Migrants’ Access to Social Protection in Malta

Abstract

This chapter analyses social security benefits for migrants in Malta. Since the early years of the millennium, levels of immigration to Malta have increased sharply among both European Union (EU) nationals and third-country nationals. Malta’s accession to the EU, and its booming economy in recent years, has attracted a steadily rising number of EU nationals, while numbers of asylum seekers and other third-country nationals meeting labour shortages in Malta have also risen steadily. The chapter considers the conditions of migrants’ access to unemployment, healthcare, family benefits, pensions and guaranteed minimum resources. In the case of EU nationals, since 2004 they have been entitled to benefits on the same terms as Maltese nationals, except for social assistance which they cannot claim, at least in the first three months of their stay and the subsequent job search period. The case is more complex for third-country nationals whose eligibility differs according to whether they are long-term residents, refugees, asylum-seekers or in Malta on the basis of an employment licence. It is hoped that the recently introduced Integration Strategy may help provide a pathway to equal treatment of migrants who make Malta their home.

20.1 Overview of the Welfare System and Main Migration Features in Malta

This chapter provides an analysis of social security benefits in Malta by paying particular attention to differences in the conditions of access to five types of benefits (unemployment, health care, family benefits, pensions and guaranteed minimum resources) by different groups. Generally speaking, Malta’s welfare system has traditionally been very similar to the Southern European model, sharing many of its key characteristics such as: relatively low overall social expenditure where contributory benefits are considerably more generous than poverty relief; reliance on families as care providers, together with low female employment rates; well-protected employment coexisting however with an irregular and unprotected periphery; and a high involvement of the Catholic Church in the provision of welfare (Ferrera 1996). Similar to other Southern European states, Malta’s welfare system has evolved to promote female employment, to enable the balance of work and care responsibilities, to strengthen work incentives and include those furthest from the labour market through a variety of training and support measures. These changes have mainly been driven by Malta’s accession to the EU in 2004 and the policy convergence it has brought about. Accession has also meant the extension of the Social Security Act to EU nationals residing in Malta on the same terms as Maltese nationals. There have been numerous benefit changes in recent decades, driven by principles of non-discrimination, adequacy, sustainability and activation.

20.1.1 Main Characteristics of the National Social Security System

The introduction of the first statutory social security benefit in Malta dates back to the late nineteenth century. Other benefits were introduced in the early twentieth century, most notably through the Old Age Pensions Regulations¹ of 1948. However, it was not until 1956 that the structure of the current social security system was established. In 1956, the National Insurance Act and the National Assistance Act were passed, and the Department of Social Security² was set up. In 1987, comprehensive amendments were made that brought together the Old Age Pensions Regulations, the National Insurance Act and the National Assistance Act into one legislation – the Social Security Act.³ The Social Security Act provides for a contributory scheme and a non-contributory one. Regarding the contributory scheme, all persons who are between 16 years and pensionable age must pay a weekly contribution to this scheme, though a number of groups are exempted.⁴ The contributory scheme includes benefits such as sickness, healthcare, unemployment, injury, invalidity, retirement, maternity and widowhood. To be eligible to the non-contributory scheme, applicants must meet the conditions of a means-test. Benefits under this scheme include social assistance and children’s allowances among others.

Social security in Malta is financed through taxation and national insurance contributions by employers, employees, and self-employed/self-occupied⁵ persons. Employers and employees both pay Class One contributions that represent 10% of the employee’s basic weekly wage subject to a maximum of €45.58 in 2018, payable by both parties. Self-employed/self-occupied persons who earn more than €910 per annum pay Class Two contributions based on their annual net profit or income in the preceding year. Class two contributions represent 15% of net income, subject to a maximum of €68.37 per week, in 2018.⁶ The State contributes 50% of the combined contributions of employers and employees, and of self-employed/self-occupied persons. Long-term benefits (injury, invalidity, retirement and survivors) are financed on a ‘pay as you go’ basis. Non-contributory social assistance is funded through taxation and general revenue.

