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MGI Studio Pragma

Citizenship income: new opportunities for the employers

30 Jan 2019

Citizenship income consists of a monthly amount for needy individuals and families varying between approx. euro 500 and 1,300 euro per month, depending on the composition of the household, for a maximum period of 18 months per application. The new measure should be implemented starting from the next April. What are the new opportunities per the employers?

The Italian government approved a decree law, linked to the budget law for 2019, providing for a new welfare measure consisting in a form of citizenship-based income integration.
The new measure should be implemented starting from the next April and it is has been estimated than more than 1,5 million of family units will apply for the welfare payment, by virtue of to the funds allocated with the Budget law after heated political debates.

Citizenship income: what is?

Citizenship income consists of a monthly amount for needy individuals and families varying between approx. euro 500 and 1,300 euro per month, depending on the composition of the household, for a maximum period of 18 months per application.
Between the conditions set forth by the law decree to be met for being admitted to receive the welfare subsidy named “Reddito di Cittadinanza“, applicants are required to regularly participate to employment-oriented programs or training courses, and they lose the benefit in the event of unjustified rejection of three consistent job offers.
From the perspective of the employer, the law reform entails certain advantages for companies which hire people being beneficiaries of the welfare payment.

What are the new opportunities for the employers?

Indeed, in case of direct hiring of individuals admitted to the Citizenship Income program with open-ended and full-time employment contracts, provided that they are not made redundant within the first 24 months of employment, companies benefit from a cut on the social security contributions.
More in detail, social security contributions are reduced of an amount equal to the difference between 18 monthly installments of Citizenship Income and the relevant amounts already received by the employee, in a measure not anyhow lower than 5 monthly installments.
However, in case of hiring of women or “disadvantaged” workers (i.e. persons who face serious difficulties to find an employment due their personal situation), the benefit for the employer is increased of one monthly installment and can not be lower than six ones.
In case the individuals are hired through work agencies or qualified training bodies, the cut on social security contributions is shared at 50% with the employing company.
The social security contributions relief can not exceed, on a monthly basis, Euro 780.

What is the process for the social security benefit?

In order to be admitted to receive the social security benefit, the employer must stipulate a specific agreement with the employee and a qualified training body aimed at defining the training or requalification programs structured for each individual.
The social security relief is acknowledged on condition that the incentivized hiring of people beneficiary of the Citizenship Income brings an actual increase of the overall number of employees hired under open-ended full-time contracts (derogations apply in case of replacement for retirement); in order to keep the benefit, the employer can not dismiss these individuals in the first 24 months of employment except for dismissal due to disciplinary or subjective reasons.
It is worth underlining that companies which have been sanctioned due to breaches of health and safety law regulation or missed payment of social security contributions in the three years preceding the hiring are excluded from the aforesaid social security relief.
(IPSOA Wolters Kluwer 28th january 2019)