The Italian government has approved “citizens’ income” and a new pension scheme, marking a major overhaul of the country’s welfare system. The agreed reforms, providing income support for the poor and allowing people to retire earlier, are the centerpiece of the government’s controversial 2019 “people’s budget.” But critics say the policies are unsustainable. The agreement means that, despite having to make some concessions, the two ruling parties get to keep their flagship election promises to voters.
“These are two measures…this government is proud of,” Prime Minister Giuseppe Conte told reporters at a press conference. “This is a government that keeps its promises.”
The bill must now be approved by Parliament within two months, but it is expected to pass easily. The new populist government has turned away from the austerity policies that are currently followed across Europe, saying they do not work, warning that it wants to avoid mass protests like those seen in France and accuse the European Commission of worsening Italy’s economic problems.
Italy “can’t concentrate only on financial stability, we also need to look at social stability,” Prime Minister Giuseppe Conte was cited as saying. “The austerity-oriented recipes of the past few years have failed.”
The country has long lacked the kind of state welfare policies seen in many other European member states. The plan is a new income support for the poorest in Italy. The policy will provide means-tested income support, from 780 euros a month for a single unemployed person to 1032 euros for a family. The government has repeatedly stressed that welfare is available to Italians only and foreigners, if they have been residents of Italy for at least ten years.
Also included are what the government calls “anti-sofa” rules aimed at preventing misuse. These mean unemployed people signing up for the plan will need to undertake training or commit to accepting a job offers potentially anywhere in the country. The party did have to scale back its plans for the scheme dramatically when faced with the reality of Italy’s public finances. The original plan would have cost the state 17 billion euros in the policy’s first year. The revised policy will cost around 7 billion euros this year and will not take effect until April.
It will roll back a deeply unpopular 2011 law, which raised the retirement age to 67 for many Italians and scheduled further increases. Under the replacement law, people will instead be able to retire when the sum of their age (62) and their total number of years of pension contributions (38) adds up to 100.