Government is short-changing pensioners out of cost-of-living increase
It is simply not true that the government is giving the full cost of living increase to pensioners. The government is only giving two-thirds of the annual COLA while paying the remaining one-third as a “bonus”. What this means is that the pension for each year increases by just two-thirds of Cola while one-third will be lost for each subsequent year!
Let’s simplify the argument. Let us say for argument’s sake that the cost of living increase is a constant €6 per week. A pensioner has €100 pension per week. So for the first year he or she receives €4 increase in his or her pension and a further €2 per week as a “bonus”. At the end of that first year, his pension amounts to €104 per week, not €106. Of course, he or she would have also received €2 per week as a “bonus”. Hence for the first year, both pensioner and employee would have pocketed the same amount in cost of living increases.
The following year the government again gives €6 as COLA. That pensioner gets €4 increase and again €2 as “bonus”. At the end of the second year the pensioner’s pension will amount to €108 per week and not €112 as it would have amounted to had he or she received the full COLA increase. Once again the pensioner would have also received €2 per week as a “bonus”, the amount comes to €110 per week in that pensioner’s pocket and not €112! This means a loss of €104 over the 12-month period.
The gap or difference between what a pensioner pockets in two-thirds COLA and one-third as a “bonus” and what an employee gets continues to increase year after year. If we take a 10-year period with a constant COLA of €6 per week we would find that for the third year the gap increases to €208. The fourth year it increases to €312 and so until we come to the end of the tenth year when the difference against pensioners rises to €936. This gives us a total of €4,680 which employees get more than pensioners just on cost of living increases for the whole ten-year period!
This proves beyond any doubt whatsoever that the Maltese and Gozitan pensioners are being short-changed each year by the government, which continues to state that it is giving the full cost of living increases to pensioners!
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