illustration of the discrimination existing against certain categories of pensioners is found in the 12th schedule to the Social Security Act (Chapter 318). That schedule specifies the full rates of retirement pension per week payable to two categories of pensioners, which rates were last revised by Legal Notice 437/2010.
The schedule distinguishes between “persons who are also in receipt of a service pension that is payable by or on behalf of the Government of the United Kingdom” and “persons who are also in receipt of a service pension that is not payable by or on behalf of the Government of the United Kingdom”.
The first category receives per week €102.80 (married) and €82.56 (single) while the second category receives €97.07 (married) and €79.95 (single). Both categories are discriminated against in relation to other persons not in receipt of a service pension. Since social security pensions are related to mandatory contributions, they should apply universally irrespective of any extraneous factors.
As part of the present pensions reform, mention is made of second- and third-pillar contributions. Would the government on some future date suddenly decide to legislate that persons who will have contributed extensively to these two pillars need not receive the full rate of the first pillar pension because of the comfortable extra pension deriving from the other two pillars?
This may perhaps be described as scaremongering but this is exactly what happened in 1979. After the introduction of the National Insurance Act in 1956, persons in receipt of a service pension received also the full rate of pension applicable under the NI Act. In 1979, the NI rate was frozen at the then applicable rate of Lm12.10 a week in the case of persons in receipt of a pension from another source.
In 1987 and thereafter, the anomaly was partially rectified. However, as indicated above, the 12th schedule perpetuates the discrimination and, in the case of the second category (pensions not paid by the UK government), the discrimination is greater and was even greater before 1993. The government then started to close the gap between the two categories in the 12th schedule and continued to do so in 1994 (as announced on page 70 of the Budget speech, 1994) but, unfortunately, the exercise was discontinued after that year (probably through an administrative oversight).
The second category of pensioners in the said schedule includes not only ex-Maltese government civil servants and persons in receipt of a pension from a private entity but also persons in receipt of a pension payable by a government other than that of the UK. Any decision by Brussels with regard to the petition before it will undoubtedly be extended to the other categories suffering the discrimination. The Minister of Finance would do well to take this probability into account.
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joseph grech B'kara
Dec 28th 2010, 19:13
Mr S. Cassar fails to see the point. Stipends are awarded on a "something for nothing" basis. Pensions on the other hand are dear on the basis of 10% of salary on the part of the employee and 10% on the part of the employer. Very extravagant.
But this is beside the point. A service pension is part of the worker's contract. No more no less.
C Cassar
Dec 29th 2010, 03:16
Whether it's part of a contract or not, if the money is not there the contract needs to be receded. If not who will pay the shortfall??
J S Borg
Dec 28th 2010, 18:21
Originally the NI contribution were strictly meant for medical benefits and pension fund. It was never in the red. I remember when my father died very young mother never received any pension but it was the minor brothers and sisters who received some benefits. Then some bright politician/s realised that using the NI fund one could buy lot of votes, so, children allowances were started, allowances to unmarried mothers so on and so forth. Then other politicians from both sides followed.
Steven Brockwell
Dec 28th 2010, 17:15
we are all being discimanated ,so what. its normal with gonzi
joseph grech B'kara
Dec 28th 2010, 14:08
Mr Wadge has covered the subject cover to cover.What is basically needed is a LABOUR AND PENSIONS DEPARTMENT. This would have to take all manner of pensioning under its wing:NI and service pensions coming from wherever. As things stand if Cetta decides to get pregnant at Paceville the minister would dig deep into the NI kitty and provide Cetta with a pension on "father unknown" grounds. Cetta should be subsidised via taxation (and given a job) and not through the NI kitty. Such a department would then set the percentage NI contribution required to address past injustices accruing since May 1st 2004. Future pensioning would then be assigned in one-one correspondence on the basis that you pay for what you (will) get and get what you pay for (when you retire). The argument that 4 workers pay in order to prop one pensioner does not hold water. Children's allowance should be given to one and all provided that for tax purposes this would be regarded as an income. And stipends? there was a time when 800 young people received a stipend. The number is now said to be 10 000. Stipends are now unsustainable.
C Cassar
Dec 28th 2010, 15:28
"Stipends are now unsustainable." so are all final salary pensions which should be stopped immediately and rolled back retrospectively.
C Cassar
Dec 28th 2010, 11:52
The thing is, most of those drawing a pension haven't put in enough contributions throughout their working lives to meet their monthly claims. Where do you think the money is coming from to meet their shortfall? Yes, that's right, those that are working today who will end up without any state pension when they retire. The older generations are so considerate for everyone else that they don't blink an eye when they're effectively stealing money from the current working population.
I'm not saying that people shouldn't have a pension, quite the opposite. However, that pensionable income must only come from their contributions during their working lives, no more and no less. All the final salary pensions are a scandal because all they do is rob those that are working today who won't have such a scheme to fall back on.
l.theuma
Dec 28th 2010, 10:57
In the Bible we read: "Justice look down from Heaven".
But an old saying goes on: "Seeing things as they lie, it turned back".
Joe Spiteri
Dec 28th 2010, 09:53
MP's, remove the discrimination that has been brought to your attention many times about the pension being dependent on the year you were born and the blatant discrimination that you get a two-thirds pension of the current salary while we have our pensions capped. You also get your pension if you are elected twice while we have to work for thirty to forty years. Either you give us the pension under the same conditions that you get yours or you can forget our families votes.