In 2025, minimum pensions are expected to increase by 2.7% compared to the minimum rate before the increase (598.61 euros) and 1% due to inflation in 2024, reaching an estimated 620.92 euros. A proposal in the budget includes the possibility of using supplementary funds from employee severance payments (TFR) to allow individuals who have not reached the amount of the social allowance through the contributory system to retire at the age of 67. The expected increase in minimum pensions could range from around 16 euros to just over 9 euros in favor of over 1.8 million pensioners, with a total cost to the state of between 213 and 284 million euros, depending on the final criteria specified. The planned 2.7% increase for 2024 is not canceled but will be extended to 2025 to prevent actual decreases in benefits.
The minimum rate before the increase (598.61 euros) will see a bump due to inflation (1% at the moment), bringing it up to 604.60 euros. This amount will then be subject to a 2.7% increase, resulting in a final pension of 620.92 euros. Essentially, last year’s increase will be maintained and the inflation will be accounted for on top of it. The rules introduced this year for accessing social Early Retirement schemes, such as Ape sociale, Opzione donna, and Quota 103, are expected to be confirmed. Particularly for Quota 103, the strict rules, including the fully contributory calculation for benefits, the limit of four times the minimum rate until reaching retirement age, and the extension of flexible windows, have caused a significant decline in applications.
The proposal to use supplementary funds to reach the social allowance necessary for retiring at the age of 67 for individuals who have only made contributions from 1996 onwards, and are therefore fully under the contributory system, may only benefit a few individuals due to lower-income individuals being less likely to join supplementary pension schemes. The idea of using TFR payments from pension funds to allow retirement at the age of 64 with an annuity at least three times the social allowance seems to have been abandoned due to opposition from the Treasury. There will also be tax incentives for those who choose to continue working despite meeting the requirements for early retirement with Quota 103 and request to have the employee’s contribution quota (9.19%) withheld from their pay, with the pension benefit adjusted accordingly.
Overall, the proposed measures aim to increase minimum pensions by 2.7% in 2025, maintaining the increase from the previous year and accounting for inflation. The possibility of using supplementary funds from TFR payments to reach the social allowance necessary for retirement at 67 would benefit a limited number of individuals. The use of TFR payments from pension funds for early retirement at 64 with a pension at least three times the social allowance seems unlikely due to opposition from the Treasury. Tax incentives for those continuing to work despite meeting early retirement requirements with Quota 103 aim to encourage individuals to stay in the workforce longer before retiring. These measures are part of the broader effort to ensure financial stability in pension systems and provide support for retirees in Italy.
