Italy’s Istituto Nazionale di Previdenza Sociale (INPS), the main entity of the country’s public retirement system, will increase minimum pensions this year by 5.4% for people who are employed and self-employed to €598.61 monthly, INPS said in a statement.
Moreover, based on the budget law passed in 2022, pensions with an amount that is equal to or lower than the minimum payment by INPS will receive exceptionally a 1.5 percentage points increase for the year 2023, raised to 6.4 percentage points for people aged 75 or over, and 2.7 percentage points for the year 2024, it added.
The further increase brings the total minimum pension paid by INPS in 2024 to €614.77 monthly, it added.
This year, pensions payouts that are equal to or less than four times the minimum pensions paid by INPS are subject to a full increase in line with inflation, to the extent of 85% for pensions being equal to or less than five times the minimum, and 53% for pensions totalling more than five times the minimum and equal to or less than six times the minimum, according to INPS.
INPS is also applying a revaluation of the allowances for disabled people of 2.01%, and to allowances of pensions granted to former civil and military employees of public administrations, it added.
Last year, the government warned that inflation had a significant impact on public spending, mainly due to the indexation of pensions to inflation, it said in its Update of the 2023 Economic and Financial Document. According to the update, public spending for pensions will increase from €340.56bn this year to €361.24bn in 2026.
This, coupled with a birth rate that has been plunging in Italy over the past years to an historic low, could make efforts to reform the Italian pension system ineffective, finance minister Giancarlo Giorgetti said.
The government has, meanwhile, defined more stringent requirements for early retirement in the budget law for 2024, with pension payments based exclusively on contributions. The amount of pension paid before reaching the statutory retirement age must not exceed four times the minimum pension paid by INPS.