Skip to main content

The Director General has the responsibility to decide to revoke a pension and demand a refund of pensionable funds when the beneficiary of the pension has a capital sum of more than EUR 14,000 in his possession, which goes above the amount of eligibility for entitlement. This was the conclusion of a case in the Court of Appeal by the name of Lawrence Vella vs. Director General of Social Security decided on the 2nd of July 2018.     

The plaintiff held that the procedures in place for the refusal of his pension, and the order of him to repay funds he had received as his pension, did not respect principles of natural justice. The case was an appeal from an arbitration which concluded that indeed the appellant owed the State €764.61, which was money he received in 2015 and which he was not entitled to.

The Court first heard the pleas by the plaintiff who held that his claim was based on three considerations. While he did not deny that the capital sums in his possession had exceeded the amount which entitled him to social security benefits under Maltese law, he stated that he had used the money to repay a debt which he owed to his sister, and that therefore, he was still entitled to receive his pension and did not owe the State the sum ordered by the Director General.

It was firstly stated that he did not feel that the Director General’s decision respected the principle of audi alteram partem, which means that both parties in a case should have the opportunity to defend themselves. It was secondly claimed that the decision taken by the Director General should have followed civil law procedures, meaning that he should have been able to not only provide proof of the payment he made towards his sister, but that he should have also been given the time to adequately explain himself. The third ground of appeal was founded in the recent judgement Carmen Abela v. Direttur Generali tas-Sigurta’ Soċjali. In this judgement, the Court held that it is not necessary for beneficiaries of a pension to put themselves in the position of minorita solvibilita’ to continue to benefit from social security benefits. This means that if a person receives an amount of money that they intend to dispose of for justiciable reasons, it should not bar them from continuing to receive their pension.

The Court looked at the appeal decision by the arbitrator where it was held that the appellant had no proof that he had transferred money to his sister and that the reasons for him borrowing money were for him to visit his son in Australia; a reason which was not deemed as necessity. The Court stated that the opportunity for the appellant to receive an appellate decision by the arbitrator showed that the principle of audi alteram partem was respected and that it was, in fact, insufficient proof which rendered his case dismissed.

With regards to the second ground of appeal, by the plaintiff, the Court commented on the merits of the appeal. It was concluded that the transfer of EUR10,000 happened well after he was informed that he had to repay the State and that his pension was being revoked. The Court also held that the Social Security Act does not bind the Director General to take into consideration whether the capital sums pertain to the repayment of a debt. Once the amount stated by law is lapsed, then the law itself is clear in stating that the pension is to be refused. The Court also linked this to the third claim by the appellant when it stated that in the case of Carmen Abela, the Court emphasised on the importance of the intention of the parties. The appellant in this case never explained why the transfer of the sum to his sister happened after he was notified that his pension will be revoked.

It was, therefore, concluded that the appellant had a fair decision by the Director General, that he had an appropriate opportunity to appeal against the decision and present his evidence, and that his claims were not justified. The court therefore rejected the appeal and ordered all costs to be paid by the plaintiff. The judgement was delivered by Hon Judge Anthony Ellul.

Av. Malcolm Mifsud


Mifsud & Mifsud Advocates

This article may also be accessed on Malta Today

 For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.