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MONEY

KEY POINTS: What is Italy’s government doing to help families?

As new statistics show the birth rate continues to fall in Italy, what additional support has been introduced for families in 2024 - and how much difference will it make?

KEY POINTS: What is Italy’s government doing to help families?
Italy has increased funding towards childcare for some families under the 2024 budget. (Photo by LOIC VENANCE / AFP)

Italian Prime Minister Giorgia Meloni presents herself as a “Christian mother” defending traditional family values. But after a year and a half in power, what concrete financial measures has her government taken to support families in Italy?

The 2024 budget approved at the end of December was the Meloni administration’s first real opportunity to follow through with its pledges of support for families.

Amid the cost of living crisis, more financial support for working parents in particular was something many voters were hoping to see.

While the government did allocate more funds to policies supporting families this year, the final draft of the budget turned out to be a mixed bag.

Main budget changes affecting families in 2024:

  • The 2024 budget slightly increased the minimum amounts payable under the universal allowance (assegno unico e universale, a single, monthly means-tested payment that increases with each child.) See more details here.
  • For 2024 only, it also extended a deduction of pension contributions for women who have at least three children to mothers of two children, up until the month that their youngest child turns ten.
  • The maximum amount claimable towards nursery fees under the bonus asilo nido, or ‘nursery school bonus’, was increased for families with two children, one of whom must be born after the start of 2024.
  • A second month of parental leave in 2024 can be taken at 80 percent of the parent’s usual income, instead of the former 30 percent; this will drop to 60 percent in 2025.
  • VAT increased from 5 percent to 10 percent on formula milk and baby food, and from 5 percent to 22 percent on nappies and child car seats.

See a full breakdown of the maternity benefits available in Italy in 2024 and how to apply for them here.

The steep hike in VAT applied to nappies and baby formula has unsurprisingly been controversial, while some of the other measures fell short of what was initially reported based on earlier drafts of the budget law.

With most of the funding allocated to measures aimed at supporting larger families, media reports noted that it was hard to see how the government intended to encourage more young Italians to consider starting a family in the first place.

READ ALSO: The real reasons young Italians aren’t having kids

This has been a hot-button topic in Italian politics for years as the birth rate continues its steady descent. The latest figures from national statistics bureau Istat showed last week that the birth rate was near the lowest on record in 2023, with the number of births per Italian woman dropping further to 1.20, down from 1.24 in 2022. 

Against this backdrop, successive governments over the years have promised to make starting a family more financially viable for young Italians. But while there have been improvements – Italy had no form of child benefit at all until 2020, for instance – the support available to new parents is often deemed inadequate.

While surveys show that a large proportion of young Italian adults would like to start a family, they don’t see it as realistic: the rising cost of living, low and stagnant wages, and widespread workplace discrimination during pregnancy have long been cited as just some of the reasons why people put off having children or have fewer than they would like.

Economists say Italy’s shrinking population – on course to fall by one fifth by 2050 – will soon mean the country must implement either huge tax increases or severe pension cuts.

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For members

PENSIONS

Can you transfer your Italian pension if you move abroad?

If you work in Italy and then move to another country, will you be entitled to an Italian pension - and can you take it with you? The Local asks financial experts how the system works.

Can you transfer your Italian pension if you move abroad?

For those living in another country long-term, future planning around pensions is often a high priority on the list.

Unlike Switzerland, for example, where working for at least one year makes you eligible for a Swiss pension, or the United Kingdom where the minimum contribution period is 10 years, Italian law stipulates 20 years of contributions in Italy to get the minimum pension amount. This rule applies to all workers, regardless of their nationality.

EXPLAINED: How your Italian pension works

So if you’ve worked in Italy and contributed to a pension, what happens to it if you then move back to your home country, or elsewhere?

The Local asked Emilio Martinotti, tax and business consultant at international advisory firm Ecovis, whether or not it is possible to transfer an Italian pension overseas.

Q: Can a foreign national who is eligible for an Italian pension receive it if they leave Italy?

A: “Yes, it’s possible for a foreigner who is eligible for an Italian pension to receive their pension even if they leave Italy. Italy has bilateral agreements with many countries to ensure that individuals can receive their pensions abroad.

“This includes all 27 EU countries, Norway, Iceland, Liechtenstein, Switzerland, Argentina, Australia, Brazil, Canada and Quebec, Israel, the Channel Islands and the Isle of Man, Mexico, Countries of former Yugoslavia, Principality of Monaco, Republic of Cape Verde, Republic of Korea (posting only), Republic of San Marino, the Holy See, Tunisia, Turkey, USA (United States of America), Uruguay and Venezuela.”

Are there any countries where this is not possible? Do some countries not allow people to transfer foreign pensions?

“While many countries have agreements in place to allow for the transfer of pensions, there are exceptions.

READ ALSO: Pensions in the EU: What you need to know if you’re moving country

“Some countries may not allow pensions from other states, or there may be limitations or restrictions on how pensions are transferred. It’s essential to research the specific regulations of both Italy and the destination country.”

What is the procedure the foreign national has to go through to transfer their Italian pension? What documents must they show?

To receive their Italian pension, individuals typically need to apply through the appropriate Italian government agency, such as the National Social Security Institute (INPS).

“Foreigners may need to provide documents such as identification, proof of residency or work history, and any relevant information about contributions made to the Italian social security system.”

Is it the same for employees as it is for freelancers?

The procedure may vary slightly depending on whether someone is an employee, or in the gestione separata (‘separate management’, the INPS scheme used by most partita IVA holders), but the overall process of applying for and receiving the pension is generally similar.”

Is there a cost at all?

“There may be administrative fees associated with processing the pension application, but these costs are typically minimal compared to the benefits received.”

What can people do to make the procedure easier?

“Having all necessary documentation in order and being familiar with the application process can make the procedure easier. Additionally, seeking assistance from knowledgeable professionals or organisations specialising in pension matters can streamline the process.”

When is the foreigner eligible for an Italian pension allowed to draw it? Do they get in when they leave Italy even if they are not at the retirement age? Do they get it for the retirement age of their new country? Or do they get it for the Italian retirement age?

The eligibility and timing of receiving an Italian pension abroad can depend on various factors, including the individual’s age, contributions, and the regulations of both Italy and the destination country.

“Generally, individuals can start receiving their Italian pension when they meet the eligibility criteria, regardless of their location. However, the amount may be adjusted based on factors such as the cost of living in the new country.”

Have you noticed any problems foreign nationals have when they try to get their Italian pension? Is it difficult?

“Some foreigners may encounter challenges when applying for their Italian pension, such as language barriers, unfamiliarity with the Italian bureaucratic system, or difficulty in gathering the necessary documentation.

“While the process can be complex, seeking guidance from experts or organisations experienced in pension matters can help navigate any issues that arise.”

Please note that The Local cannot advise on individual cases. For more information about how Italy’s pension rules may apply in your circumstances, see the INPS website or consult a qualified tax professional.

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