Social Security Act (Cap. 318), article 116

116. (1) If any employer or a self -employed or self-occupied person or a person in respect of whom the provisions of article 13 apply fails or neglects to pay within the prescribed time any C lass One or Class Two contributions, as the case may be, which he is liable under this Act to pay, a further contribution equivalent to - (a) 10% of the total value of such unpaid contributions, in respect of contributions due under this Act at any time prior to the 3rd July, 1989; and (b) 5% of the total value of such unpaid contributions, being contributions due under this Act in respect of any period after the 2nd July, 1989, but prior to the 3rd January, 2000; and (c) 1% per month of the total value of such unpaid contributions being contributions due under this Act in respect of any period after the 2nd January, 2000; and (d) 1% per month of the total difference obtaining from the rate at which such contributions were paid and the applicable rate due at the time when such contributions were due in accordance with the provisions of this Act, in respect of any period after the 2nd January, 2000, shall be due and payable to the Director: Cap. 372. S.L. 372.28. Provided that as from 1st January 2026 the further contribution referred to in paragraphs (c) and (d) of this sub- article shall be substituted by interest per month as provided for in a rticle 44(2A) of the Income Tax Man agement Act and the Income Tax (Rate of Interest) Rules , of the total difference obtaining from the rate at which such contributions were paid and the applicable r ate due at the time when s uch contributions were due in accordance with the provisions of this Act: Provided further that in the case of a self-employed or self- occupied person, or a person in r espect of whom the provisions of article 13 apply, who proves to the satisfaction of the Directo r that at the time when such contributions were due he was abroad or hospitalised, the aforesaid prescribed time shall be extended t o the 31st day of his return to Malta or discharge from hospital, as the case may be. Cap. 12. (2) Where any such employer or per son as is referred to in sub- article (1) fails to settle his contribution dues together with the aforesaid further contribution within three months of the afore said prescribed time the Director may, without prejudice to any othe r right competent to him, by means of a judicial letter served on the person by whom such contributions or further contributions are due, claim such payment, and upon the service of such a judicial letter, the claim of the Director contained in such judicial le tter shall, after the lapse of ten days from such service, constitut e an executive title for the purpose of Title VII of Part I of Book Second of the Code of Organization and Civil Procedure , unless the person SOCIAL SECURITY [CAP. 318. 115 against whom it is served shall, within the said period of ten days or such further period being not more than thirty days, as the competent civil court may on just cause being shown determine, by means of an application against the Director before the compete nt civil court, challenge such claim, to which the following provi sions of this sub-article apply: (a) the application shall, under pain of nullity, state clearly and concisely the nature of the complaint, the facts out of which the complaint arises, and the reasons why such complaint should be upheld; (b) the applicant shall attach t o the application all such documents in support of his claim as it may be in his power to produce and shall indicate in his application the names of all the witnesses he intends to produce stating, in respect of each, the proof which he intends to make; (c) the court shall, without delay, set down the application for hearing at an early date, which date shall in no case be later than thirty days from the date of the filing of the application; (d) the application, and the notice of the date fixed for hearing, shall be served on the Director without delay, and the said Director shall f ile his reply thereto within fifteen days after the da te of the service of the application; (e) the Director shall, in his reply, state clearly and concisely whether he agrees to the facts set out in the application, and the reasons why he objects to the claim; he shall moreover state in his reply the names of the witnesses in support of his reasons and shall attach thereto all the document s in support thereof; (f) on the day fixed for the hearing of the application, the court shall consider the issu es of fact and of law as are ascertainable only from the application, reply or documents filed, by either of the parties, or from the evidence indicated by either of the parties in the application or reply, as the case may be, or from the oral pleading of either of the parties; (g) the court shall hear the application to a conclusion within five working days from the date fixed for the original hearing of the application, and no adjournment shall be grant ed except either with the consent of both parties or for an exceptional reason to be recorded by the court, and such adjourned date shall not be later than that justified by any such reason; Cap. 12. (h) saving the preceding provisions of this sub-article, the provisions of the Code of Organization and Civil Procedure relating to proceedings before the First Hall of the Civil Court shall apply in relation to any such application. 116 CAP . 