20.1.2 Migration History and Key Policy Developments

Malta has, like many other countries in Southern Europe, traditionally seen higher levels of emigration than immigration. It was not until the early years of the new millennium that levels of immigration started to rise. Malta went from being a very homogenous society to one where the free movement of EU nationals in Malta from 2004 broadly coincided with a steady inflow of asylum seekers. The main reasons for immigration to Malta are predominantly labour migration (especially among EU nationals following accession) and asylum seeking; the latter started to rise in 2003, peaking in 2008 and rising again in 2013 before dropping markedly after 2014.⁷

Figure 20.1 illustrates immigration by broad citizenship groups. A steady rise may be noted over the past decade, both in the number of persons immigrating to Malta as well as the equivalence of each annual inflow to the total population, rising from 1% in 2006 to 4.5% in 2017. Although in the first decade of the new millennium, third-country nationals (TCNs) outnumbered EU citizens, by 2015, the situation was reversed.

Fig. 20.1

Immigration to Malta, 2006–2017. (Source: National Statistics Office (2015, 2016, 2017, 2018a, b). NB: Comparable data for 2013 and 2014 not available at time of writing)

According to the Parliamentary Question Number 2527,⁸ 27,228 non-EU foreigners resided in Malta in 2017, with the three largest groups originating from Libya (13% of TCNs), Serbia (10%) and the Philippines (9%). On the other hand, JobsPlus⁹ data (based on compulsory employee registration) show that foreign workers in formal employment in Malta have risen from 3854 persons in 2002 to 44,565 persons in 2017 (equivalent to 20.2% of the employed population in Malta). Of these, 78% were EU nationals and 22% TCNs. Most non-EU foreign workers came from the Philippines and Serbia/Montenegro (both 30%), India (11%), Libya and the Russian Federation (5%), Turkey, China, Nigeria and Bosnia/Herzegovina (all 4%), and Eritrea (3%).

There is a discrepancy between the total number of third-country nationals residing in Malta according to PQ2527 (27,228 persons) and those in registered employment (9804 persons). If both sets of data are correct, it would seem that 17,424 third-country nationals residing in Malta are not in employment (or in formal employment). A good number of these may be inactive family members or students. While a degree of irregular work is believed to occur among asylum seekers, there are no estimates in this regard.

Regarding EU nationals, according to JobsPlus¹⁰ the top 10 countries of origin are Italy (28% of all EU citizens living in Malta), the UK (17%), Bulgaria (9%), Romania and Hungary (both 6%), Sweden and Germany (both 5%), Spain, Poland and France (all 4%). Immigration from these EU countries has increased steadily in recent years.

Turning to emigration, Fig. 20.2 illustrates emigration trends between 2006 and 2017. The number of Maltese nationals migrating abroad has remained quite constant in recent years. Emigration from Malta has however risen among EU nationals and third-country nationals. In 2017, total emigration was equivalent to around 2% of the total population. Data regarding the destination countries of emigrants were not available.

Fig. 20.2

Emigration from Malta, 2006 to 2017. (Source: National Statistics Office (2015, 2016, 2017, 2018a, b). NB: Comparable data for 2013 and 2014 not available at time of writing)

20.2 Migration and Social Protection in Malta

All persons, irrespective of nationality, who reside and work in Malta are obliged to pay national insurance contributions under the Social Security Act, this making them eligible for contributory benefits. The exception to this is the unemployment benefit, to which third-country nationals who are not long-term residents are not entitled (given that this benefit is contingent upon registration for work with the public employment service and they are not entitled to do so). For non-contributory benefits, persons who are legally residing in Malta may be eligible to social assistance under the conditions stipulated in the Social Security Act.

