Meloni’s inclusion allowance worsens poverty in Italy, Commission warns

6 months ago 36

Meloni’s inclusion allowance will increase the incidence of both absolute and child poverty, concludes a European Commission analysis – deemed as “partial” by the Italian government – which also highlights Italy’s significant gap with the EU on various employment indicators, including long-term employment, wage growth, and the poverty rate of those in work.

The Inclusion Allowance comprises a supplement of between €6,000 and €7,560 a year for families in which one member has a disability, is a minor, is at least 60, is in an adverse situation and is included in an official care and assistance programme.

A recent analysis by the European Commission, conducted as part of the European Semester, sheds light on the scheme’s impact.

It suggests that the measure will increase absolute and child poverty rates by 0.8 and 0.5 percentage points, respectively, compared to the previous income support scheme.

Despite some positive aspects, the Commission states that restrictions on the eligibility criteria for the benefit will limit its effectiveness by restricting access to the allowance to specific demographic categories within family units.

The Commission’s report refers to simulations carried out by the Bank of Italy using a static model. According to these simulations, the inclusion allowance would reduce the number of beneficiary families by 40% for families with Italian citizenship and 66% for families with other citizenships.

The executive also raises concerns about employment, which lags behind the EU average.

Despite modest improvements in 2023, Italy maintains one of the highest shares of fixed-term contracts in the EU (16.5% compared to the EU average of 12.9% in 2022) and a high prevalence of involuntary part-time work (57.8% compared to the EU average of 21.5%), which mainly affects women.

Brussels is also scrutinising Italy’s wages, which remain “structurally low”. Nominal wage growth of 12% between 2013 and 2022 is half the EU level of 23%, and the purchasing power of wages has fallen by 2%, compared with an increase of 2.5% in the EU.

In 2022, Italy’s at-risk-of-poverty rate among employed individuals ranked among the highest in the EU at 11.5%, compared to an EU average of 8.5%.

“We have long expressed strong concern about this government’s policies on combating poverty, and the European Commission’s judgement, unfortunately, confirms our assessments. We renew our call to the government and Minister [of Labour and Social Policies Marina Elvira] Calderone to reconsider their stance and to initiate a dialogue,” wrote Santo Biondo, a member of the national secretariat of UIL, the Italian Trade Union Confederation.

The Italian government quickly disputed the Commission’s analysis, arguing that the EU study was static and partial, failing to consider the activation dynamics generated by the new measures and the growth in employment in Italy.

“The effects of the active policies introduced by the government cannot be fully evaluated on this basis, as the Citizenship Income has been replaced not only by the Inclusion Allowance but also by the Support for Training and Work (Sfl), which plays an essential role in employment support,” the government commented.

However, Maurizio Franzini, professor of economic policy at Rome’s La Sapienza University and a member of the Inequality and Diversity Forum Assembly, told Euractiv Italy: “The model used by the Commission only takes into account the more restrictive criteria for access to the Inclusion Allowance. Those without access to the previous income support scheme could be ‘pushed’ to seek employment, moving out of poverty thanks to the income.”

“The government complains that these effects are not considered, but it is certainly not easy to estimate their magnitude now. The reasons for doubting that they are sufficient to offset the negative effect of stricter requirements are not lacking. The main one is, perhaps, that surveys of the characteristics of recipients of the CCR show that many are not employable. But reliable assessments need to wait,” he concludes.

(Alessia Peretti | Euractiv.it)