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 those with a low-income, the sick, the elderly and the unemployed.

The continuous rise in Social Security rates was further sustained by Act XXVII of 1997 which brought about various amendments to the Social Security Act (Cap 318), and paved the way for total expenditure on Social Security in 1997 to exceed Lm150 million. This rising trend was not only restricted to expenditure levels, but also reflected in the ever-increasing number of claims for benefits submitted throughout 1997.

A. LEGISLATION

1. The Amending Act of 1997 mainly provided for the increases in the rates of Social Security benefits and contributions as had previously been announced in the Budget Speech for 1997. Although the substantial part of these increases were proportionately tied to the Lm1.75 general rise in wages awarded by Government, other additional or innovatory measures were also introduced.

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 Lm36.13 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;

The Social Security contribution rate payable by employers is 10% as in 1995. The employees’ rates were not touched but increased proportionately in line with the cost of living increase award in wages;

Likewise the rates of contributions payable by the self-employed showed an increase of 27c per week up to March and 30c per week with effect from April.

B. CONTRIBUTORY SCHEME

Contributions and Enforcement

2. The total revenue collected during 1997 in terms of the Social Security Act, (Cap 318) amounted to Lm142,183,590 as compared to Lm126,172,744 in respect of the previous year. These figures are broken down in detail in the following table:
 

Type of Contributions	1996 Lm	1997 Lm	+ or - Lm
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	51,685,141 23,051,427 8,506,307 447,166 42,482,703	61,345,130 22,974,159 10,274,175 293,395 47,296,731	+ 9,659,989 - 77,268 + 1,767,868 - 153,771 + 4,814,028
Total	126,172,744	142,183,590	+16,010,846

 
3. The Enforcement Section was, as in previous years, actively involved in putting into effect the various provisions of the Social Security Act since some employers failed to pay Social Security Contributions in respect of their own share and the share of their employees.

4. During 1997 a total of 1273 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 1923 applicants had their annual permit renewed.

5. Five hundred and ten persons applied for a Certificate of Low Income (exemption from the payment of contributions). Certificates have been issued except for seven applications which were rejected.

6. A total of 1683 applications for ‘Deeming’ of Class One Contributions were received by this Section, of which 1617 were dealt with and 66 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 unpaid contributions.

7. During 1997 a total of 1172 applications for the payment of arrears of Social Security Contributions were received from insured persons. 2115 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 Lm185,739 from such service.

8. The Department initiated judicial action against 793 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 253 of these defaulters. Furthermore another 43 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 Lm1,126,333 as arrears of Social Security Contributions and Lm163,196 as further contribution on late payments.

9. During 1997, the Expatriate Division dealt with 850 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.

10. A concession to defaulters in the payment of Social Security Contributions was given in payment of arrears between the period 29th September, 1997 and 31st December, 1997. As a result of this concession which waived off the 5% penalty on late payments, Lm 4.2 million in arrears of unpaid contributions were collected.

Short-Term Benefits

11. Claims for short-term benefits dealt with during 1997, as compared with 1996, were as shown in the table immediately hereunder:
 

Type of Benefit	1996	1997	+ or -
Sickness Benefit   Unemployment Benefit   Special Unemployment Benefit   Injury Benefit   Marriage Grant   Gratuity on Re-marriage	137,325 9,411 1,177 6,134 3,697 5	145,423 9,747 1,917 5,723 3,651 15	+ 8,098 + 336 + 740 - 411 - 46 + 10
Total	157,749	166,476	+ 8,727

12. The number of Medical Certificates presented to the Department by insured persons during 1997, compared with the number received in the preceding year, was as shown hereunder:
 

Type of Medical Certificate	1996	1997	+ or -
First/Final (less than 4 days)   First/Final (from 4 to 6 days)   First (open)   Intermediate   Final	77,321 43,730 16,274 84,248 12,623	78,221 50,549 16,653 86,757 13,666	+ 900  + 6,819 + 379 + 2,509 + 1,043
Total	234,196	245,846	+ 11,650

Additional note to above table:
"First" certificates bearing a date of resumption of duties within 6 days of examination, need not be covered by a "final" certificate as well.
"Final" certificates are drawn only when the incapacity for work lasts for more than 3 days or when date of resumption of duties is not indicated in the "First" certificate.

13.    During 1997, there were 5,723 reported accidents at the insured person’s place of work.  On the other hand, 4 workers contracted an industrial disease.

