Part-time income tax rate to drop from 15% to 10%.
In-work benefit to reach more families
National census on worker skills to take place
The Cost of Living Adjustment (COLA) will rise by €1.75 per week, as per the established formula. This increase will be given to all workers.
In addition, the government said that it will start meeting stakeholders to discuss a new mechanism to help vulnerable families, that works independently of the COLA in circumstances where inflation rises by a lot. The government will bear this burden.
Early next year, a national digital census on worker skills will take place, costing €2 million. This will be done in order to give a clear picture of the skills workers possess. “Our work as government, would then be to ensure that the demand for work be filled with Maltese and Gozitan workers trained for it. After this process concludes, the government will start undertaking a digitalisation audit of workplaces to be better prepared for this new challenge,” Caruana said.
A fund will also be created for industries to train workers through programmes that they create. The fund will, at first, contain €2 million. It is not excluded that this would increase if there is the need.
Several benefits were also announced for workers.
A €150 in-work benefit, per year, will be given to workers who work a-typical hours and who earn a basic wage that does not exceed €20,000. Atypical hours refers to those who work nights as well as those who work weekends and shift workers in the private sector. It will apply to workers in the following sectors: accommodation, food services, administrative and support services, manufacturing, transport and storage, wholesale and retail. The workers must have worked for at least 6 months out of the calendar year in these sectors. Around 40,000 workers will benefit.
This year the government reduced the income tax rate on overtime, where the first 100 overtime hours for those with a basic wage that did not exceed €20,000 (who were not managers), was being taxed at 15%. The government has now taken it a step further. Next year, workers with a basic wage that does not exceed €20,000 (excluding managers) will start being taxed 15% on the first €10,000 they receive from overtime. Over 30,000 workers will benefit.
The part-time income tax rate is going to drop from 15% to 10%. This measure will benefit some 23,000 workers.
The in-work benefit that is paid to parents who work and have children under the age of 23 is also going to see some improvements. The government will extend the limits and increase the rates for all beneficiaries. In the case of couples who both work, the income limit will rise from €35,000 to €50,000 a year. For couples where one parent works, the income limit will rise from €26,000 to €35,000 a year. For single parents who work, the income limit will rise from €23,000 to €35,000 a year. The minimum rates for around 7,000 families who will benefit from the increased limits will be of €200 a year. The government will also increase all existing rates by €100 per year for every child.
Tax refund increase
The tax refund that has been given by the government to workers in recent years will increase next year. The cheque amount will rise to between €60 and €140, with the highest refund given to those with the lowest income. 250,000 people will benefit, and this measure will cost €24 million.
The budget also included something for workers employed with contractors that provide work to the public sector. They will be paid double by the government for the hours they work on Sundays.
To protect vulnerable workers, a website will be created which will include templates for work contracts.
The government is also extending the free childcare service hours for those who work nights, weekends and with shifts.
The government also pledged to start a discussion within the MCESD on parental leave, so that the country will be in a position to implement the EU directive on this parental leave and work-life balance.
As regards the minimum wage, the budget reads that the minimum wage should increase in the context of businesses keeping their competitivity, and that this can be done by, on the one hand raising the minimum wage, while on the other seeing how this can be balanced out with a reduced income tax for companies. The government will discuss these issues with the MCESD and other stakeholders to find a common position that would benefit workers and businesses.