An exercise carried out by TheJournal.mt sheds light on how Budget 2022 has affected the income of Maltese and Gozitan households. For the purpose of this exercise we took 4 different types of families and calculated how direct benefits and tax reductions will affect their income.
Couple 1: Pensioners George & Maria – Total €1,100
The first couple is George and Maria, two pensioners aged over 80 who reside in their home and who depend on their income on the minimum pension earned by George. As a result of Budget 2022, this couple was awarded a €260 increase in their pension. Their senior citizen grant was increased by €50 for each of them. Maria, who does not qualify for a pension despite having paid some contributions, will get an increase in her bonus of €150. To top this all, their supplementary allowance will rise by nearly €600. All in all, an increase of €1,100, or 12% of their previous income. This follows increases of over €2,500 in the previous four budgets, meaning that in a single legislature this pensioner couple will have experienced an increase in income of more than €3,600, or a rise of over 50% in their income in 2017.
Couple 2: Pensioners Mario & Josephine – Total €1,600
Consider another pensioner couple, Mario and Josephine. They depend on Mario’s maximum pension and his additional non-pension income of a few thousand euro and have employed a live-in carer after the launch of the Government’s subsidy scheme. Budget 2022 improves the subsidy for live-in carer by €1,000 and raises their pension income by €260. They will get an increase of their senior citizen grant of €100. The changes in the tax regime mean that their tax bill will be nearly €300 lower than before. All in all, an increase of €1,600, or 9% of their previous income. This follows increases of over €3,300 in the previous four budgets, meaning that in a single legislature this pensioner couple will have experienced an increase in income of nearly €5,000, or a rise of over 35% in their income in 2017.
Couple 3: Mark and Ritienne – Total €450
Let us now focus on working-age families. Mark and Ritienne both earn the minimum wage and have two children. Budget 2022 means that they will get an increase in their in-work benefit of €140, tax refunds of €120 and an increase due to the cost-of-living allowance. All in all, an increase of nearly €450, or 2% of their previous income. This follows increases of over €3,000 in the previous four budgets, meaning that in a single legislature this couple will have experienced an increase in income of nearly €3,500, or a rise of over 20% in their income in 2017.
Couple 4: John and Matthew – Total €600
Finally consider John and Matthew, a middle-class family with one child. Budget 2022 results in them qualifying for the in-work benefit, grants them more tax refunds and raises their wage through the cost-of-living-allowance. All in all, an increase of nearly €600, or 2% of their previous income. This follows increases of over €3,000 in the previous four budgets, meaning that in a single legislature this couple will have experienced an increase in income of €3,900, or a rise of over 15% in their income in 2017.
In a single legislature these 4 different types of families will have seen increases ranging from 15% to 50%, with those with the lowest income getting the highest percentage increases. This is testament to the progressive nature of this second legislature of Labour Government.
