The government’s proposals (and the changes now)

Our reporter reports

Six months, i.e. one term, of severance pay accumulated by the employee in the company will be automatically transferred to the pension fund, if the employee does not expressly object. The proposal has been signed by the Minister of Labour, Marina Calderone, and should be agreed by the government and included in the next budget. The aim is to re-start the supplementary pension, the second leg of the Italian pension system. The minister himself, speaking at the Rimini conference, confirmed that discussions are ongoing with the Ministry of Economy on social security. In fact, from the point of view of public finances, the mechanism of implied consent will not have a significant impact. If there is a problem, it could be for small and medium-sized companies with less than 50 employees, which can still count on financial help, since the severance pay of workers who have not opted for the pension fund remains in their coffers. For large companies with more than 50 employees, the severance pay not included in the pension fund will be automatically transferred to the INPS. Even the trade unions will not oppose this measure. It is one of the issues on which there is practical agreement at the negotiations on the reform of social security, which have been suspended for a year. In short, the mechanism already tested in 2006 will be replicated, with workers being asked from January to June to choose whether to participate in the supplementary pension scheme and, in the event of failure to act, severance pay being compulsorily transferred to the fund.

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With this move Calderone is also, in part, a response to a proposal recently made on behalf of the League by his deputy minister Claudio Durrigon. A proposal to “mandatory” pay to the same pension fund 25% of the severance pay due to company employees. However, the social security chapter still needs to be written. As well as almost the entire exercise, it remains to be known how much financial coverage it can count on. At the Rimini meeting, Calderone and Infrastructure Minister Matteo Salvini confirmed that the priority of the next budget law will be to confirm the reduction of the contribution wedge. For the next financial measures, Salvini explained that “the priority is to be able to maintain the massive tax cuts for employees implemented last year”, which means “more than 13 million workers with investments of more than 10 billion euros, with a net income increase of even more than 100 euros per month in wages.”

Confirmation

Calderone and Salvini agree on another point: the confirmation of relief for families. Starting with the bonus for mothers with at least two children. The minister recalls that in this case it is an experiment that lasts one year, while the total contribution reduction for mothers of three children (capped at 3,000 euros) lasts three years and is therefore already funded. Will the experimental bonus be confirmed? Of course, we will once again have to deal with the available resources, but the government does not seem willing to go back on the birth rate measure. On the contrary. The Minister of Labor also aims to obtain the confirmation of the tax exemption measure for company benefits and performance bonuses for families with children. The first scenario involves raising the tax exemption thresholds related to fringe benefits for the current year: up to 1,000 euros for all employees and up to 2,000 euros for those with dependent children (including illegitimate children). In addition, until the end of the year, the tax exemption remains in force, with a flat tax of 5% on performance bonuses. Calderone will also push for the confirmation of this measure. In short, despite “cautious” waiting to know the trends in public finances, both Calderone and Salvini say they are ready to ask for the “confirmation” of all childcare benefits. It was also a response to the birth rate alarm raised by Fabio Panetta, President of the Bank of Italy, at the meeting.

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