Gemma webinar social security contributions what is important to know

1. Pamela Pace
Assistant Principal
Pensions | Benefits Department

2. Insurability…
 Part-timers
 Employed
 Self-employed –
Self/occupied
 Exemptions
 Employment abroad
 Early/Voluntary
Retirement Schemes
 Credits

3. Il-Bolla …
• The social security contribution has traditionally been referred to as 'bolla'
in Maltese.
• 'Bolla' refers to the 'stamp' that used to be manually affixed to a person's notebook
showing the number of contributions a person paid.
• A social security contribution is also referred to as SSC or NI, in day-to-day language
and in abbreviated terms.
• All persons who are over the age of sixteen (16) and who have not yet attained
retirement age of 65 years, and who are in insurable employment, are liable to pay
Social Security Contributions.
• Employees who are employed for less than eight (8) hours in any one calendar week
are not considered as being in insurable employment for Social Security
Contribution purposes and are exempted from paying an employed social security
contribution.
• Each year of gainful occupation will carry 52 or 53 social security contributions
(depending on the annual number of Mondays).

4. Type of Social Security Contributions:
Two types:
 Class I Social Security Contributions
 Class II Social Security Contributions

5. Class I Social Security Contributions
Social Security
Contributions
by individuals
who are
employed
persons are
called Class I
Contributions
and are paid by
direct
deductions
from the same
employees’
salary.
Rates for 2020
https://cfr.gov.mt/en/rates/Pages/SSC1/SSC1-2020.aspx

6. Class II Social Security Contributions
Self-Occupied Persons:
persons who earn income
from Trade, Business,
Profession, Vocation or
any other economic
activity that exceeds €910
per annum.
Self Employed Persons:
persons who receive
income from rents,
investments, capital gains
or any other income.
https://cfr.gov.mt/en/rates/Pages/SSC2/SSC2-2020.aspx
Rates for 2020

7. Overtime earnings have no effect on SSC Rate
The table shows
that the €300
earned in overtime
has been ignored.
Social Security
Contribution rate
due is calculated on
the Basic Weekly
Wage which
excludes
allowances,
bonuses, and/or
overtime earned in
a particular week.

8. Part-time Employees
Anyone who works less than 40 hours per week and who earns less than the National Minimum
(weekly) Wage (€179.33 weekly or €4.48), has the option to pay their share of social security
contributions on a pro-rata basis, 10% of their basic weekly wage as per Category B below.
When paying social security contributions by 10% pro-rata, these contributions are
different from the full contributions paid at the applicable full weekly rate and
eventually WILL NOT be considered as one contribution per week.

9. Social security contributions
are shown on the employee’s
contribution record.
• It’s divided into 3 main columns
• 1st column - the year when
contributions were made
• 2nd column – number of contributions
by
Class 1 – employees
Class 2 – self-employed / self-
occupied
Class 3 – voluntary – retrospective
• 3rd column – credits by class

10. Calculation of a Contribution Average
• The calculation of a
Contribution Average
is assessed on the
number of
contributions / credits
from age 18 up to the
date of retirement.
• To be eligible to a full
two thirds pension, the
contribution average
must be at least 50
Any contribution average from 15 to 49.99
will result in a decreased amount of Two-Third’s Pension (TTP) rate

11. Retrospective Payments
are currently employed or self-occupied.
are 59 years up to and including 65 years of age
decide to pay contributions up to a maximum of 5
years (260 contributions)
Contributions may only be paid for periods of
residence in Malta
Applicable rate due is the current Class 2 Social
Security Contribution Rate SA, which in 2020
stands at €30.77 per contribution.
If you are employed or self-occupied, you have the
option to pay Social Security Contributions (SSCs)
to fill any gaps in your contribution record which
will eventually improve your pension rate.
The scheme is applicable for those persons who:

12. Who is exempted from payment of
contribution
If their annual earnings exceed €910,
they are personally responsible to pay
a self-occupied contribution.
If their annual earnings do not exceed
€910 are exempted from payment of
contributions
Employees who carry out less than eight (8) hours of work in any
one calendar week are not considered as being in insurable
employment for Social Security Contribution purposes.
BUT

13. Employment abroad…
Maltese employed abroad in
a non EU country
an EU country
EU institutions
WHO
UN institutions
who maintain an ordinary residence
in Malta have the option to pay a
Class I contribution by virtue of Article
13 of the Social Security Act (Cap
318). Payment is carried out in the
same manner as that applicable to
self-employee/occupied persons on
the form below.

14. Early/Voluntary Retirement Scheme
Persons who retire from employment through an early/voluntary
retirement scheme have the option to continue paying a Class II
contribution as self-employed persons by virtue of Article 3.
They may:
 choose to pay social security contributions up to retirement age. A
copy of scheme would be required together with a request to pay
national insurance contributions. Request should include that
registering for employment with ETC will not take place;
 register for employment with JOBS+ BUT during the first six
months, a request should be sent to the Department of Social
Security whereby a bill for the payment of social security
contributions for the first six months is duly issued. After the lapse
of six months these contributors are eligible to unemployment
benefits (UB) and social security unemployment credits.

15. Credits
Credits are credited contributions that protect your social security contribution record
sheet. You get your contributions covered if:
 you stay at home to care for a child up to six years of age
 the medical board certified you as being incapable of performing full-time or part-
time employment due to health reasons.
 are a widow for period during which you do not remarry and provided your
deceased husband had paid 156 contributions prior to his death
 an ex-member of the Malta Police Force or of the Armed Forces of Malta who
retired from the service and did not resume employment.
 you are in receipt of sickness benefit
 you are self-occupied and in receipt of injury benefit
 you lost your job through redundancy and registering for work
 you have furthered your studies
 performance of volunteering work in Malta or abroad
 you are in receipt of carer’s pension

16. More than just pensions
 Unemployment
 Benefit/Special Unemployment Benefit
 Injury on Duty Benefit
 Marriage Grant
 Maternity Benefit
 Maternity Leave Benefit
 Contributory Retirement Pension
 Widow’s Pension
 Invalidity Pension
 Grant paid to persons who do not qualify
for a pension due to a low contribution
average
 Non Contributory Benefits - Age Pension
 SocialAssistance/Unemployment Assistance
 Subsidiary Unemployment Assistance
 Payment to Residents of a Therapeutic Community
 Tapering of Benefits
 Sickness Assistance
 Milk Grant
 Free Medical Aid (Pink Form)
 Schedule 5 (Yellow Card)
 Assistances for a Disability
 Assistance for the Visually Impaired
 Disability Assistance
 Carers Benefits
 Children Allowance
 Supplementary Allowance
 Energy Benefit
 In Work Benefit
 Senior Citizen Grant

17. Pamela Pace
Assistant Principal
Pensions | Benefits Department
Thank you…
For more information about
Social Security Contributions
visit
www.gemma.gov
socialsecurity.gov.mt
irdpubserv.gov.mt/services/ssccalculator.aspx
To address specific individual queries
Call 153
or email to
gemma@gov.mt
social.security@gov.mt