20.2.1 Unemployment

Access to unemployment benefits in Malta is regulated by the Social Security Act and the Employment and Training Services Act. Benefits are administered by the Department of Social Security¹¹ while the public employment service Jobsplus¹² is responsible for activation measures and the registration of jobseekers. There are two types of unemployment benefits. Jobseekers formerly in employment who meet the contributory and job search criteria benefit from the flat-rate unemployment benefit. In 2018, this benefit was €8.13 per day (single rate) or €12.44 per day (married rate).¹³ Jobseekers who do not meet the contributory criteria can claim unemployment assistance (the maximum weekly rate for the head of household in 2018 was €104.38 plus €8.15 per dependent household member). The special unemployment benefit (a hybrid of the contributory benefit and social assistance) is paid to insured persons who qualify for unemployment benefit and who, being heads of household and also eligible for social assistance, are paid a higher rate.

Eligibility for unemployment benefit does not depend upon prior residence in Malta, but upon meeting contributory criteria. Unemployment benefits are granted to former employees who are involuntarily unemployed, fit and available for work, and registered for work under the Part 1 register held by Jobsplus (if a jobseeker does not register for work every week, the benefit is withheld). Claimants must have paid at least 50 weeks of Class 1 contributions, of which at least 20 should have been made in the two years preceding the application. A maximum of 156 days’ benefit is paid, provided that the number of benefit days does not exceed the number of contributions previously paid.¹⁴ As for unemployment assistance, this benefit is available for individuals who are heads of household, legally residing in Malta, and registered on Part 1 of the Unemployment Register. Applicants must satisfy the capital means test and their total income must not exceed the maximum unemployment assistance rate.¹⁵

Third-country nationals are not entitled to claim unemployment benefit. This is because they are unable to register for work at the public employment service which, in turn, is a requirement for receiving unemployment benefits (unless they are permanent residents and thus able to register for work at the public employment service). Regarding unemployment assistance, only legally resident persons are entitled to apply. Third-country nationals require an employment licence to work in Malta and therefore would not be eligible to unemployment assistance, unless they are long-term residents. As for EU nationals, because unemployment assistance is a form of social assistance, it falls outside the scope of Regulation 883/2004. EU nationals are thus not entitled to social assistance for their first three months in Malta or during the subsequent job search period. This is because under Legal Notice 191/2007, Union citizens seeking to reside in Malta are to prove that they have sufficient resources to avoid becoming a burden on the Maltese social assistance system. That said, following the Judgement Brey (C-140/12), Malta examines each case on its own merits, depending on the conditions which rendered the Union citizen in need of social assistance. Regarding exportability, unemployment assistance is tied to residence and it is therefore not exportable. However, Maltese citizens residing in other EU countries can receive unemployment benefits from Malta if they have been registered before leaving with Jobsplus for at least four weeks and if they register with the public employment service of the host country (in line with Regulation 883 of 2004).

The three largest groups of non-EU nationals in Malta come from Libya, Serbia and the Philippines.¹⁶ No bilateral agreements that deal with unemployment currently exist with these countries. The three largest groups of Maltese citizens abroad reside in Australia, Canada and the United States. Although bilateral agreements do exist with Australia and Canada, these do not cover unemployment benefits.

20.2.2 Health Care

In case of sickness, access to benefits in kind and cash is regulated via different pieces of legislation including the Social Security Act, the Medical and Kindred Professions Ordinance, Hospital Fees Regulations and Health Care Fees Regulations. Malta has a universal health care system and the fourth lowest rate of unmet health need in the EU (Azzopardi Muscat et al. 2017). The healthcare expenditure in Malta exceeds the EU average, being financed through taxation and general revenue and administered by the Ministry for Health (Azzopardi Muscat et al. 2017). Services are free at the point of use for those entitled to such services. Pharmaceutical products that are needed following discharge from hospital are purchased by the patient except for those eligible to sickness assistance or free medical aid.

