The Italian government has introduced a policy measure to tackle poverty called Income for Inclusion, which has been broadly welcomed by the social partners as being a step towards the social and economic activation of people in poverty.
Background
In October 2017, under Act No. 147/2017, the Italian government introduced a national policy measure to tackle poverty called Income for Inclusion (Reddito di Inclusione, REI). Targeted to overcome poverty, it aims to provide financial support as part of a tailored scheme to help encourage the social and employment inclusion of claimants. REI replaces previous policy measures targeted at specific beneficiaries, such as the Sostegno all’Inclusione Attiva (SIA) and the Assegno Sociale di Disoccupazione (ASDI), and can be used to top up a person’s salary, provided their household’s combined income does not exceed €6,000 per annum. REI is paid for a maximum of 18 months, at the end of which claimants have to wait for 6 months before claiming any new benefits.
Potential claimants have to satisfy several conditions. They have to be Italian citizens, European citizens, or related to an Italian or European Citizen; or they have to have the right of residence or the right of permanent residence, and, if they are not EU citizens they must hold a EU green card or to have been granted international protection (political asylum, or subsidiary protection) and have been a resident in Italy for at least two years before applying for the benefit.
Other conditions stipulate that:
To prevent any abuse of the system, the benefit cannot be claimed by people who have bought specific goods (such as cars or motorcycles) in the year before they apply. Neither can anyone who owns assets such as boats, or similar recreational craft, apply (these categories of goods are considered by law as indicators of living standards not consistent with the people targeted by REI, and which are likely to come from undeclared income).
The REI is composed of two measures. Firstly, it is an economic benefit of an amount depending on the number of household members and their individual incomes. The minimum amount of benefit is €190, with the maximum benefit of approximately €490 for a household that comprises five or more people. It is paid through a special REI card which the claimant uses like a normal debit card. The card can be used to withdraw cash (within a monthly limit and not more than half of the amount granted per month at any one time) to pay for shopping and for gas and electricity bills.
Secondly, it is seen as a pathway to social and employment inclusion. It requires a preliminary assessment of the household members, aimed at analysing the economic situation, employment status and the employability of the applicant, plus their education, training and living conditions. Based on this assessment a personalised programme will be designed to help overcome the applicant’s poor financial situation. This will include:
If it becomes clear that the applicant’s poverty is mainly due to unemployment, the personalised programme will be replaced by other active labour market policies, including intensive job search assistance by the Public Employment Centres. One of the main features of the REI is the fact that the economic benefit is conditional upon the claimant following a personalised programme aimed at their employment and social inclusion.
Although the programme is tailored to an individual, in broad terms it expects claimants to:
It also expects the centres to implement measures laid down by the legislation on active labour market policies and measures for claimants’ health protection.
The law provides for the benefit to be reduced or withdrawn if the applicant does not participate in the activities set out by the programme. Linking the benefit to participation in the programme is intended to discourage beneficiaries from enjoying the income without actively searching for a job. This sort of linkage is applied in all the most recent Italian labour market reforms (such as Law No 92/2012 Legge Fornero; and legislative decrees No. 148/2015 and No. 150/2015 Jobs Act). If any inconsistency is found between an applicant’s declared income and their actual income, two types of sanctions can be applied:
The REI measure has been approved following lengthy lobbying by voluntary organisations, trade unions, employer organisations, in partnership with Italian municipalities and regions called Partnership Against Poverty in Italy (Alleanza contro la povertà in Italia). The partnership was formed in 2013 with the aim of designing and fostering public policies to fight poverty. Its proposal for the creation of a national ‘social inclusion income measure’ largely shared the same approach as the REI, although it was intended to reach much a wider target (everyone in absolute poverty).
Indeed, the measure was defined following the signing, in April 2017, of a Memorandum of Understanding between the government and the partnership over the criteria to be followed for the introduction, implementation and monitoring of the REI. Notably, this represents the first time the government has entered into a Memorandum of Understanding on social policies with organisations other than the social partners.
Trade union organisations, such as the Italian General Confederation of Work (CGIL), welcomed the introduction of the REI, stressing the importance of not reducing it to a mere money transfer, but combining the economic benefit with a personalised pathway for people and household members in order to integrate them into society and employment, assisted by local welfare.
Other trade union organisations, such as the Italian Confederation of Workers’ Unions (CISL), emphasised that the REI alone is not sufficient to tackle poverty if not supported by economic growth, public investments and policies to foster labour market participation, especially by women and young people. CISL stressed that dialogue with and the involvement of the social partners should become key to addressing important issues, such as the new welfare model and the social inclusion of disadvantaged people.
Employer organisations also welcomed the measure, deeming it to constitute a step towards the social and economic activation of people in poverty.