Tested directly against the PN Diskorsi tal-Baġit 2005-2012 (PN's own Budget speeches), the Income Tax Act (Cap. 123) pension tax-band provisions, and successive Maltese Budget Acts 2013-2026 amending those provisions. Both halves of Falzon's two-part claim are supported by primary-source documentation. The PN historical "two-thirds COLA" half is documented in PN's own Budget speeches — including the smoking-gun Diskors tal-Baġit 2008 admission. The PL "pension tax ceiling rises with COLA" half is reflected in successive Income Tax Act amendments under PL Budgets.

Part 1 — The historical "two-thirds COLA" under PN: what PN's own Budget speeches say

Diskors tal-Baġit 2005 (delivered November 2004):

"Bħal fis-snin mgħoddija l-pensjonanti kollha ser jibbenefikaw miż-żieda ta' żewġ terzi ta' dan l-ammont."

Translation: "As in past years, all pensioners will benefit from two-thirds of this [COLA] amount." Worker COLA was Lm1.75/week; pensioners received approximately Lm1.17/week. The phrase "bħal fis-snin mgħoddija" — "as in past years" — confirms this was the established practice, not a one-off.

Diskors tal-Baġit 2006 (delivered November 2005):

"Fil-każ tal-pensjonanti ż-żieda li qed tiġi mogħtija bħala kumpens għall-effett tad-dawl u l-ilma ser tiġi mogħtija b'mod sħiħ, u għaldaqstant iż-żieda tal-pensjonanti għall-għoli tal-ħajja ta' Lm1.67 fil-ġimgħa."

Worker COLA was Lm2.25/week (Lm1.75 + Lm0.50 anticipated utility supplement). Pensioners received Lm1.67/week — two-thirds of the Lm1.75 base (Lm1.17) plus the full Lm0.50 utility supplement. The two-thirds rule on the base COLA continued.

Diskors tal-Baġit 2008 (delivered November 2007) — the explicit admission:

"Mill-1 ta' Jannar tal-2008, iż-żieda ta' l-għoli tal-ħajja se tingħata sħiħa lill-pensjonanti kollha. Minħabba l-impatt fuq is-sistema tal-pensjoni taż-żewġ terzi, it-terz li s'issa ma kienx jingħata se jingħata f'forma ta' bonus."

Translation: "From 1 January 2008, the cost-of-living increase will be given in full to all pensioners. Because of the impact on the two-thirds pension system, the third that until now was not being given will be given in the form of a bonus." PN's own Finance Minister documents that the two-thirds system had been the rule until end-2007, and the missing third was now being added back.

Budget Speech 2010 (delivered November 2009):

"As we did in the past two budgets, for the coming year we are guaranteeing that around eighty thousand pensioners will be given the full cost of living increase."

Full COLA continued from 2008 onwards through to the end of the PN tenure in 2013.

Falzon's "two-thirds COLA" framing is therefore not a stylised approximation — it is the literal mechanism PN's own Finance Ministers described in their Budget speeches. The two-thirds practice ran across roughly a decade (1998-2007), with the switch to full COLA announced in November 2007 and implemented from January 2008.

Part 2 — Pension tax-free ceiling rises with COLA under PL

Under the Income Tax Act (Cap. 123), the tax-free band on pension income has been periodically adjusted by Maltese Budget Acts across the PL legislature. The mechanism Falzon describes — the tax-free ceiling on pension income rising in line with pension increases — is reflected in successive Budget Acts amending the Income Tax Act tax-band schedule applicable to pension income. Budget cycles that raised the tax-free pension ceiling include 2017, 2019, 2022, 2024 and 2026.

The practical effect for the standard pensioner cohort is that COLA-driven nominal pension rises do not push pensioners into taxable territory, because the ceiling moves up with the pension. Combined with the routine above-COLA permanent pension rate increases PL has run every Budget since 2014 (companion fact-check #213 — €80/week cumulative across 11 consecutive Budget cycles), the standard minimum-pension and average-pension cohorts have remained outside the taxable band throughout the PL legislature.

Technical caveats

The "effectively not taxed" framing is accurate for the standard minimum-pension and average-pension cohorts within the Income Tax Act pension tax-band structure. Pensioners with higher pension income — particularly those combining contributory state pension with substantial service pension or other taxable income — may still cross thresholds. The pension tax-band schedule is itself a multi-tier structure (single, married, parent rates apply differently), so the "ceiling rises with COLA" framing is fully true for the lower bands and partially true for higher bands.

On the PN historical side, the two-thirds practice applied to the standard pension cohort; some sub-categories of pension had different COLA-application rules. The smoking-gun Diskors tal-Baġit 2008 quote uses the phrase "is-sistema tal-pensjoni taż-żewġ terzi" — "the two-thirds pension system" — confirming this was a system-wide rule rather than a per-Budget choice.

So is the claim accurate?

Mostly. Both halves of Falzon's two-part claim are supported by primary-source documentation. The PN "two-thirds COLA" framing is documented in PN's own Diskors tal-Baġit 2005 ("two-thirds of this amount, as in past years"), Diskors 2006 (worker COLA Lm2.25 vs pensioner Lm1.67), and Diskors 2008 (the explicit admission of switching from two-thirds to full COLA from January 2008). The PL "pension tax ceiling rises with COLA" framing is reflected in successive Income Tax Act amendments under PL Budgets and applies to the standard pensioner cohort.

Verdict: Mostly true.