Most people in conversation use various terms ‘retirement pension’, ‘pension’, ‘social security contributory pension’ or ‘state pension’ (pensjoni ta’ l-istat) to refer to the contributory retirement pension.
Retirement age is determined by your year of birth. You can view information related to the new pensions reform, by clicking here. The new pensions reform is quite easy to understand, sorted out in a table for ease of reference.
What is the Two-Thirds Pension? Retirement Pension or the Two-Thirds Pension? What is the difference?
This is the social security pension introduced under the reforms carried out in 1979. The two-thirds reference relates to a principle which the reforms had established: a guarantee that the pension income will be 2/3 of a Maximum Pensionable Income (MPI). When the reforms were introduced in 1979 the MPI was pegged to the highest paid government wage at the time – that of the President of Malta which was Lm6,000 or €13,800.
The Two-Thirds Pension is also referred to as an earnings-related pension. This is because your pension entitlement is directly related to the contribution you pay on your basic wage or salary and income earned.
To qualify for the:
(i) Two-Thirds pension you must have paid a minimum number of contributions: ranging from 10 to 12 years depending on your date of birth.
(ii) Full Two-Thirds pension you must have paid the required contributory history – ranging from 35 to 41 years depending on your date of birth.
To be entitled for a contributory retirement pension a person needs to satisfy the statutory conditions:
- Reached retirement age
- Worked for not less than 10 years if born prior 1962 and a minimum of 12 years if born during or after 1962.
This refers to the flat rate pension that existed before the introduction of the social security reforms in 1979 – that is they were registered under the then National Insurance Act.
The flat rates paid vary, depending on
- the average of contributions,
- the amount of service pension being received, as well as
- the status of the person (single / married / maintaining spouse / not maintaining spouse
For example: If the person is a married male whose wife is not receiving a social security pension, he is paid a married rate; same for the female, until spouse is entitled to his/her pension in his/her own name.
Below table refers to flat rates being awarded in relation to the contribution average and status.
|Married||RP rates 2021|
|Single||RP rates 2021|
It is important to note that these flat rates are awarded to persons in receipt of a service pension which when subtracted from the 2/3 of the pensionable income, is less than the applicable flat rates.