Millions of Italians are to benefit from the pension reform and the introduction of the citizen income. In the evening, the government decided to implement its central election promises, which cost billions.
Prime Minister Giuseppe Conte presents the measures on so-called „citizen income“ and pension reform, which are the most important factors in increasing the government deficit. In order for the plans to come into force as planned in April, Parliament must approve them within 60 days.
Up to 780 euros for needy citizens
„The government keeps its promises,“ said Conte. Civic income will improve the lives of five million Italians living in poverty, said the head of the 5-star movement, Labor Minister Luigi Di Maio. With a cost of seven billion euros, the resident income was a key vote in the 5-star movement. Unemployed, poor pensioners and especially disadvantaged people can get monthly up to 500 euros plus another up to 280 euros per month as a subsidy for rent or home loan. This should ensure their survival and enable their reintegration into the labor market.
The money is paid in addition to your own income. This means: whoever earns 200 euros per month gets, in the best case, 580 euros. For people with disabilities special rules apply. There are strict income and asset limits. Anyone who owns a new big car is also excluded from payments of the civic income as boat owners. Also, if a family member has quit a job himself in the past twelve months, the whole family will not get any money. Anyone who tries to cheat is threatened with a prison sentence of several years.
This so-called citizen income is therefore not an unconditional basic income, but a kind of basic security. There was no such thing in Italy so far. Despite the strict rules, this could benefit several million people. In theory, they receive three job offers after they apply, one of which they have to accept – in practice, there will only be very few offers in structurally weak areas with high unemployment.
Hundreds of thousands of Italians can retire at the age of 62
The second major reform, the withdrawal of the 2011 pension reform, was an important campaign pledge by the right-wing Lega of Vice-Prime Minister Matteo Salvini. For this year alone, the government in Rome expects additional costs of four billion euros, in 2020 it should be a good eight billion euros.
With the new pension scheme, the government is introducing the „quota 100“. This means that retirement is possible if the age and contribution years together add up to 100. About 355,000 Italians could therefore retire at the age of 62, because they have at least 38 years of contributions together. So far, the legal retirement age for men is 65 years. Women can continue to retire at age 58 if they are employed and have paid pension contributions for at least 35 years. For female self-employed, the retirement age is 59 years. The government hopes that earlier retirement will free young people’s jobs. Unemployment among 15- to 34-year-olds is almost 20 percent.
Italy had delivered a weeks-long dispute with the European Commission over the implementation of the electoral promises in the budget in 2019. For the new Italian government is accepting a significantly higher level of new debt than the previous government and only under pressure to limit the deficit target to 2.04 percent. The country was threatened with an excessive deficit procedure by the Brussels authority. The main criticism is the already existing debt mountain in the amount of a good 131 percent of economic output. Of all countries in the euro zone, only Greece is on a worse rate.
