Reissue of bonuses for hiring young people and increase in allowances for the poorest pensioners. These are the most important innovations that the government plans to include in the new budget law. The contours of the measures are yet to be defined, but given the limited room for maneuver on the public finances, it seems unlikely that the two projects can coexist, unless the extent of the interventions drops significantly compared to expectations. In the meantime, we also have to deal with an obligatory expense: the revaluation of pensions in the face of inflation.
3 YEAR BONUS FOR NEW EMPLOYEES AND CUTTING CONTRIBUTIONS
The relief for the hiring of young people launched in 2014 definitively expires in 2018 and the government fears that companies could kick off a wave of layoffs. To avoid the danger it is necessary to re-propose the concessions, even if in a less rich version than in the past.
In an interview with Corriere della Sera, the Deputy Minister of the Economy Enrico Morando spoke of two possible interventions: a contribution bonus of 50% over two or three years for young new permanent employees and a permanent cut in contributions from 33 to 29%, two points in favor of the worker and two points for businesses.
“Also considering the initial 50% contribution reduction, after four years the total cost would be over 4 billion – underlines Morando – And it would rise with the expansion of the number of workers to whom the new rate applies. But it would help businesses, bring more money into the workers' pockets and reduce the tax wedge to the German level in a few years".
As for the age to access the contributory bonus, "we are thinking of a range of 29-32 years - the deputy minister explains - We will decide according to the resources available, but we still don't know how many there will be".
To avoid companies using new hires to replace old "full-contribution" employees, it is likely that the incentives will only be granted to employers who have not laid off in the previous six months. Furthermore, there should also be a ban on the dismissal of new employees affected by the relief, at least for the first 6 months of work.
INCREASE IN LOWER PENSIONS
On the pension front, the hypothesis is circulating in the Democratic Party of dusting off a bonus designed years ago by the Renzi government: 40 euros more each month for the four million "incompetent" retirees, those who do not exceed 8 thousand euros in annual income. In these terms, the measure, according to estimates at the time, would cost two billion. An expense that at the moment seems unsustainable and which will probably only be launched if unexpected treasures emerge in the budget law.
ADJUSTMENT OF PENSIONS TO INFLATION
Instead, there was no discussion on the adjustment of pensions to the cost of living. The (automatic) mechanism is already envisaged by law and will apply to inflation which in 2018 could reach 1,5 percent. But the trade unions, who will meet the government on Wednesday, are asking that a different basket from that of Istat be used as a reference, because the elderly complain of an increase in the cost of living which is higher than what emerges from national data.
In any case, the revaluation of the checks will solve a stalemate that has lasted for years now. In 2011 the Berlusconi government blocked the adjustment of medium-high pensions and the following year the Fornero reform extended the stop to all pensioners. The executive led by Enrico Letta revived the mechanism only for the lowest amounts, a discrimination that was later rejected by the Constitutional Court. The Renzi government was therefore forced into an emergency intervention and launched a one-off payment as compensation for the pensioners who had been excluded from the adjustment. A highly contested measure for the amounts, considered by many to be too low.