14.    No claims for injury was lodged as a result of a fatal accident.
 

15.    258 Disablement Gratuities and 26 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

16.    On the 31st December, 1997 there were 43,477 households in receipt of Children’s Allowances, compared to the 47,480 households on 31st December, 1996.  The decrease from previous years was the result of the higher incomes declared by claimants in respect of 1996.  Reckonable income was not to exceed Lm10,104 (excluding Social Security Contributions) and the amount of eligible households was reduced.  The folowing table shows the load in payment, by types of Allowance, at the end of 1997 as compared to 1996:
 

Number of Families
Type of Allowance	1996	1997	+ or -
(a) Child Allowance only:   (i) One eligible child   (ii) Two eligible children   (iii) Three eligible children   (iv) Four or more eligible children  (b) Special Allowance only   (c) Child Allowance plus Special Allowance	21,141 19,255 5,652 1,432 - -	18,368 17,702 5,115 1,292 - -	- 1,773 - 1,553 - 537 - 140  - -
Total	47,480	43,477	- 4,003

 
17.    During 1997 the Department had to review all cases of Child Allowance that were in payment up to end of June, 1997 and to establish the new Child Allowance rates for the year starting July, 1997.

18.    The immediately following table shows the number of households in receipt of a Disabled Child Allowance and compares the number of accepted claims in respect of Maternity benefit as at the end of 1996 and 1997.
 

Type of Benefit	1996	1997	+ or -
Parental Allowance   Disabled Child Allowance   Family Bonus   Maternity Benefit	8,036*   577  52,930* 4,079	- 562 - <>   Transfer interrupted! >	- - 15 -  - 66

* As per payment effected on 6th April 1996 (covering up to 5th July 1996)

Contributory Pensions

19.    The immediately following table shows the number of persons in receipt of a Contributory Pension/Allowance (excluding a Child Allowance) at the end of 1997 and 1996.
 

Type of Contributory Pension/Allowance	1996	1997	+ or -
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	5,975 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 -	6,302 3,842 7,676 68 1,542 12,015 1,182 610 3,491 48 1,928 7,532 4 -  -  1,367 1,830  397 15 -	+ 327 - 82 + 140 + 14 - 49 + 943 - 7 - 36 + 166 - 8 - 47 - 13 - 2 -  - + 62  + 256 + 9 - -
Total	48,176	49,849	+ 1,673

 
 

C.  NON-CONTRIBUTORY SCHEME

20.    The immediately followingt table shows the number of persons in receipt of non-contributory Age, Blindness or Handicapped pensions/Allowances and Carer’s Pension paid under the Act.
 

Type of Non-Contributory Pension/Allowance	Number of Beneficiaries as on 31.12.96	Number of Beneficiaries as on 31.12.97	+ or -
Old Age Pension   Blindness Pension   Mentally/Severely Handicapped Pension   Carer’s Pension   Old Age Allowance	3,920 130 1,868 251 460	4,317 117 1,804 300 352	+ 397 - 13 - 64 + 49 - 108
Total	6,629	6,890	+ 261

 

Assistance

21.    The number of households benefitting from non-contributory Assistance paid under the Act during the period of this report as compared to the number for 1996 was as follows:
 

Type of Assistance	Number of Beneficiaries as on 31.12.96	Number of Beneficiaries as on 31.12.97	+ or -
Social Assistance   Sickness Assistance   Milk Grant   Leprosy Assistance   Tuberculosis Assistance   Supplementary Allowance	8,124 13,156 51 88 87 33,508	8,880 13,857 66 85 76 32,447	+ 756 + 701 + 15 - 3 - 11 - 1,1061
Total	55,014	55,411	+ 397

22.    During 1997, the Department carried out 4992 financial investigations to determine the eligibility or otherwise to Free Medical Aid (another form of assistance in kind provided for under the Act).  4867 were found to be eligible.  During 1996, the number of financial investigations carried out was 4882 and these resulted in 4710 cases being accepted.
 

D.  APPEALS TO THE UMPIRE

23.    The table immediately hereunder shows how the number of appeals that were up for one or more hearings during 1997 were dealt with as compared with the same figures for 1996.
 

