The Department is responsible for the administration of Social Security legislation which provides for the payment of benefits under contributory and non-contributory schemes.  

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 XXVI of 1995 which brought about various amendments to the Social Security Act (Cap. 318), and paved the way for total expenditure on Social Security in 1995 to exceed Lm123 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 1995.

 
A. LEGISLATION

1. The Amending Act of 1995 mainly provided for the increases in the rates of Social Security benefits and contributions as had previously been announced in the Budget Speech for 1995. Although the substantial part of these increases were proportionately tied to the Lm2.25 general rise in wages awarded by Government, other additional or innovatory measures were also introduced. These measures included:-

• The scale rate of means governing the award of 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;

• The incomes ceiling for entitlement to Parental Allowance was increased from Lm2,938 to Lm3,055 per annum;

• 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 1994. 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 35c per week.

Contributions and Enforcement

2. The total revenue collected during 1995 in terms of the Social Security Act, (Cap. 318) amounted to Lm110,788,366 vis-a-vis the Lm101,769,865 in respect of the previous year. These figures were broadly broken down as follows:

3. The Enforcement Section was, as in previous years, actively involved in putting into effect the various provisions of the Social Security Act since quite an appreciable number of those liable to pay contributions, viz: employers and self-employed, fell in arrears.

4. During the same period a total of 1129 self-employed persons were issued, following application, with Permits enabling them to pay the Class Two contribution at one of the lower rates. Another 1390 applicants had their permit changed from one category to another and a further 1719 applicants updated their existing permit.  Moreover, a total of 977 persons applied for a Certificate of Low Income (exemption from the payment of contributions). All applications were accepted and the relevant Certificates issued except in the case of 15 applications which were rejected.  

5. A total of 1011 applications for "Deeming" of Class One Contributions were received by this Section, of which 891 were dealt with and 228 are still pending, awaiting further investigations. These 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.  

6. During 1995, a total of 3020 requests for payments of arrears of contributions were received from insured persons. Relative bills (contributions and further contribution - Section 116) were issued to 2881 applicants and 104 requests were rejected on legal grounds.  

7. During the year the Department initiated judicial action against 481 defaulters 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 serve warrants against 160 of these defaulters. Furthermore another 36 defaulters reached agreement with the department to pay all outstanding contributions over a prescribed period. The amounts of Lml,299,068 as Social Security Contributions in respect of the periods in default and Lml13,794 as Further Contribution on late payments were collected.  

Short-Term Benefits  

8. Claims for short-term benefits dealt with during 1995, as compared with 1994, were as shown immediately hereunder:
 

Type of Benefit	1994	1995	+ or -
Sickness Benefit   Unemployment Benefit   Special Unemployment Benefit   Injury Benefit   Marriage Grant   Gratuity on Re-marriage	144,050 7,618 830 7,157 3,751 16	145,263 7,873 705 6,991 3,932 4	+ 1,213 + 255 - 125 - 166 + 181 - 12
Total	163,422	164,768	+ 1,346

 
9. The number of Medical Certificates presented to the Department by insured persons during 1995, compared with the number received in the preceding year, was as follows:

10. During 1995, there were 6,991 reported accidents at the insured person's place of work. On the other hand, 6 workers contracted an industrial disease.  

11. Ten employees died as a result of an accident at work.  

12. 185 Disablement Gratuities and 25 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  

13. During 1995 the Department received a total of 7,437 claims for Children's Allowances as against 8,268 received in 1994. 2,321 applications followed the birth of a first child and 5,116 applications followed the birth of a second or subsequent child or a claim for 'Special Allowance' (students over 16 years of age). Of these 30 claims were rejected on legal grounds.  

14. On the 31st December, 1995 there were 52,440 households in receipt of Children's Allowances, compared to the 52,731 households on 31st December, 1994. The table immediately hereunder shows the load in payment, by types of Allowance, at the end of 1995 as compared to 1994.

15. The table immediately herudner shows the number of mothers in receipt of Parental Allowance and the number of households in receipt of a Handicapped Child Allowance and the Family Bonus as at the end of 1995 and 1994. It also compares the number of accepted claims in respect of Maternity Benefit as at the end of the two aforementioned years.

