The Italian government has proposed to introduce a cap on pensions, slightly changing requirements for an early retirement, in a first attempt to reform the pension system to avoid a return to the Fornero Law in 2023.
With the budget law for next year, and the years 2023-2025, the government, led by prime minister Giorgia Meloni, intends to replace the so-called quota 102, which allows for the possibility to retire at 64 with 38 years of contributions, with quota 103, which gives the option to retire at 62 with 41 years of contributions.
However, who opts to retire early, at 62, won’t receive “a pension that is five times higher than the minimum (pension)” until reaching the statutory retirement age of 67, Meloni said yesterday during a press conference. The minimum pension in Italy is around €500.
“Without taking action, from 1 January next year we would have found ourselves in a situation whereby everyone would have retired at 67,” Meloni added during the event yesterday, referring to a return to the Fornero Law.
Under the Fornero Law – named after the former minister of labour and social policies Elsa Fornero – people can retire at 67 with at least 20 years of contributions, and retire early, regardless of age, with at least 42 years and 10 months of contributions for men and 41 years and 10 months of contributions for women.
The government has taken action, Meloni explained, extending the current regime in 2023 but with amendments, giving the option to retire at 62 with 41 years of contribution (quota 103).
The measure taken by government with quota 103 seems therefore transitory, whereas the Fornero Law will continue to apply. A spokesperson for the government declined to comment on whether the Fornero Law will continue to apply in the next few years.
Meloni’s government has also decided with the proposals in the latest budget law to index pensions to inflation based on the amount of benefits received.
For pensions received that are higher than €5,000, meaning 10 times the minimum pension, the indexation stops at 35%, whivh is a lower indexation compared with the indexation for minimum pensions, Meloni explained, adding that this applies mainly to pensions calculated with the old system (sistema retributivo), where the amount of benefits is based on wages received in the last years of work, and not on contributions.
The government has also proposed to extend for next year the ‘Opzione Donna’, allowing women to retire early calculating pensions based on contributions, but changing the rules to give women with two children or more the option to apply for an early retirement at 58, at 59 for women with one child, and at 60 in other cases, according to a government statement.
It has also decided to extend ‘APE sociale’, a benefit paid by the Istituto Nazionale della Previdenza Sociale (INPS) to for example unemployed, or workers who care for relatives with a disability, or employed in strenuous jobs.
“We have extended ‘Ape Sociale’ and ‘Opzione Donna’ with some changes to make the measure more balanced,” Meloni said in the press conference.
The measures included in the proposed budget law will be sent to parliament and the European Commission for approval by the end of the year.
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