Number of Appeals	1995	1996
Brought forward from previous year   Lodged during the year   Decided against appellant during the year   Decided in favour of appellant during the year   Withdrawn by appellant during the year	67        361 = 428        175          28        142 = 345	83        533 = 616        177          29        182 = 388
Still outstanding at the end of the year	83	228

 
 

E.  PAYMENTS

24.    During 1997 the Department had to account for a total expenditure of Lm204,077,965  i.e. Lm18,849,580 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 1,500,191 cheques.  About 230,000 of these cheques were issued by Area Offices, whilst the remainder were directly issued by Head Office.  Furthermore another 29,269 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.

25.    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 che ques due for payment on their maturity date and the sorting and reconciliation of accounts when these cheques are eventually encashed.

26.    The immediately following table shows the expenditure in 1997 on Social Benefits payable under the Social Security Act, (Cap. 318) vis-a-vis 1996.
 

Type of Benefit/Pension/Assistance/Allowance	1996 Lm	1997 Lm	+ or - Lm
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	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	57,630,644 7,943,119 22,527,699 464,556 1,209,957 20,369,590 535,495 1,682,145 13,340 - 260,698 19,940 8,904,478	+ 3,057,615 + 163,303 + 2,062,574 - 6,776 + 275,549 + 2,036,051 - 7,167 + 378,057 + 1,388 - + 15,589 + 10,807 + 144,057
Total (i)	113,430,514	121,561,661	+ 8,131,047
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	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	- 5,174,747 2,243,332 11,801,067 4,313,086 -  127,408 2,536,695 2,574,665	- 1,731,833 + 654,454 + 79,024 + 1,693,585 + 501,481 - 434,091 + 37,131 + 131,689 + 1,286,140
Total (ii)	26,553,420	28,771,000	+ 2,217,580
Grand Total {Total (i) + Total (ii)}	139,983,934	150,332,661	+ 10,348,627

 
 

F.  COMPUTERISATION PROGRAMMES

27.    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.

28.    The transition to and implementation of an integrated computer system is being carried out with the assistance of the Malta Information Technology and Training Services Limited (M.I.T.T.S.) and the Information Systems Development Division.

29.    To date, the payment of all contributory pensions, as well as non-contributory benefits, with the only exclusion of unemployment Assistance have been fully computerised.
 

G.  CUSTOMER CARE OFFICER/MANUALS AND LEAFLETS

30.    During 1997, the number of claimants who made use of this service was 40,413.  The nature of their queries are shown in the following table:
 

Nature of queries	1996	1997
Contributory Benefits   Children’s Allowance   Non-Contributory Benefits   Contributory Pensions   Enforcement	5,864  7,089 7,344 12,263   7,613	6,197 9,403 5,492  11,803  7,518

The number of queries lodged at the Customer Care Service increased only by 150 as increases of those regarding contributory Benefits and Children’s Allowance were counterbalanced by decreases in those regarding Non-Contributory Benefits, Contributory Pensions and Enforcement.  The greatest increase was in queries regarding Children’s Allowance as financial investigation of borderline cases delayed the issue of payment of a considerable number of applications.

The number of persons calling at the Reception area practically remained at the same level as the year before.  The non-contributory benefits queries dropped substantially by just over 26%.  The increase in staff in these sections and the quicker processing of the claims were the reasons for the decrease in numbers of queries.  On the other hand, these were an increase of 36% in the number of queries about the Children’s Allowance.
 

H.  ESTABLISHMENT OF AN INTERNAL AUDIT FUNCTION

31.    The Internal Audit Section was introduced with the Ministry for Social Welfare in October 1993.

Since its setting up, this section has performed several surveys to study in detail current systems and it has been instrumental for the enhancement of several of these systems.  It has also made various recommendations for the enhancement of other systems and these will be taken into consideration at the appropriate time.

During 1997, this section has undertaken the task to co-ordinate the Registry systems within the Department and is currently in the act of establishing a system for co-ordinating the Department with the E.T.C. in electronic format.
 

I.    AREA OFFICES

32.    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.

33.    As in previous years, 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.

34.    Supplementary allowance 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

35.    During 1997 the staff complement of the Department of Social Security reduced by 12 when compared to the complement on 31st December, 1996, as shown immediately hereunder:
 

As on	General Service Grades	Industrial/Messengerial	Total
31st December 1996 31st December 1997	256 250	82 76	338 326
Difference	- 6	- 6	- 12

 N.B. The staff in the Administration, Computer and Reconciliation Sections form part of the Ministry and are not shown in the above table

36.    Of the staff referred to in the preceding paragraph, 17  (as on 31st December 1997) were performing duties in the two Area Offices in Gozo.