Details of new COVID wage supplement system revealed

Government will be introducing a new system for the COVID-19 wage supplement scheme as of August 2021. The new system was revealed following consultations among the Malta Council of Economic and Social Development (MCESD).

In effect, the Government will be gradually phasing out the wage supplement throughout the last five months of the year.

Those businesses still experiencing a drop of more than 55 per cent of their revenue due to the pandemic will continue to receive the full wage supplement support of €800 per month, per employee, until the end of 2021.

Furthermore, those businesses currently benefiting from the wage supplement will continue to leave a level of support until the end of the year, gradually tapering to 60-80 per cent of the current benefit during Q3 of 2021, and to 50 per cent during Q4 of the year.

Information about the new scheme is being distributed to businesses that are members of Malta’s various constituted bodies and business organisations:

In addition, VAT-exempt beneficiaries currently receiving €600 monthly per employee will be tapered down to €420 in Phase 1, and €210 in Phase 2.

Since January 2021, the COVID wage supplement has been based on loss of turnover declared by a business over six months between March and October 2019, against turnover declared over six months between March and October 2020.

When the scheme was first introduced in 2020, it was originally based on a business’ NACE categorisation, a system that was criticised for leaving out businesses significantly impacted by the pandemic.