Contributory Pensions  

16. The following table shows the number of persons in receipt of a Contributory Pension/Allowance (excluding a Child Allowance) at the end of 1995 and 1994:
 

Type of Contributory Pension/Allowance	1994	1995	+ 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	5,365 4,226 7,186 60 1,544 9,574 902 827 65 2,617 1,979 7,435 6 - 2 1,169 1,132 361 9 -	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 -	+ 158 - 27 + 152 - 5 + 55 + 755 + 172 - 101 - 2 + 379 + 15 + 120 - - - 1 + 71 + 190 + 11 + 4 -
Total	44,459	48,176	+ 1,946

   
 

C. NON-CONTRIBUTORY SCHEME

Pensions

17. The table immediately hereunder 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 31.12.94	Number of Beneficiaries as on 31.12.95	+ or -
Old Age Pension   Blindness Pension   Mentally/Severely Handicapped Pension   Carer’s Pension   Old Age Allowance	3,833 129 1,794 191 494	3,716 133 1,830 209 410	- 117 + 4 + 36 + 18 - 84
Total	6,441	6,298	- 143

 
Assistance 

18. The immediately following table shows the number of households benefiting from non-contributory Assistance paid under the Act.

19. During 1995, the Department carried out 5,399 financial investigations to determine the eligibility or otherwise to Free Medical Aid (another form of assistance in kind provided for under the Act). 5,292 were found to be eligible. During 1994, the number of financial investigations carried out was 5,820 and these resulted in 5,631 cases being accepted.
 

D. APPEALS TO THE UMPIRE

20. The immediately following table 9 shows how the number of appeals that were up for one or more hearings during 1995 were dealt with as compared with the same figures for 1994.

21. During 1995 the Department had to account for a total expenditure of Lml60,420,595 i.e. Lm8,472, 185 more than the previous year. Apart from administration and Capital expenses, etc., the quoted expenditure related mainly to Social Benefits, which entailed the issue of 1,369,284 cheques. About 190,500 of these cheques were issued by Area Offices, whilst the remainder were directly issued by Head Office. The State Contribution (vide table in para. 2) also forms part of this expenditure.

22. 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.  

23. The table below shows the expenditure in 1995 on Social Benefits payable under the Social Security Act, 1987 vis-a-vis 1994.

F. COMPUTERISATION PROGRAMMES

24. 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.

25. 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.  

26. 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 410 cases in OAA, 208 cases, for those persons who are in Geriatric institutions are still being paid normally in cash.
 

G. CUSTOMER CARE OFFICER/MANUALS AND LEAFLETS
 
27. This office was transferred to the Ground Floor on 12 August, 1994 and decorated on modern lines to provide a comfortable environment for the public and the Departmental staff. It continued to improve the standard of the aim for which it was set up, namely to meet complaints from the public and give the required information and necessary assistance promptly. The number of claimants who made use of this service during 1995 was 36,285 as compared to 33,242 who made use of this service during 1994.  The nature of the queries raised by these claimants was as shown hereunder:
 

Nature of queries	1994	1995
Contributory Benefits   Children’s Allowance   Non-Contributory Benefits   Contributory Pensions   Enforcement	5,965 7,357 4,499 9,111 6,310	6,696 6,174 5021 11,684 6,711

 
 

H. ESTABLISHMENT OF AN INTERNAL AUDIT FUNCTION

28. The Internal Audit Section was introduced within the Ministry for Social Security in October 1993. It is composed of one 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' and 'The Audit of Advanced Computer Systems', and The Internal Auditor BS EN ISO 9000'.

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 pertain 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 in loaded irrespective of whether the 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 will enable 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 also in hand with the Employment 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;

• 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 the Bulk Payment System, and on late payments of Social Security Contributions and the non-payment of the Further Contribution.

I. AREA OFFICES

29. 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.

Work carried out at Area Offices mainly comprised:-

• the Preparation and issue of cheques Once a week to all beneficiaries in receipt of Unemployment Assistance;

• the Financial Investigations referred to in paragraph 19 of this report;

• the registration under the Social Security Act of newly employed workers: and

• dealing with all queries raised by the general public.

J. STAFF

32. During 1995 the staff complement of the Department of Social Security decreased by 10 when compared to the complement on 31st December, 1994, as shown in the immediately following table:

Of the staff referred to in the preceding paragraph, 20 (as on 31/12/95) were performing duties in the Department's 2 Area Offices in Gozo.