318.] SOCIAL SECURITY (3) Notwithstanding the provision s of any other law, the claim of the Director of any amount due by way of any Class One or Class Two contribution under this article shall constitute a privileged claim in the case of a Class One contribution, ranking equally with wages of employees over the assets of the employer , and, in the case of a Class Two contribution, over the estate o f the self- employed or self-occupied p erson concerned and shall be p aid in preference to all other claims (excluding wages) whether privileged or hypothecary. (4) For the purposes of this article, a notice by the Director t o any employer or a self-employed or self-occupied person showing the number and the amount of contributions which such employer or self-employed or self-occupied person has failed or neglecte d to pay shall, unless the contrary i s proved, be sufficient evidenc e that the amount in the said notice is the amount due to be paid to t he Director by the employer or the self-employed or self-occupied person concerned. (5) Without any prejudice to the foregoing provisions of this article, where a self-employed or self-occupied person fails to pay any contribution due in accordan ce with the provisions of this Act, or pays a contribution at a rate , or at a category, or of a cla ss which is not in accordance with the provisions of this Act: ( i ) a n y c l a i m b y t h e D i r e c t o r f o r t h e p a y m e n t o f such unpaid contributions, or for the payment of any difference due by way of adjustment in the rate, category or class of contributions, shall be barred by the lapse of thirty years; and (ii) any request by the self-employed or self- occupied person to pay such contributions, or any request for any refund that may result as a result of an adjustment in the class or category paid shall be deemed null and void if submitted after attainment of pensi on age or after the lapse of five years from the time when the proper rate of contribution was due, whichever is the earlier: Cap. 372. S.L. 372.28 Provided that in the case of a person born on or after 1 st January 1962, any contribution pa yable in terms of this article shall be subject to interest per month as provided for in article 44(2A) of the Income Tax Management Act and the Income Tax (Rate of Interest) Rules : Provided further that, notwithstanding the provisions of this sub-article, the following shall apply where a request by the s elf- employed person to pay such unpaid contributions is made by a person who, during the period in which such contributions were not paid, was a member of a religious order, was living in Malta an d no contribution was payable by him under this Act: (i) such request shall be deemed valid if submitted after the lapse of five years from the time when the rate of proper contribution was due; and (ii) the contribution for such period only shall be payable at the relevant SP rate applicable at the SOCIAL SECURITY [CAP. 318. 117 time as indicated in Part II of the Tenth Schedule: Provided further that, notwithstanding the provisions of this sub-article, with effect from 1st January, 2015, a person who h as attained the age of 59 but not yet reached the age of 65 and wh o is engaged in a gainful occupation or a self-occupation, has the o ption to pay up to five years of arrears of Social Security Contribution s at the value of the SA rate as per Part III of Schedule 10 during the year when the claim is made: Provided further that such option may also be granted to a person who has attained the age of fifty-nine (59) years and is in receipt of an Invalidity Pension in accordance with the provisi ons of article 26, or is in receipt of a Carers Allowance, Increased C arers Allowance or Carers Grant in accordance with the provisions of article 68 when the claim is made: Provided further that such option may also be granted to a person who has attained the age of fifty-nine (59) years but ha s not yet reached the age of sixty-five (65 ) years who is not engaged in insurable employment or self-occupation, if by virtue of such payment of contributions such person has a minimum of ten (10) years paid contributions to qualify for a pension in accordance with the p rovisions of this Act: Added by: VII.2019.36. Provided further that, notwithstanding the provisions of this sub-article, with effect from 1 st January 2019, a person providing a document to the satisfaction of the Director, indicating employ ment in Libya but never provided a document of the payment of social security contributions in Libya after the 6th May 1988, shall pay, if the person so elects, such social security contributions for a period of ten (10) years arrears at the rate of the SA category as per Part III of Schedule Ten, during th e year when the claim is made: Added by: VII.2019.36. Provided further, with effect from 1st January 2019, a person providing an official document to the satisfaction of the Direc tor, indicating payment of social security contributions in Libya af ter the 6th May 1988, such contributions are converted into contributio ns in accordance with the provisions of this Act for the respective y ear: Provided further that, notwithstanding the provisions of this sub-article, the person from whom a portion of contributions ha s been transferred shall have the option to ask to pay back the amount of social security contributions tra nsferred in accordance with su b-article (6) of article 8, or in accordan ce with sub-article (4) of arti cle 10, or in accordance with sub-article (6) of article 16, which contributi ons shall be paid at the value of the SA r ate of a self-employed person a s per Part III of the Tenth Schedule applicable during the year withi n which the claim is made. Exemption. Added by: VII. 1998.2. Substituted by: I. 2012.15.