Malta’s ageing population is taking its toll on social benefit expenditure, with over half the money spent on social benefits going towards old age pensions, a report published by the National Statistics Office confirms.

Across the EU’s 27 member states, only Poland and Italy spend a higher percentage of their social benefit expenditure on old age.

The report found that of the €66 million rise in social benefit expenditure between 2009 and 2010, a massive 93 per cent was spent on old age related measures, including pensions.

Spending on retirement and two-thirds pensions increased from some €191 million in 2006 to €314 million just four years later, in 2010.

The report also notes how in 2009, at the height of the recession, Malta increased its social protection expenditure by almost double the EU average, with expenditure on social benefits rising by 8.1 per cent.

But despite the rapid increase in expenditure, in 2009 Malta’s social expenditure as a percentage of GDP sat almost 10 percentage points behind the EU average.

In fact, while Malta spent 19.8 per cent of its GDP on social protection in 2009, member states spent an average of 28.4 per cent, with figures varying from a high of 33.4 per cent in Latvia to just 2.3 per cent in Hungary.

The report attributes this increased spending to twin factors – declining GDP as a result of an economic downturn coupled with an increased number of people registering as unemployed.

When gauged per capita, Malta’s social protection benefit spend, at just under €4,000, sits towards the lower end of the EU scale, with Malta ninth from bottom.

Titled Social Protection: Malta and the EU, the report compares social protection expenditure across member states between 2006 and 2010. Data for 2011 is expected towards the end of this year.

Cash social benefits amount to 68.4 per cent of Maltese benefits – slightly higher than the 65.1 per cent average across EU member states. But while 11.2 per cent of member states’ average social protection was subject to means-testing, in Malta this figure was slightly higher, at 13.5 per cent.

Healthcare expenditure has also risen significantly, from €184 million in 2006 to €264 million in 2010. But while there were significant increases in spending in hospitals – from St Luke’s to Zammit Clapp, Karin Grech and Mater Dei – primary care expenditure stagnated.

In 2006, €12.7 million was dedicated to primary care, with the figure rising to €17.7 million in 2009 before slumping to €16.5 million a year later.

The report also notes an exponential increase in the amount spent – and number of tickets sold – on pensioners’ Gozo ferry subsidy over the five years analysed.

Approximately €157,000 were spent on the subsidy in 2006, with almost 54,000 tickets sold. By 2010, the amount spent had increased tenfold, to €1.1 million, while the number of tickets had risen by a factor of four, to 212,663.

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