Insider Economy Widower's pension bill to go back to the House

Widower’s pension bill to go back to the House

After a ‘battle’ between the island’s legislative and executive branches before the Supreme Court, the Ministry of Labour has again tabled a bill under which only men whose wives died on or after January 1, 2018 would be eligible for a widower’s pension.

Following last minute amendments by opposition parties Akel and Edek, parliament last year passed a law granting men a widowers’ pension irrespective of when their spouse died. The President referred the law to the Supreme Court which declared it unconstitutional.

The Court’s decision was based on the grounds that the legislature took an action that brought about an increase in government spending – expanding the number of beneficiaries and thus the pay-outs.

Specifically, the cost for the Social Insurance Fund would rise from €6 million to €44 million annually.

The government had sent to the House Labour Committee an actuarial study which was carried out with the aim to ensure the viability of the Social Insurance Fund.

According to the study, to cover the widower’s pension, there should be a gradual increase of 1% in contributions to the Fund and this should be implemented in three stages. In particular, the contributions should  be as follows:

– Increase of 0.3% from 1/1/2024, that is a 0.1% increase in contributions for the employee, employer and state,

– Increase of 0.3% from 1/1/2029, that is a 0.1% increase in contributions for the employee, employer and state,

– An increase of 0.4% from 1/1/2034, which is a 0.2% increase in contributions for the employee and the employer.

Labour Ministry officials last year informed MPs that increases in Fund contributions are inevitable.

The government believes the bill will correct an unconstitutional discrimination that had been in force in previous years under which different criteria applied for women and men whose spouse had died.

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