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How much should I be spending on WANTS – the fun stuff?

ĠEMMA understands that you need to spend money on yourself and enjoy life.  The ĠEMMA message is that you should spend money wisely.   Knowing what your limit is and making sure you can afford your WANTS is important.  One easy rule of thumb you may wish to follow is “50-30-20” rule for needs, wants and…

I have paid social security contributions for four years in the UK. Will these contributions be taken into account when my pension is calculated?

If enough contributions are paid in Malta to qualify for a Retirement Pension, contributions paid in the UK are not utilised. It will be more beneficial for the pensioner as the pension rate will not be calculated on a pro-rata basis. If these contributions are needed so that you: accumulate the amount of contributions needed…

How much money should I save in my rainy day fund?

At ĠEMMA we believe you should put aside at least 3 months of your monthly disposable income – that is your income after you deduct your taxes and social security contribution.  It may take you time to get to this financial goal – but it is worth it.  If you can target a 6 month…

I am a pensioner working part time. Am I entitled to the statutory bonus?

First and foremost, in Malta the government bonuses, also known as statutory bonuses are mandatory and are quarterly payments made by the employer to the employee. For retirees working on a full-time basis, the onus of payment of full bonuses is on the employer. No bonus is issued by Department of Social Security for full-time…

Check FS3 – the one that shows the total amount of benefits I received from the Department? My calculations show a different amount.

The FS3 is issued by the Department, usually around April, and is a document showing the total amount of benefits received from the Department of Social Security for the year preceding current year, for example from 01/01/2018 to 31/12/2018, in accordance with the Social Security Act. The FS3 is presented at the Inland Revenue Department…

I am 59 (in 2020) and have accumulated the necessary years of contributions (35 years). I wish to terminate work now at 59 years of age and claim for a pension at 61. Will these two years of missing social security contributions change my pension rate?

If you are 59, you have been born during the year 1961. Accumulation of social security contributions is indeed 35 years but calculation period for employed persons is based on the best 3 consecutive years in the last 13 years. Calculation period for self-employed persons is based on the best 10 consecutive years in the…

Does a negative credit history exist? Can it affect my ability to get a loan?

Yes and yes, it will.  Let’s say, at 17 years of age you purchase a mobile for €500 and you get a loan from a bank to do this.  You pay off €250 and decide not to pay the rest.  The bank will list you as a defaulting client. What does this mean? For sure, you…

Are disability and invalidity the same?

The Social Security Act does not treat a Disability and an Invalidity in the same manner, in that a disability allowance is a non-contributory allowance. Three rates apply with the second and third rate being paid by the Department even if disabled person is in employment. An invalidity pension is a contributory benefit which prohibits…

How can I stick to my budget?

To have a budget plan that works for you, you must stick to it.  First you must understand how your money is being spent.  By tracking your spending, you will see where your money is going.  Once you do this, you will be in a better position to go through your expenses and make decisions of where you really want your money to go…

What should I do if I am not able to pay off my monthly mortgage on my home?

Speak to your bank immediately.  The bank will work out with you how best to continue to pay off your home loan – including a rescheduling of the loan payments.  Remember it is in the bank’s interest that you pay off your loan.  The worst thing that you can do is not speaking to the…

Are budgeting and planning the same?

The word “budget” can make us feel like our hands are tied, so it’s better to think of it as a plan for spending. First up is to see whether you are spending more or less than you’ve got coming in. If you’ve got a surplus, you can funnel your extra money towards what you…

Should I save or clear debt?

You have some spare €s in hand – what should you do with it? Invest it in something that would give you the highest return. You can pay off part of your debt given the very low interest rates on bank accounts today – focus on those loans or credits with the highest interest rates.  First, however, set up a Rainy Day…

What should i do when i dip into my rainy day fund?

Start replacing the money you had to take from your rainy day fund to see you through the disaster.  Don’t stop until you top it up again – whether its the minimum 3 months we recommend, or ideally the 6 month target.

How does interest on a debt work?

When you borrow money, it does not come for free – you need to pay back a percentage of the loan amount.  This is called interest.  This is how the bank makes money. An interest rate accumulates over time and it will add up to a large amount over the life time of the loan.   It is very important that when you are paying the loan you pay…

What should I budget for?

