Information about Contributory Pensions Reform

Contributory Retirement Pensions

Contributory retirement pensions can be divided into two schemes, the flat rate pensions and the two-thirds pensions.

The flat rate pensions are awarded to pensioners who also receive a service pension and to pensioners who have a low pensionable income. The two-thirds pensions are awarded to all other pensioners.

A full retirement pension requires a yearly average of at least fifty (50) contributions from 1956 or from age nineteen (19) (whichever occurs later) and/or from age eighteen (18) if born after 1958 up to the last full year prior to the year of retirement.

As per Pensions Reform Report of 2010, with effect from January 2014, the pension age has increased to sixty-one (61) years for both males and females and the accumulation of contributions for a full two-thirds pension has increased to thirty-five (35) years.

For those pensioners who were in receipt of a pension before 2006, at the time, were entitled to a one-time grant which was incorporated to the rate of pension and is still being paid for every coming year.

Statutory Pension age is as follows:

A person can opt to retire at age 61, provided he/she is not in any gainful occupation and has paid the stipulated contributions between age 18 and date of retirement as follows:

Incentives for persons keeping their employment beyond their Pension Age

This is the first step that the Government of Malta took and was initially an incentive open to workers in the private sector and self-occupation but later extended to the public service and sector as follows:

* without claiming their retirement pension at the retirement pension age

Those opting to postpone their Retirement Pension award for more than one year, will have their pension percentage increase accumulated as follows:

* without claiming their retirement pension at the retirement pension age.

The percentage pension increase is cumulative and will be paid till date of pensioner’s demise.

The percentage pension increase will be payable to all eligible persons in receipt of a Contributory Retirement Pension who satisfy the above conditions including those in receipt of the Maximum Two Thirds Pension.

The percentage increase is payable apart from other pension increases, included Cost of Living Increases.

The percentage increase is transferred in the case of a Widows Pension.

Further information

The Incentives for persons keeping their employment beyond reaching sixty-one (61) years of age or their Pension age, came into effect from 1^st January 2016 for the private sector and self-occupied persons, and with effect from 1^st January 2019 it was extended to public service/sector employees.

Therefore, a person who was eligible for a Contributory Retirement Pension at least at age sixty-one (61), but opts to claim his / her pension at least with a one year deferral, will benefit from the mentioned pension percentage increases. This increase will accumulate yearly as the pension award date is postponed. An employed person that opts to retire after their statutory pension age, needs to make an agreement with his/her employer.

Hereunder are three examples that will help in explaining this new incentive (assuming that the cost of living increase will be €1.75 weekly).

1. A person entitled to a contributory pension of €8,000 per annum (€153.84 per week) at age 61.

Therefore, if a person who is entitled to a contributory pension of €153.84 per week at age 61, continues employment till age 65 and thus claims his/her pension at age 65, would have his pension entitlement increase to €198.45 per week, a net increase of nearly €44.61 weekly.

2. A person entitled to a contributory pension of €9,500 per annum (€182.69 per week) at age 62.

Therefore, if a person who is entitled to a contributory pension of €182.69 per week at age 62, continues employment till age 65 and thus claims his/her pension at age 65, would have his /her pension entitlement increase to €2221.05 per week, a net increase of nearly €38.36 weekly.

3. A person entitled to a contributory pension of €11,500 per annum (€221.15 per week) at age 63.

Therefore, if a person who is entitled to a contributory pension of €221.15 per week at age 63 and continues employment till age 65 and thus claims his/her pension at age 65, he would have his pension entitlement increased to €251.01 per week, a net increase of nearly €29.86 weekly.​

Non-Contributory Age Pensions

Unemployed persons who are residents in Malta, over sixty (60) years of age and do not qualify for a contributory retirement pension because they do not have the minimum number of contributions paid or credited, may be entitled to a Non-Contributory Age Pension if they satisfy the capital and income means test.

Invalidity Pensions

Contributory invalidity pensions are awarded to persons who have at least paid two-hundred and fifty (250) contributions and are suffering from a medical condition which according to the medical board of the Social Security Department renders them as permanently incapable for any full-time and/or any part-time employment.

Such persons must be incapable for work (suffering from their medical condition) for at least six months prior to their claim and in continuous employment and/or registering for work on the Part 1 register held by Jobsplus for at least one (1) year.

There are eight rates of Invalidity Pension according to the yearly average of contributions paid and/or credited and the civil status of the claimant. These rates are not related to the salary earned while in employment.

Widows Pensions

Contributory widow’s pensions are awarded to widows whose spouse had paid an average of 15 contributions during their lifetime. It may also be payable in cases where the late spouse died as a result of a personal injury during the course of their duties (employment or self-occupation).

A widow’s pension is also payable in full without any deductions if widow is carrying out a full-time gainful occupation and, where a widow re-marries, a flat rate widow’s pension will be due.

Living Abroad

Maltese Citizens living in Australia/Canada/New Zealand

In order for Maltese nationals residing in Australia/Canada or New Zealand to claim a Maltese pension, they should lodge a claim through the social security institution of either country.

Maltese Citizens living in European Union Countries

In order for Maltese nationals residing in an EU country to claim a Maltese pension, they must essentially lodge a claim through the social security in their country of residence. If the persons concerned had been insured in their country of residence, they should lodge a claim through the social security of the same country. If the Maltese nationals concerned, reside in an EU country but never worked there, the application should still be lodged through the social security of the same country. The claim will then be forwarded for processing to the Social Security Department of Malta by that same country of residence.​

Maltese Citizens Residing in a Third Country

In order for Maltese nationals residing in a Third Country to claim a Maltese pension, they should lodge an application directly with the Department of Social Security. This can be done either by downloading the claim forms from the website Social Security site and sending them by post or by lodging a claim physically while on holiday in Malta. Claim forms for each type of pension can be downloaded from this website and selecting the appropriate section.​​