Italian Government Approves Income Support Scheme For Poor, Pension Reform

ROME (UrduPoint News / Sputnik - 18th January, 2019) The Italian government adopted two major welfare measures � an income support scheme for the poor and a pension reform � which have been the key pledges of its populist governing coalition.

The reforms were approved on Thursday.

The introduction of an income support scheme for the poor, unemployed and elderly people has become a flagship measure. The so-called citizens' income includes monthly benefits of up to 780 Euros ($889) for those who cannot afford to buy a basket of basic goods.

According to the official statistics, there are around 5 million such people in Italy.

The measure has been one of the key election pledges of the anti-establishment Five Star Movement, which has formed the coalition with the right-wing Lega party as a result of the March 2018 elections.

The movement's head, Luigi Di Maio has said that the "citizens' income" will improve living standards for those 5 million people in 60-million-strong Italy, who "got squeezed out like lemons by previous governments.

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The program will be launched in April and will cost the Italian budget 7 billion euros this year.

The pension reform, also backed by the government on Thursday, is expected to allow people to retire earlier depending on their working experience. Thus, the earliest possible retirement age for men will be reduced from 66-67 years by five years, while for women it will be 58-59 years.

The regulations, which have been long sought for by Lega, will be obligatory beginning from April for private firms and beginning from August for public sector companies.

The pension reform is expected to cost the budget 4 billion euros. However, the cost of the program will double in 2020 and again in 2021.

The welfare reforms were approved following a row over Italy's budget between the country's authorities and the European Union. The new Italian government put the 2019 budget deficit at 2.04 percent of the Gross Domestic Product (GDP), instead of initially planned 2.4 percent, provoking Brussels' concerns over Italy's high public debt-to-GDP ratio.