The Department of Social Security is responsible for the administration of Social Security Legislation which provides for the payment of benefits under two schemes: a contributory scheme and a non-contributory scheme.
The entire population is in some way recipient of such benefits, and the Department is mainly involved in ensuring that financial support is given to those sections of the community who are mostly in need, namely the poor, the sick, the elderly and the unemployed.
The continuous rise in Social Security rates was further sustained
by Act XXVII of 1996 bringing about various amendments to the Social Security
Act (Cap 318) and paving the way for total expenditure on Social Security
in 1996 to exceed Lm139 million. This rising trend was also reflected in
the ever-increasing number of claims received by the Department throughout
1996.
A. LEGISLATION
The Amending Act of 1996 mainly provided for the increases in the rates of Social Security benefits and contributions as had previously been announced in the Budget Speech for 1996. Although a substantial part of these increases was linked to the Lm2 general increase in wages awarded by Government, the introduction of other measures also lent a hand in awarding further increases in some cases:
the scale rate of means governing the Free Medical Aids, where the head of household is in insurable employment or self-occupied, was further raised to Lm34.38 weekly in the case of one person only;
an Additional Bonus of Lm1.34 per week is being paid to all pensioners and those households in receipt of Social Assistance;
although the rates of contribution remained static (i.e. 1/10th for employers and 1/12th for the employees of the basic wage/salary that is payable to the employee concerned), the revenue per contribution increased proportionately in line with the cost of living increase award in wages; and
likewise, the rates of contributions payable by the self-employed showed an increase of 35c per week.
B. CONTRIBUTORY SCHEME
Contributions and Enforcement
2. The total revenue collected during 1996 in terms of the Social
Security Act, (Cap 318) amounted to Lm126,172,744 as compared to Lm110,788,366
in respect of the previous year. These figures are broken down in detail
in the immediately following table below.
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| Class I Contributions in respect of Private
Industry
Class I Contributions in respect of Government Employees Class II Contributions by Self-Employed persons Further Contributions (penalties) in terms of Sec. 116 of the Act State Contribution |
45,058,985
21,111,878
7,444,657
365,086
36,807,760
|
51,685,141
23,051,427
8,506,307
447,166
42,482,703
|
+ 6,626,156
+ 1,939,549
+ 1,061,650
+ 82,080
+ 5,674,943
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|
|
110,788,366
|
126,172,744
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+15,384,378
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4. During 1996 a total of 1827 self-employed and/or self-occupied persons were issued with new Permits enabling them to pay the Class Two contribution at one of the established rates. Another 3996 applicants had their annual permit renewed.
5. 6010 persons applied for a Certificate of Low Income (exemption from the payment of contributions). All applications were accepted and the relevant Certificates issued except for 3 applications that were rejected.
6. A total of 1251 applications for ‘Deeming’ of Class One Contributions were received by this Section, of which 1038 were dealt with and 213 are awaiting further investigations. These applications are requests to the Director ‘to deem as paid’ any contributions deducted by the employer from the employee’s wage but not remitted to the Commissioner of Inland Revenue to whom all Social Security contributions are paid. The employer will be requested to pay the missing contributions on which he will also be charged a ‘further contribution’ on all such unpaid contributions.
7. During 1996 a total of 3880 applications for the payment of arrears of social security contributions were received from insured persons. 3743 bills in respect of arrears of contributions and further contributions (as per Section 116 of the Social Security Act Cap 318) were issued. The Department collected Lm201,077 for such service.
8. The Department initiated judicial action against 717 defaulters (employers) who persisted in refusing to pay Social Security Contributions due on behalf of their employees, or to reach an agreement with the Department to pay arrears over a period of months. The office of the Attorney General was requested to issue warrants against 481 of these defaulters. Furthermore another 23 defaulters reached agreement with the Department to pay all outstanding contributions by monthly instalments. As a result of the legal action taken against defaulters the Department collected Lm1,690,076 as arrears of Social Security Contributions and Lm195,968 as further contribution on late payments.
