The Government intends to continue discussing the possibility of further reforms in pensions although no concrete measures were announced.

There is also the intention to introduce a third pillar pension – a voluntary extra pension – though this will only be done when ongoing consultations are concluded.

An evaluation will also be carried out to address the pension situation of those who were performing duties with government departments before 1979 but were employed directly with the government after 1979.

According to the Government, in the future it will also be studying other anomalies.

The previous administration had introduced a substantial pension reform programme in 2006, with the gradual increase of the retirement age from 61 to 65 over a long-term period.

The EU has consistently called for a faster pace of this reform including the need to accelerate the introduction of the retirement age. The EU had also suggested that the retirement age should be indexed against life expectancy; however, both major political parties have turned down this suggestion.

Service pensioners – who have been insisting for a full refund of their deducted pension for decades – will move another step forward although they will not be getting what they were hoping for.

Prof. Scicluna said the amount of service pension not taken into consideration for social security pension assessment purposes is €1,266.

As from next year, this amount will increase by a further €200, which according to the Government will affect 5,500 pensioners.

There is also a commitment to continue giving a full pension to those who choose to carry on working beyond retirement age.

In addition, the Government is studying ways for women without sufficient pension contributions to be able to buy back years to be able to retire on a minimum pension.

Widow’s pension entitlement to be reformed

Working widows earning more than the minimum wage will no longer lose their widows’ pension entitlement once their children turn 21, as is currently the case.

According to the Budget, the children’s age capping as well as the wage/salary capping will be removed so that those falling within this category will continue to receive a full widows’ pension irrespective of their earnings from employment or self-employment and also of their children’s age.

The Government said through this measure, widows will be incentivised to keep on working without losing any benefits.