“Budget 2019 – Main Highlights

Weekly Cost of Living Increase

• The increase in the weekly cost of living for 2019 shall be of EUR 2.33 per week.

Annual Vacation Leave

• An extra day added to the annual leave to a total of 26 days per annum.

Minimum Wage Earners

• Wage increase of EUR 3 per week next year for those who were on the minimum wage in 2017.

Increase The Children’s Allowance

• Increase to EUR 96 per child is the maximum rate of Children’s allowance for those earning less than EUR 20,000 per year.

Employee Tax benefits

• Tax refunds that were granted in 2018 to all employees earning up to EUR 60,000 will also be granted.  The maximum refund is of EUR 68.

Taxation For Single Persons

• Tax free for single people who work on part-time and earning over the EUR 9,100 but less than the minimum wage

Self-Employed

• For the first time self-employed who stop their business activity and start registering for work will have the right to unemployment benefits based on their contributions.

Security Forces Personnel

• Benefits to be paid to those who suffer fatal or serious accidents that involve permanent disability that leads to disability to work.

Infirm Couples

• Medical Aid to increase by EUR5.14 per week.

Pensions

• Increase in the social security pension by EUR 2.17 per week which together with the cost of living adjustment of EUR 2.33 per week, would increase the total social security pension to a maximum of EUR 4.50 a week.
• Tax-free maximum threshold will be increased to EUR 13,434.
• New incentives for 4,500 pensioners who are still receiving a service pension amounting to EUR 200 a year in the computation of deductible taxes. A special incentive will be given to those with a Service pension and who are 72 years or older.   The 2,200 pensioners estimated to fall into this category their increase should translate into around EUR 11 extra a week.
• The EUR 300 a year to those pensioners over 75 years who are still residing independently at their homes will be kept.
• A EUR 50 a year increase will be given to those pensioners who do not have the necessary contributions paid up to qualify for a full pension.
• Pension increase at 65 for those who carry on working is now extended to the public sector subject to employee and employer agreement.
• Payments to continue for anomalies arising out of changes in the pension system.
• The “Savings Bonds 62+” introduced last year will be repeated this year and more than 6,300 new pensioners will become eligible in 2019 to invest in these bonds.
• Voluntary Occupational Pension Scheme– to benefit from a maximum of EUR 2,000 tax exemption and an increase in the tax credit from 15 percent to 25 percent on the qualifying contributions.

Disabled

• Rise in the allowance for parents of children with a disability to EUR 25 per week.
• Married persons living with an elderly will be eligible for the carer allowance
• No medical evaluation will be undertaken for the purposes of the allowance, in the case of an elderly of 85 years or over being cared for by someone living in the same house.

Independent School Tax-Exempt Fee

• Tax-exempt fees paid to independent schools to rise to EUR 1,600 for every child in kindergarten, EUR 1,900 for primary schoolchildren and EUR 2,600 for secondary school students.

Households

• Up to EUR 70 VAT Refund on water purification systems installed in the house.

Newly-weds

• Refund of wedding expenses up to a maximum of EUR 2,000, an increase of EUR 250.

VAT on Electronic Publications

• The current VAT rate on printed material, audio books, books and similar printed material supplied in CD, DVD and SD card and USB of 5% will be extended to cover books newspapers and other publications which are provided electronically.

The Purchase of Musical Instruments

• A grant which is equivalent to the VAT paid is being extended to purchases of musical instruments acquired from outside Malta.

Car Owners

• VAT refund for those who registered their new vehicle in 2008
• Extension of the Tax Exemption for buyers of electric or hybrid cars
• Extension of scrappage scheme and grant to convert vehicle to gas

 Property

• Removal of the means test on assets for those who apply for assistance but with new criteria for eligibility will apply: 1) involving gross income and 2) the rental rate does not exceed the established benchmark. Assistance range from a maximum of between EUR 3,000 and EUR 5,000 per year depending on the circumstances of the family.
• An equity sharing scheme is being introduced for those 40 and over who wish to own their residence and they can pay at least 50 percent of the purchase price of the property can apply for a loan with any interest on such bank financing being paid by the Government.
• Measures will be introduced for the upgrade and maintenance of property available for social housing.
• Extension of stamp duty reduction scheme for first-time buyers, second-time buyers and vacant property in Urban Conservation Areas, purchase of property in Gozo, as well as refunds on restoration works.

 Free Public Transport

• Extension of free public transport for those aged 16 to 20 years
• Free public transport for all full-time students over the age of 20 and for all those aged 14 and over.

Cyclists

• Are to benefit from the extension of full VAT refund for bicycles and electric bicycles
• Extension of scheme to aid to buyers of motorbikes, scooters and electric bikes for a maximum of EUR 400

The highlights of the budget have been prepared for general information purposes only and are not intended for professional advice. 

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