Eligibility to free medical aid depends upon a means-test and medical certification; all persons entitled to social assistance are also entitled to free medical aid. Emergency public healthcare is free of charge for Maltese citizens and their dependent children; EU nationals ordinarily resident in Malta; third-country nationals with an employment licence and paying social security contributions; citizens with freedom of movement in Malta or those from a country with a reciprocal health agreement; advisors and consultants to government; and students at the main post-secondary educational institutions. Other groups outside this list have to pay fees as set out in the Healthcare (Fees) Regulations. Regarding planned healthcare services, these are free of charge for Maltese and EU nationals having a certificate of entitlement under EU Regulations 883/2004 and 987/2009. Similarly, third-country nationals paying national insurance in Malta are entitled to treatment along the same lines as Maltese and EU nationals and do not have to contribute towards the cost of their treatment.

The sickness benefit is a contributory cash benefit payable to employees and self-occupied persons from the fourth day of illness, as the employer is obliged to pay the first three days. The daily rates in 2018 are €13.28 (single) or €20.51 (married).¹⁷ The benefit can last up to 156 days (or 468 days for serious illness or injury) but cannot exceed the total social security contributions paid by the employee prior to sickness. Sickness assistance is non-contributory and is payable when certain defined chronic medical conditions incur exceptional expenditures. The assistance is provided for as long as the chronic condition prevails and may be lifelong. Those with limited means are also entitled to free medical aid (colloquially known as the Pink Form), consisting of a limited number of medicines plus dental and ophthalmic services.

All employed and self-employed persons, irrespective of nationality or period of prior residence in Malta, are entitled to sickness benefits if they meet the contributory criteria. Eligible applicants must have paid at least 50 weekly contributions, out of which 20 for the last two consecutive complete contribution years before the beginning of the benefit year. Sickness assistance is means tested. The contributory sickness benefit may be exported within the EU, whereas the means-tested sickness assistance is tied to residence in Malta and cannot be exported.

Invalidity benefits are contributory benefits payable to persons who are certified incapable of suitable full-time or regular part-time employment due to serious disease or impairment. Claimants must be under retirement age; have been in continuous employment or Part 1 registration for at least 12 months preceding application; certified incapable of suitable employment by a medical panel; and have at least 250 paid weekly contributions with an average of at least 20 contributions per year since the age of 18. Accreditation for missing periods is possible in some cases, but unemployment periods for third-country nationals are not taken into consideration for accreditation purposes (unlike in the case of Maltese and EU nationals for which unemployment periods can be accredited for contributory record purposes). The invalidity benefit is exportable worldwide.

No bilateral agreements that deal with health-related benefits currently exist with the three largest countries of origin of TCNs residing in Malta (Libya, Serbia, and the Philippines). From the countries that represent the three most relevant destinations of Maltese citizens abroad, bilateral agreements exist with Australia and Canada, and both include invalidity pensions, which allow for a pro-rata invalidity pension from Malta according to the number of contributions paid in Malta out of their total working life in Malta and Australia/Canada. However, these agreements do not cover sickness benefits in kind or in cash.

20.2.3 Pensions

Pensions in Malta are regulated by the Social Security Act and the Pensions Ordinance. The main pension is the contributory retirement pension which has two forms: (a) the ‘two-thirds pension’ and (b) the flat-rate pension. The ‘two-thirds pension’ is a defined-benefit scheme with a minimum and maximum rate depending on the average of contributions paid and applicant’s pensionable income.¹⁸ The scheme is financed by contributions on a pay-as-you-go (PAYG) basis and covers employees and self-employed/self-occupied persons. The flat-rate pension is for persons who have low pensionable income or who also receive a service pension. There is also a means-tested non-contributory age pension.

Following the 2006 reforms, pensionable ages were increased, reaching 62 for those born between 1952 and 1955 and 65 for those born on or after 1962. Applicants must satisfy the contributions test: having paid (or been accredited) a yearly average of at least 50 contributions from 1956 or from age 19, and/or from age 18 if born after 1958 up to the last full year prior to retirement. Thus, a person retiring in 2018 would have had to pay 1820 weekly contributions. The minimum period of contribution required is 10 years for those born before 1962 (12 years if born thereafter); the period required for a maximum pension is now 40 years. Accreditation is possible for periods of sickness, widowhood, invalidity, unemployment, injury, child-raising, study, work in the Police or Armed Forces, Civil Protection, carers and voluntary workers. Single inactive nationals may join the contributory pension on a voluntary basis. Retrospective contributions are also possible for specific cases,¹⁹ but they cannot be made for periods when applicants were not in Malta.

