For months, precisely since January 2023, millions of Italians have been waiting for the increase in the minimum pensions promised by the government and set by the latest budget law against inflation. The Meloni government made this measure one of its strong points in the election campaign, and the increase was supposed to start at the beginning of the year. However, complications continued to delay operations. Everything seems to be unblocked now: the increases decided by the stabilization law could come in July, along with months of outstanding debt. But time is running out and the conditional is still a must.
The issue of adjusting the pension cuts promised by the government and not yet implemented is just one of the many problems circulating in the “pension yard”. The impasse in reform is now a reality and no acceleration is expected in the coming months. In the autumn, when the foundations for the new budget law will have to be laid (this will be the second law of the Meloni government), perhaps more will be known. Because until then, the executive will have to put the news of 2024 on paper. During the election campaign, the centre-right promised that Fornero reform would end, but with our demographic bias, rewriting would only make the picture worse. The near future, according to experts. Meanwhile, in the Economic and Financial Document (Def), which outlines the next maneuver, there is almost no trace of the money allocated to “overcome Fornero”.
Finding a measure that reconciles common sense, the real needs of workers and financial sustainability will not be easy. And by now it is clear, very clear: it is not even possible to choose a quota of 41 for everyone, neither this year nor most likely next year, because at the moment there is no necessary financial support. Thus, the ambitious pension reform project proclaimed by the centre-right remains a long-term intent or, to put it in the words of key members of the majority, a “legislative goal.” Regardless of age, the league’s horsepower measure, which allows to leave work early with 41 years of contribution, has also been removed from Def, which was developed by the government and published in the past weeks.
Increases in minimum pensions still not seen
There was talk of the impossibility of structural reform in a short time, but “pensions are increasing and will rise”, several government officials repeat. Is it really like that? And if so, since when? We are trying to reassess all inflation controls, adjusting government-promised and yet unfulfilled minimums, and assessing what has been done so far and what has been announced for 2024, between adjustments and debt.
Let’s start with the minimum pensions, because the state aid is primarily designed for the lowest benefits, ie those who receive a pension of 563.74 euros in 2023 or even less. The stated goal is to reach at least 600 Euros for the 75+, this is a kind of pass figure, then move on to the Forza Italia’s much-awaited thousand Euro target in the future. Seems like science fiction right now.
As a matter of fact, an increase of 6.4% is envisaged for retirees over the age of 75. An increase of 36.08 euros this month: so the check will amount to 599.82 euros. Less assistance is provided to those under the age of 75. For Italians in general receiving the minimum pension, the increase will actually be 1.5%, just under 8.50 euros per month in credit (as indicated in the table below).
If the total monthly amount paid is less than the minimum treatment, the increase is accounted for on the basis of the same calculation: ie the increase equals 1.5 points for 2023, increased to 6.4 points for 2023. Those aged 75 and over (see the table below). If the beneficiary turns 75 in 2023, the age of increase is adjusted from the following month.
But why haven’t these small increases yet come? The main problem, it seems, was the hasty drafting of the provision in the budget law allowing for the increases, given the potential mass of beneficiaries who received a minimum amount currently estimated at two million people. Obviously, the time required to determine exactly which retirees actually fall under the minimum regime has not been taken into account; this is a fundamental step to avoid paying increased sums even to those who would not be rightly entitled.
Therefore, we look at July, when interested parties will also receive outstanding debts from January: the estimated cost for the state budget is 480 million euros. But it is not clear because everything needs to be ready in a few days for the raises and debts to be paid by July 2023, because pensions are usually settled on the first day of the previous month.
Between pensions, revaluation and promises in 2024
The 2023 budget then predicted what would happen in 2024 (about 563 euros today) when a new 2.7% increase was required for retirees of all ages, referring to the minimum amount of treatment that the INPS will define for next year. ). Funds for 2024 are 379 million euros. Given that the “physiological” revaluation of all checks will also begin next year, inflation will take care of the rest.
Figures? The extent of the next revaluation is currently unknown, but given a 5.4% inflation forecast for year-end (numbers from Def), we know this will be an intervention that will work at 100%. 2.100 Euros and then in descending order. Added to this is the revaluation adjustment already carried out at the beginning of 2023; however, the difference between the provisional rate (applied by the INPS to adjust pensions to cost of living) and the final rate will be accounted for in checks.
For 2024, the government wants to ensure that disability pensions, hitherto excluded from extraordinary revaluation, can also benefit from the additional increase. Small increases in pensions could also come from tax reform the government has been working on recently to find a balance. With the tax reform, Irpef rates will be revised and this should lead to a reduction in income taxes, with also minor benefits in the net pension. Among the hypotheses that have emerged so far is one that combines the first and second income brackets, yielding up to 28,000 euros at a rate of 23 percent. This guarantees a net increase in pension between 20 and 260 euros per year.
Keep reading on Today.it…
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.