Analysing the Distributional Implications of the 2022 Policy Measures for Malta

Abstract

This research paper examines the redistributive impact of the main social measures that were introduced during 2022 in Malta. These measures include: an extension of the in-work benefit, a one-time payment to mitigate the impact of inflation, a revised supplementary allowance, a weekly increase in pensions of €3.51, a €50 increase in the grant given to the elderly, a tax rebate to pensioners, a tax refund to employees and a tax reduction on part-time income from 15 per cent to 10 per cent.
In order to assess the effect of these measures on the income distribution and the at-risk-of-poverty rate we use EUROMOD, which is a tax-benefit micro-simulation model. Overall, the results presented in this paper indicate that the implementation of these various social measures contribute to a decrease in the poverty rate in all cohorts of the population whilst also improving the income distribution across the population, implying that income inequality is reduced.
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