Born on and Before 1951 and Worked as an Employee (no service pension), Self-Occupied, Self-Employed

If you were born on or before 1951, you are already retired and in receipt of a Social Security Pension.  The pension income that you receive was calculated as follows:

Yearly average of the best 3 consecutive calendar years within the last 10 consecutive calendar years prior to your retirement year if you were an employed person.

For self-employed / self-occupied persons, the last 10 consecutive calendar years, prior retirement year were taken into consideration.

To qualify for a full pension you had to pay a maximum of 50 social security contributions annually for a maximum of 30 years.

• If you are in this category of pensioners, you could have continued to work (as an employee or self-employed person or self-occupied) whilst receiving your state pension.
• In case of employment beyond pension age, you needed to pay social security contributions up to 65 years of age. Such a contribution wouldn’t have been assigned to your contribution history but would have been posted as an inter-generational contribution on your part.
• Unlike social security contributions which stop being paid at 65 years of age, if employment would have been kept beyond pension age, tax would have been always due until termination of employment.

In a nutshell

We have all heard of the maximum weekly pension.

How much pension you are receiving depends upon the number of contributions paid and salary earned.

However, if you were in receipt of a salary greater than or equal to the maximum pensionable income and paid 30 years of contributions (born on or before 1951), your pension income was calculated to the Maximum Pensionable Income threshold.

Example:

Year 2008: Maximum Pensionable Income: €16,601. If salary was greater than or equal to said amount, and paid 30 years of contributions, you still received: €16,601 * (2/3)(two thirds) * (50/50)(full contribution average) / 52 (weekly) = €212.83 weekly year 2008

The Maximum Pensionable Income increases every year by the cost of living allowance. The cost of living adjustment for each year is announced in yearly Budget speech.

The Cost of living is the cost of maintaining a certain standard of living.  Cost of living increase, and in its abbreviated terms, COLA, is an amount of money, adjusted yearly by the government, to protect peoples’ living standards.  In Malta, the adjustment to the cost of living (COLA) is usually announced during the yearly national budgetary speech and comes into effect in January of the following year.  How does it work for our pensioners? Click here for more information.

Revision of pension rates are also carried out in line with collective agreements, and in absence of such salary structures, revisions are done according to the salaries being earned by the employee who would have assumed the pensioner’s responsibilities, under the same terms and conditions.