As noted, unemployed residents who are over 60 and do not qualify for a contributory retirement pension may be entitled to a non-contributory pension if they satisfy the means test. Capital resources must not exceed €23,300 for a married couple or €14,000²⁰ in other cases. Applicants’ weekly means must not exceed the highest rate of age pension. The contributory pension does not differentiate on the basis of nationality. Regulation 1408/71 means that pension contributions paid in any EU country are taken into consideration when calculating the contributory pension in Malta.

Contributory pensions may be exported worldwide. As for non-contributory pensions, EU citizens normally residing in Malta are entitled to apply. Third-country nationals are not, unless they are long-term residents. Moreover, non-contributory pensions are not exportable. As for the coverage of old-age pensions in bilateral agreements, according to the agreement with Australia, any residence in Australia is deemed to be a period of contribution in Malta and vice-versa. Similar provisions apply to Maltese living in Canada and New Zealand, and vice-versa.

20.2.4 Family Benefits

Family benefits are regulated by the Social Security Act and the Employment and Industrial Relations Act. They are financed through taxation and general revenue. While families are supported in various other ways (for instance, through the tax mechanism and through free or subsidised childcare), this section focuses on the maternity benefit, the maternity leave benefit, and children’s allowances (there are no specific schemes for paternity or parental benefits in Malta).

Maternity benefit is payable to any pregnant woman ordinarily resident in Malta who is not in employment or is self-occupied. This benefit is of a maximum of 14 weeks, out of which 8 weeks before birth. The weekly rates in 2018 were of €172.51 for a self-occupied woman, and €92.02 for a woman not in employment.²¹ The maternity leave benefit is paid by the State for four weeks to women in employment, following the 14 weeks of paid maternity leave paid by the employer. The maternity benefit and the maternity leave benefit are non-contributory and are neither means-tested nor earnings-related. The children allowance is payable to parents who have the custody of dependent children up to the age of 16 (or 21 if in education or first-time jobseekers). Children’s allowance is non-contributory, means-tested, and it depends on family income. In 2018, the allowance ranged between €8.66 and €22.23 per week.²²

Eligibility to family benefits such as maternity benefits and children’s allowance is based on ordinary residence in Malta, rather than nationality. Information on the website of the Department of Social Security ties eligibility to being either citizens of Malta or EU nationals; or married to/cohabiting with a citizen of Malta; or citizens of a country that is party to the European Social Charter; or have refugee status.²³ However, the Department has clarified that all eligible residents in Malta are entitled to apply for these family benefits, this also being reflected in the EU’s 2018 publication Your Social Security Rights in Malta. National citizens living abroad cannot claim these benefits from Malta. In the case of children’s allowance, the child must be ordinarily resident in Malta, and the recipient must have the care and custody of the child. Current bilateral agreements do not cover family-related benefits.

20.2.5 Guaranteed Minimum Resources

Malta does not have a general guaranteed minimum resources scheme. While it does have a social assistance scheme generally thought of as a ‘safety-net’, this is a categorical scheme based on double conditionality: (i) ex ante, applicants must be legally and ordinarily resident and belong to any of the following categories: being incapable of work due to medical reasons; or having the sole care and custody of children; or caring for a spouse who is critically ill; and (ii) an ex post work restriction (see Slack and Ulph 2017).

20.3 Conclusions

Malta is currently enjoying strong economic growth with high employment and record low unemployment levels. Labour shortages currently attract more policy and public attention than does access to benefits. Although a small minority do, on occasion, publicly express concern over the effect of non-nationals on the welfare system, this has typically related to asylum seekers and not to EU nationals or third-country nationals who work and live in Malta on the basis of an employment licence.