Your goals!  A budget is simply a plan to channel your money towards your needs, and that you afford your wants.  Budgeting helps for many reasons: you do not spend more than you earn, you plan / pay your bills, you plan ahead to make your ends meet, and more. Keep in mind one important thing:  ideally…

Where to put savings right now

It actually depends on your plans, the money you are willing to put aside and how soon you want to use it. An excellent saving opportunity today is investing in a personal pension product.  In investing in this product you will also receive a tax credit.  This is an excellent return. Furthermore, when you access…

What should I do if I have too much debt?

There are four simple rules that you should follow: make sure you first pay the debt on your essentials – the mortgage on your home first; make sure you pay the debt with the highest interest rate and Annual Percentage Rate; avoid taking on more debt; and see whether you can increase your income so…

How do I budget for a baby?

Congratulations! Making a spending plan for when baby arrives is about budgeting for reduced income, and for the additional expenses that come along, like baby stuff you need to buy. We suggest you use the ĠEMMA Baby Planner to work out what you need to spend in preparing for the baby and once you have…

Where should I store my rainy day fund?

Definitely in a separate account, but one you can get to within 24 hours. An online savings account (preferably earning a bit of interest) will do just fine, but perhaps with a different bank to keep it ring-fenced from your other everyday spending. This is not money to invest, it’s money for insurance – ‘self-insurance’…

How is the maximum pension rate calculated?

You have all heard of the maximum weekly pension, which, for year 2019, stood at €237.97 and for year 2020 increased to €243.81. Following the 2007 pension reforms, there are in place two Maximum Pension Income caps. These are: • If you are born between 1952 and 1961 the Maximum Pensionable Income cap was €18,562…

What if I can’t afford this?

If money’s tight and it feels like this is out of reach, you probably need a rainy day fund even more. When the unexpected happens, having this safety net will be that much more of a relief. Start by selling anything you don’t need or taking on a part-time job to earn money, or cut…

What is the percentage increase measure?

It is a top-up pegged to the postponement of pension beyond the age of 61 provided that the pensioner was eligible to claim for a pension at least one year prior to his/ her pension age but continued to work. Measure came into effect in 2016. Until 2018, incentive was only applicable to private sector…

What is the quickest way to pay off debt?

If you have a bunch of loans on the go, focus on tackling one at a time. Pay more towards your highest-interest debt – the one that costs the most – and make minimum repayments on the rest. That’s the cheapest and quickest way out. But if you need a little extra momentum and motivation,…

My credit card balance is exhausted, no money left and still a week ago to receive my salary. Shall I go to a usury to be bridge the gap?

No.  Avoid a usury like the plague.  Usury involves lending money at very high and unreasonable interest rates.  You risk the danger that your loan snowballs if you fail to pay on time.  Usuries can place significant pressure on you to make sure that you pay.  If you are in this position – go to somebody you can trust:  a…

How is my pension calculated?

Pension calculation depends on your year of birth. 1. If you are born between 1956 and 1958 Pension age 63 Accumulation 35 years employed: best 3 consecutive years in the last 12 years self-employed: best 10 consecutive calendar years in the last 12 years 2. If you are born between 1959 and 1961 Pension age…

Would you kindly revise my pension rate according to the latest budget measures?

Various budget measures are in place that affect pension, allowing pensioners to increase their annual pension income. Age 65 Contributions paid after the original pension issue date, up to age 65 are considered thus increase the contribution average, hence better the pension rate. % increase measure Top-Up pegged to the Postponement of Pension beyond the…

I kindly request a revision of my pension rate according to the salary structure of my last employment.

Revisions to a pension income are also carried out to take into account latest negotiated agreements, also referred to as collective agreements. Over a period of time, companies revise their collective agreements to improve their employees’ wages and working conditions. Collective agreements not only provide better wages, benefits and working conditions to their employees but…

How do I start a budget?

The first step is to add up your incomings – whatever money you have coming in. Next up is your spending, including regular and irregular expenses. To build your budget, it needs to be as accurate as possible and reflect the way you normally spend your money. This makes it easy to see how your…

I would like to have my pension payment in cheque.