9. During 1996, the Expatriate Division dealt with 1650 foreigners who work in Malta on a temporary basis. Apart from this service, the expatriates division is also responsible for all correspondence with foreigners and foreign Social Security Departments who request other assistance related to the Maltese Social Security Law. Owing to the reciprocal agreement that exists between the United Kingdom and Malta, correspondence is exchanged between the two countries when issuing certificates of continued liability to Maltese citizens who work in the United Kingdom for a temporary period, and British citizens who work in Malta for a specific period.
Short-term Benefits
10. The number of claims for short-term benefits dealt with during
1996, as compared with 1995, were as follows:
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| Sickness Benefit
Unemployment Benefit Special Unemployment Benefit Injury Benefit Marriage Grant Gratuity on Re-marriage |
145,263
7,873
705
6,991
3,932
4
|
137,325
9,411
1,177
6,134
3,697
5
|
- 7,938
+ 1,538
+ 472
- 857
- 235
+ 1
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164,768
|
157,749
|
- 7,019
|
11. The number of Medical Certificates presented to the Department
by insured persons during 1996, compared with the number received in the
preceding year, was as follows:
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| First/Final (less than 4 days)
First/Final (from 4 to 6 days) First (open) Intermediate Final |
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12. During 1996, there were 6,134 reported accidents at the insured person’s place of work. On the other hand, 6 workers contracted an industrial disease.
13. One claim for injury was lodged as a result of a fatal accident.
14. 229 Disablement Gratuities and 30 Disablement Pensions were awarded to those who, as a result of an industrial injury, sustained a permanent disablement.
Children’s Allowances and other Family Benefits
15. On the 31st December, 1996 there were 47,480 households in receipt
of Children’s Allowances, compared to the 52,440 households on 31st December,
1995. This decrease was the result of the introduction of a new system
in July 1996, based on households’ income during 1995. Since this income
was not to exceed Lm10,000 the amount of eligible households was reduced.
The table immediately hereunder shows the load in payment, by types of
Allowance, at the end of 1996 as compared to 1995.
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(a) Child Allowance only:
(ii) Two eligible children (iii) Three eligible children (iv) Four or more eligible children (c) Child Allowance plus Special Allowance |
22,598
19,669
5,794
1,979
1,177
1,495
|
21,141
19,255
5,652
1,432
-
-
|
- 1,457
- 414
- 142
- 547
- 1,177
- 1,495
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|
|
52,712
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47,480
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- 5,232
|
16. During 1996 the Department received a total of 7,192 claims for Children’s Allowances as against 7,437 received in 1995. 2,207 applications followed the birth of a first child. The other 4,985 applications consisted of claims for a second or subsequent child or claims for children over 16 years still attending full-time education without receiving any stipend or registering for work under part I.
17. The table immediately hereunder shows the number of mothers in
receipt of Parental Allowance and the number of households in receipt of
Family Bonus up to 5th July, 1996 after which these benefits were terminated
with the introduction of the new system mentioned above. It also shows
the number of households in receipt of a Handicapped Child Allowance and
compares the number of accepted claims in respect of Maternity benefit
as at the end of 1995 and 1996.
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| Parental Allowance
Disabled Child Allowance Family Bonus Maternity Benefit |
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Contributory Pensions
18. The table immediately hereunder shows the number of persons in
receipt of a Contributory Pension/Allowance (excluding a Child Allowance)
at the end of 1996 and 1995.