As explained in this chapter, access to contributory benefits does not differentiate on grounds of nationality. If applicants meet contributory requirements, they are eligible to benefit under the respective schemes. Moreover, contributory benefits are exportable. An exception to this, however, relates to the access of third-country nationals who, having worked and paid social security contributions in Malta, are not entitled to unemployment benefits (unless they hold the status of long-term residents). This is because third-country nationals are only entitled to reside in Malta on the basis of an employment licence for a specific position (that cannot be filled by a Maltese or other EU national); once this employment ends, they are not entitled to seek other work in Malta. Thus, being unable to register for work at the public employment service (which is necessary for entitlement to unemployment benefit), third-country nationals cannot avail of this benefit.

Unlike contributory benefits, access to non-contributory benefits is not as universal. In the case of family-related benefits, both Maltese and EU nationals (if ordinarily resident in Malta) are entitled. There is less certainty, at least in official documentation, regarding third-country nationals. While the Departmental website states that only those third-country nationals who are married to/cohabit with a Maltese citizen, or who are long-term residents, or have refugee status or come from a country covered by the European Social Charter are eligible to maternity and child benefits, in practice, it appears that all ordinary residents in Malta are eligible if they meet the relevant criteria. This may prove somewhat misleading to potential non-EU applicants who do not feature in the ‘eligibility’ list.

Access to unemployment assistance is also limited. It is based on a test of need and tied to ordinary residence. By definition, those third-country nationals only entitled to reside in Malta on the basis of an employment licence (and who therefore have income from employment) are not entitled to unemployment assistance, although TCNs who hold a long-term residence permit do qualify. Neither are EU nationals entitled to apply for unemployment assistance in the first few months of their stay in Malta, as is the case in most EU member states wishing to discourage ‘welfare tourism’. However, when EU nationals establish a link with Malta, and become ordinarily resident here, their application for unemployment assistance is considered on its own merits and with reference to the reason for such need.

Overall, the pace and extent of immigration has been unprecedented in recent Maltese history and occurred at a time of rapid social change and far more secular lifestyles. Some have expressed concern over the impact of rising immigration on the ‘national identity’ of an increasingly cosmopolitan Malta; there have also been a few who have made third-country nationals the target of their discontent. This however co-exists with the activities of a vigorous and unstinting group of NGOs who campaign for migrants’ rights and support them on various fronts. The long-delayed introduction of an Integration Strategy, which was finally published in December 2017,²⁴ formalised the integration policy infrastructure in Malta and launched the integration process which includes two-stage training in Maltese, English and cultural orientation, casework and cultural mediation and awareness raising, among other initiatives.

To conclude, the overall picture regarding the link between migration and welfare in Malta is mixed. While EU migrants enjoy the same contributory entitlements as Maltese, entitlement to social assistance is less clear and levels are meagre especially in the light of sharply rising housing costs. However, this is also true for eligible Maltese nationals in a context, as explained earlier on, where effort is made to ensure that contributory benefits do not undermine the ‘make-work-pay’ principle (and therefore remain below a rather low minimum wage), and that non-contributory benefits remain lower than contributory ones – reflecting less perceived ‘merit’ but certainly not lesser need.

Perhaps the most apt characterisation of Malta’s evolving approach to the social rights of third-country nationals can be found in the taxonomy outlined by Dean (2011). Malta seems to have moved, over the years, from Dean’s moral-authoritarian stance (only allowing migrants in if they provide material benefit; excluding them from citizenship and cultural life; and only meeting minimum welfare requirements to comply with legal obligations) to a social-conservative stance which is more “capable of compassion for migrants, but does not recognise their right to belong: this favours protective (albeit measured) welfare provision” (2011, p. 25). One hope for the future is that the new Integration Strategy may prove a feasible pathway to permanent residence for those migrants who have made Malta their home, and that nationality should no longer be a factor in their entitlement to benefits.