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The Children’s Allowance, a pillar of the welfare state, is dying a slow natural death.
James Debono
The expenditure on children’s allowance, a sum of money for each child in a family, declined from Lm20 million in 1997 to Lm13 million in 2005.
The number of families receiving this benefit has also decreased by 17,000 from 49,882 in 1997 to 33,686 in 2006.
The decline is mainly attributable to the decline in the number of families declaring less than a joint income of Lm10,000. A declining birth rate and a clampdown on benefit fraud are also contributing to the decline.
Introduced by Dom Mintoff as an allowance for the first three children of every Maltese family, the Nationalists extended the allowance to cover any number of children in a family when elected in 1987.
But in the mid-1990s an income ceiling for eligibility for the allowance was set at Lm10,270. The amount is calculated after national insurance contributions are deducted.
A ceiling of Lm13,270 applies for families with more than 3 children. The ceiling has been fixed for the past decade irrespective of inflation and other factors. This has deprived a substantial section of the middle-class from the benefit.
Effectively a husband and a wife with two children earning Lm6,000 would be excluded.
The decline in the expenditure on children allowance can also be attributed to a clampdown on benefit abuse as well as the lowering of the birth rate. From January 2006 to date 136 families were found to be in breach of regulations and required a review of their children allowance rate, a spokesperson for the Ministry for the Family and Social Solidarity told Business Today.
Parents of children with a disability may request a disabled child allowance for the particular child, the ceiling of which is set at Lm13,270. But in this case if both parents are actively employed, only the higher of the two salaries is taken into account.
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