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| Retirement Pension
Increased Retirement Pension National Minimum Retirement Pension Decreased National Minimum RetirementPension Increased National Minimum Retirement Pension Two-Thirds (Retirement) Pension Invalidity Pension Increased Invalidity Pension Decreased National Minimum Invalidity Pension National Minimum Invalidity Pension Widow’s Pension National Minimum Widow’s Pension Widow’s Special Allowance Widow’s Benefit Widow’s Allowance Early Survivor’s Pension Survivor’s Pension Disablement Pension Orphan’s Allowance Parent’s Pension |
5,523
4,199
7,338
55
1,599
10,329
1,074
726
63
2,996
1,994
7,555
6
-
1
1,240
1,322
372
13
-
|
5,975
3,924
7,536
54
1,591
11,072
1,189
646
56
3,325
1,975
7,545
6
-
-
1,305
1,574
388
15
-
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+ 1771
- 275
+ 198
- 1
- 8
+ 755
+ 115
- 80
- 7
+ 329
- 19
- 10
-
-
- 1
+ 65
+ 252
+ 16
+ 2
-
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46,405
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48,176
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+ 1771
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C. NON-CONTRIBUTORY SCHEME
19. The table below shows the number of persons in receipt of non-contributory
Age, Blindness or Handicapped pensions/Allowances and Carer’s Pension paid
under the Act.
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| Old Age Pension
Blindness Pension Mentally/Severely Handicapped Pension Carer’s Pension Old Age Allowance |
3,716
133
1,830
209
410
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3,920
130
1,868
251
460
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+ 204
- 3
+ 138
+ 42
+ 50
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6,298
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6,629
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+ 431
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Assistance
20.The table immediately hereunder shows the number of households
benefiting from non-contributory Assistance paid under the Act.
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| Social Assistance
Sickness Assistance Milk Grant Leprosy Assistance Tuberculosis Assistance Supplementary Allowance |
7,353
12,469
43
91
88
-
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8,124
13,156
51
88
87
33,508
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+ 771
+ 687
+ 8
- 3
- 1
+ 33,508
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20,044
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55,014
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+ 34,970
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21. During 1996, the Department carried out 4882 financial investigations
to determine the eligibility or otherwise to Free Medical Aid (another
form of assistance in kind provided for under the Act). 4710 were found
to be eligible. During 1995, the number of financial investigations carried
out was 5399 and these resulted in 5292 cases being accepted.
D. APPEALS TO THE UMPIRE
22. The following table shows how the number of appeals that were
up for one or more hearings during 1996 were dealt with as compared with
the same figures for 1995.
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| Brought forward from previous year
Lodged during the year Decided against appellant during the year
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70
384 = 454 318
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67
361 = 428 175
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| Still outstanding at the end of the year | 72 | 83 |
E. PAYMENTS
23. During 1996 the Department had to account for a total expenditure of Lm185,228,385 i.e. Lm24,807,790 more than the previous year. Apart from administration the Capital expenses, etc., the quoted expenditure related mainly to Social Benefits, which entailed the issue of 1,482,018 cheques. About 190,000 of these cheques were issued by Area Offices, whilst the remainder were directly issued by Head Office. Furthermore another 15,618 payments of benefits were made directly into the beneficiaries accounts with various banks. The State Contribution (vide table in para.2) also forms part of this expenditure.
24. The payment of this large number of costly benefits entails a voluminous amount of work comprising the preparation of paysheets, to entitled beneficiaries, their regular adjustments due to change in circumstances, the writing of cheques, the deposit at Banks of the cheques due for payment on their maturity date and the sorting and reconciliation of accounts when these cheques are eventually encashed.
25. The table immediately below shows the expenditure in 1996 on
Social Benefits payable under the Social Security Act, (Cap. 318) vis-a-vis
1995.