If there is no garnishee order, in other words, sekwestru, the Department of Social Security cannot change payment method to cheque and pension payments are deposited into the relative bank account.

Why do I need a budget?

A budget is a plan for your spending – it helps you in making sure you spend on your ‘needs’ – those items that are essential to you and your family’s well being. It is easy to fritter your income on things that you do not really need – ‘wants’ – a bit here, a…

I am self-employed – am I entitled to the twice annual bonuses and other short term benefits falling under the social security contributory system

Persons who earn income from trade, business, profession, vocation and persons who receive income from rents, investments, capital gains or any other passive income do not have an income package that consists of allowances, overtime, performance bonuses and statutory bonuses. However, pensioners who choose to remain in self-employed work after claiming a pension receive the…

Which benefits am I entitled to?

Find My Benefits – click here Online Applications – click here

Do I pay down debt first or get a Rainy Day Fund going?

Set up your Rainy Day Fund first.  Target a fund that has, at least, €1,000.  This gives you a safety cushion to tackle unexpected expenditure without having to re-think your budget or have to dip into your credit card or get a loan.  When you use your Rainy Day Fund make sure that you replenish…

Which loans have interest?

Bankers make money from loans through the interest you pay on such a loan.  All debt, including credit card debt, includes interest charges.  Typically, the most expensive loans are credit cards, personal loans, car loans and mortgages (in this order).  Borrowing may seem achievable at first, helping you acquire things sooner than later, but pay attention for…

Wait, wouldn’t it be better to pay off debt first?

You could, but when something unexpected happens – and it will! – without a rainy day fund you’d have to run up your debt all over again. Plan for an emergency and put funds away.  This way when something goes unexpectedly wrong you have reserves to fall back on without having to bust your budget…

Why should I plan my spending?

Using a budget to plan your spending and sticking to it not only helps make ends meet, but it enables you to reach your goals for the short, medium and long term. Money is required to acquire many things in life and this action entails saving if you want to avoid too much debt.  Plan within your budget the €s you wish…

How much debt is too much?

There is a simple rule of thumb equation that you can use to establish the level of debt that you can afford.  Sum up all your monthly income and deduct all your monthly expenses.  Divide the result by the debt you hold – loans and credit card balances to be included.  If your debt level is between…

Where can I get a social security contributions statement?

A social security contribution history sheet can be easily obtained from your nearby district office. Click here to get a list of the district offices. You can also request your employment history sheet from JOBs+ and compare your contributions paid against your employment history. To facilitate matters, in case you have missing contributions, you can…

How do I pay down debt if I live payday to payday?

What can help most is a budget, a buffer and a strategy. A budget is really just a plan for your spending – it’s a big help when you’re directing your money towards a goal like being debt-free. But even before you tackle your debt, it helps to have a rainy day fund first. That…

What would my pension be at the age of 61 and what difference does it make if I retire at 64?

You can request from the Department of Social Security a forecast of the pension income you may be entitled to at different retirement ages. Click here to contact the Department of Social Security or call 153 – servizz.gov.mt to request a tentative assessment. You will then receive a formal response from the Department of Social…

Who should make a spending plan?

Everyone, anyone! Budgets allow you to manage your money better – money coming in and money going out.  A budget helps anyone feel in control, instead of wondering <where has all my money gone>.

My husband and I both work and we will both be eligible for a pension. How will this affect us?

In the case of a married couple eligible both for a pension having satisfied the relevant contribution conditions stipulated under the Maltese legislation, each of the spouses may claim for the retirement pension on his/her own. Neither pension will stop when either spouse retires because the calculations are based on two main computations depending on…

How much can I put away from each pay to save?

You can build your rainy day fund by setting aside an amount immediately on receiving your pay.  Choose a regular amount to save that works for you.

What loans do I qualify for?

Banks make money when borrowers repay their loans regularly.  Therefore, when you apply for a loan, they look at your ability to repay.  They assess whether you are a good client by looking at your income and credit score (hence, did you pay other loans in the past?).  Banks follow similar standards but they may have different amounts…

Are loans good?

It depends on what you are going to use them for.  Ideally you should obtain a loan for things that will add in value such as for the home or education.  Be that as it may, make sure that when you get a loan you can afford to pay the monthly payments.  If you start missing out on payments…