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| Pensions in respect of Retirement
Pensions in respect of Invalidity Pensions in respect of Widowhood Pensions in respect of Industrial Injuries Pensions in respect of Unemployment Children’s Allowance Maternity Benefit Sickness Benefit Orphan’s Allowance Parent’s Pension Marriage Grant Re-Marriage Gratuity Bonus |
48,478,754
6,202,692
18,536,874
484,911
637,687
15,521,530
488,416
1,087,454
12,100
-
241,244
5,384
8,204,318
|
54,573,029
7,779,816
20,465,125
471,232
934,408
18,333,539
542,662
1,304,088
11,952
-
245,109
9,133
8,760,421
|
+ 6,094,275
+ 1,577,124
+ 1,928,251
- 13,679
+ 296,721
+ 2,812,009
+ 54,246
+ 216,634
- 148
-
+ 3,865
+ 3,749
+ 556,103
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99,901,364
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113,430,514
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+ 13,529,150
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| Family Bonus
Pensions in respect of Age/Blindness Pensions in respect of Handicapped Social Assistance Medical Assistance Parental Allowance Handicapped Child Allowance Bonus Supplementary Allowance |
3,456,041
3,715,635 1,926,105 8,306,916 3,299,279 859,616
104,413
2,292,032
-
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1,731,833
4,520,293 2,164,308
10,107,482
3,811,605
434,091
90,277
2,405,006
1,288,525
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- 1,724,208
+ 804,658
+ 238,203
+ 1,800,566
+ 512,326
- 425,525
- 14,136
+ 112,974
+ 1,288,525
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23,960,037
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26,553,420
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+ 2,593,383
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123,861,401
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139,983,934
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+ 16,122,533
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F. COMPUTERISATION PROGRAMMES
26. The computerisation of many of the present manual systems is enabling the Department to improve its services and cater for the ever-increasing number of claims for Social Benefits.
27. The transition to and implementation of an integrated computer system is being carried out with the assistance of the Management Systems Unit and the Information Systems Development Division.
28. To date, the payment of all contributory pensions, as well as non-contributory benefits, with the only exclusion of Social Assistance have been fully computerised. From 372 cases in OAA, 164 cases, for those persons who are in Geriatric institutions are still being paid normally in cash.
G. CUSTOMER CARE OFFICER/MANUALS AND LEAFLETS
29. During 1996, the number of claimants who made use of this service
was 40,173. The nature of their queries are shown in the following table:
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| Contributory Benefits
Children’s Allowance Non-Contributory Benefits Contributory Pensions Enforcement |
6,696
6,174 5,021 |
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H. ESTABLISHMENT OF AN INTERNAL AUDIT FUNCTION
30. The Internal Audit Section was introduced within the Ministry for Social Security in October 1993. It is composed of one Senior Principal Officer, namely Mr. Tonio G. Farrugia. This officer followed an intensive course on Internal Auditing organised by Staff Development Organisation with the collaboration of Management Systems Unit which lasted 18 months. Mr. Farrugia also followed Training Programmes on ‘Discovering Risks in Computerised Information Systems’, ‘The Audit of Advanced Computer Systems’, The Internal Auditor BS EN ISO 9000’, Networking and the use of Audit and IT programmes like the Infomaker and the IDEA.
Since the setting up of this section, several programmes have been carried out resulting in the change of both the manual and computerised systems of the Department, making the current system more effective, efficient and reliable. Changes carried out included:
The checking of all computerised records pertaining to contributory pensioners with the Electoral Office to ensure that all records refer to ‘live’ persons;
An audit survey of the Enforcement Section to highlight the weak points and effect the required changes in order to get this section, which is depleted of the much needed personnel, running more smoothly and more effectively;
An audit survey on the Maintenance and Stores Sections, where certain weak points were highlighted, and corrected, thus making the section more efficient and better controlled;
An audit survey on the criteria used regarding the insurability of Directors of Companies in order to eliminate the possibility of manipulation as to the class of contribution payable by these persons;
The Ministry has enrolled with Ark Publications Ltd. via MODEM facilities. This firm provides very useful information regarding Company Directors such as their Identity Card number, the share holdings, and their address on registration with the Partnerships Division. Such information helps the department to trace the present whereabouts of those Directors who are sought by the Department for the non-payment of Social Security contributions due by their company and who have changed their address since the registration of the Articles of Association without informing the Director of Partnership. Such information was previously obtained after a written request to the ID Card Section, and one had to wait for a relatively long period prior to receiving a reply.
A computerised list of the electoral register was acquired and inserted on our system so as to ensure that all future details in respect of persons in receipt of a pension and/or assistance would be correct.
The list of deceased persons, which, up to March 1994, used to be received in the form of a printout, is now being received on diskette, and a programme has been introduced whereby any pension, and/or assistance is stopped automatically by the computer as soon as this diskette is inserted in our system. The system also ensures that the list of persons, obtained from the Electoral Office and loaded on the Department’s mainframe, is updated every time the diskette containing information regarding deceased person is in receipt of any benefit/assistance from the department. Furthermore, talks are in progress to have a similar programme in respect of all births. This will serve to enhance the department’s database as well as enhance the programme regarding the payment of Children’s Allowance which should become part of the system in the very near future.
As from the 1st November 1994, the Department has gone ‘on line ‘ with the Public Registry. This function has enabled the department to view and print any certificates according to the data available at the Public Registry. The Internal Audit Section has also been directly connected with the DAS System and the SABS system. This has enabled the Internal Auditor to identify areas where weaknesses were obvious and after consultations with the responsible persons, such weaknesses were eliminated. Work was also undertaken to install a report generator which will enable both the Internal Auditor and Management to extract any report, whether statistical or otherwise, from data pertaining to the SABS system.
Discussions are in hand with the Employment and Training Corporation (ETC) in order to enable the Department of Social Security to go ‘on line’ with the ETC thus making it possible to have first hand information regarding the details of employment of all persons applying for Assistance and/or Benefits from this Department.
During 1996, this section was also responsible for the agreement with the VAT department for the attainment of electronic data pertaining to persons registered under the VAT system for use by this department when assessing claims for the payment of a Social Security contribution by the self-employed. This section was also instrumental in solving a six month old problem concerning the reconciliation of social security payments effected at the Inland Revenue Department and the processing of electronic data supplied.
Audit surveys and reports were carried out in respect of the Payment
of Arrears by persons over pension age, the Customer Care Office, the Reception
and Area Offices, the Industrial Injuries Schemes, the Timely and Regular
Payments of Social Security Contributions falling under the Bulk Payment
System, and on late payments of Social Security Contributions, the non-payment
of the Further Contribution. The Human Resources and Personnel Sections
with the Ministry, the Delay in issuing a pension because of unsettled
Social Security Contributions, Duplication of records on the VAX and the
SABS databases, and the determination of Children’s Allowance through electronic
means.
I. AREA OFFICES
31. The Department has twenty Area Offices in Malta, viz: at Balzan, B’Kara, Cospicua, Hamrun, Luqa, Marsa, Mosta, Msida, Naxxar, Paola, Qormi, Rabat Sliema, St. Paul’s Bay, San Gwann, Valletta, Zabbar, Zebbug, Zejtun, and Zurrieq and two in Gozo, viz: at Victoria and Nadur.
32. Work carried out at Area Offices mainly comprised:-
(a) The preparation and issue of cheques once a week to all beneficiaries in receipt of Unemployment Assistance,
(b) the Financial Investigations referred to in paragraph 21 of this report,
(c) the registration under the Social Security Act of newly employed workers, and
(d) dealing with all queries raised by the general public.
33. The Introduction of the Supplementary Benefit and the re-assessment
of the Children’s Allowance on the financial means of the household placed
a heavy load of work on the staff at the Area Offices. Eventually almost
half of the applications were raised at the Area Offices. Subsequently
a small proportion of the forms filled in by the public had to be referred
back to the Area Office for submission of missing data or for the clarification
of the information given.
J. STAFF
34. During 1996 the staff complement of the Department of Social
Security increased by 35 when compared to the complement on 31st December,
1995, as shown in the following table:
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+34 | +1 | +35 |
35. Of the staff referred to in the preceding paragraph, 17 (as on
31st December 1996) were performing duties in the Department’s 2 Area Offices
in Gozo.
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