Facilitated graduation redemption 2024, the INPS news

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By John

The facilitated redemption of the degree in 2024 presents itself as a significant opportunity for advance access to retirement, while maintaining specific rules and restrictions. This process does not consider years of study outside the course and allows you to redeem only the period necessary to satisfy specific contribution requirements. The redeemable duration runs from the start of the course to its legal conclusion, offering considerable flexibility to applicants.

The redeemable qualifications include three-year, master’s, specialist or single-cycle degrees, and research doctorates, while master’s degrees and foreign qualifications recognized by the Ministry of the University are excluded.

Who is entitled to it, costs and redemption options

Anyone who has paid at least one social security contribution can request redemption, with specific procedures for the unemployed. The cost varies based on the year of graduation and the pension calculation method, with a time limit of 1 January 1996. There are two main methods: the salary calculation and the contribution calculation, each with its own specificities and conditions. Starting from 2019, subsidized redemption is available at a fixed and reduced cost, with particular considerations for those who completed their studies before 1996.

Penalty, payment and tax advantages

The subsidized redemption, although economically advantageous, can lead to a reduction in the pension allowance and has an annual contribution limit. Payment can be paid in installments up to 120 installments, and special conditions exist for public employees. The redemption also offers tax benefits, being deductible from taxable income.

The contribution to be paid changes in relation to the rules governing the payment of the pension with the contributory or salary-based system.

1. Redemption in the contributory system:

To redeem periods that are included in the contributory system (i.e. from 1 January 1996) the burden is determined by applying the contribution rate in force on the date of submission of the application to the salary (subject to contributions) in the least remote 12 months, going backwards from the month in which the redemption request was submitted.

Example Ordinary contribution calculation

Let’s assume that you want to redeem four years of graduation from 2002 to 2006 in the employee pension fund of the compulsory general insurance and that you submitted a redemption request on 31 January 2021; considering a gross salary for the last 12 months equal to 32,170.00 euros, the amount to be paid to redeem four years is equal to 42,464.40 euros (32,170.00×33% =10,616.10 x 4 years = 42,464.40).

Facilitated graduation redemption

With the facilitated degree redemption the cost instead is determined on the minimum for artisans and traders in the year of submission of the application and based on the rate of calculation of pension benefits, in the same period, in the Employee Pension Fund (FPLD).

Therefore, if you apply in 2021 the cost to redeem one year of the course is equal to 5,264.49 euros. The cost is the same if you apply as an unemployed person. Depending on the case, with facilitated redemption the savings can be up to 70%.

2. Redemption in the remuneration system:

To redeem periods that are included in the remuneration system, the amount of the sum to be paid varies in relation to age, the period to be redeemed, gender, total contributory seniority and wages in recent years.

You will be able to take advantage of the facilitated redemption (even for courses prior to 1996) only if you choose the payment of the pension with the entirely contributory calculation.

What can be redeemed?

You can redeem the periods corresponding to the duration of the legal university study courses following which you obtained one or more qualifications issued by universities or university-level institutes:

  • university diplomas (courses lasting no less than two years and no more than three)
  • bachelor’s degrees (courses lasting no less than four years and no more than six)
  • specialization diplomaswhich are achieved after graduation and at the end of a course lasting no less than two years
  • research doctorates whose courses are regulated by specific legal provisions
  • three-year degree, specialist degree and master’s degree
  • diplomas issued by Institutes of Higher Artistic and Musical Education (AFAM).

Years not in progress are excluded. It is also possible to redeem only a part and not the entire course of study.

What is meant by facilitated redemption?

Facilitated redemption means a new method of calculating the redemption burden for periods that fall within the pension contribution system. This new method was introduced in 2019 and unlike the ordinary methods, the burden is calculated taking as reference a conventional salary that is the same for everyone (minimum taxable level for artisans and traders in force in the year of submission of the application, equal to 15,953.00 for 2021) and the calculation rate in force in the Employee Pension Fund (equal to 33%). So, if you apply in 2021 and choose the so-called subsidized calculation, the cost to redeem one year the price is equal to 5,264.49 euros.

Only if you choose the payment of the pension with the entirely contributory calculation (for example as a result of the option to the contributory system pursuant to article 1, paragraph 23, of law no. 335/1995), will it be possible to take advantage of the facilitated redemption even if the degree course periods are prior to 01/01/1996.

How much does it cost to redeem the degree from “unemployed”?

You can request redemption of your degree course even if you are unemployed. The burden is determined in the same way as the so-called facilitated redemption, therefore calculated on the minimum annual taxable level expected for artisans and traders in force in the year of submission of the application (€15,953 for 2021) and based on the calculation rate of the pension benefits in force, in the same period, in the Employee Pension Fund (FPLD). Therefore, if you apply as an unemployed person in 2021, the cost to redeem one year of the course is equal to 5,264.49 euros.

How do you ask the question?

The application can be submitted exclusively electronically, through one of the following channels:

  • www.inps.it with the following path: “Performance and services” > “Services” > “Ransoms – reconjunctions portal” (with access via SPID – Public Digital Identity System or National Services Card or electronic identity card 3.0)
  • Institute patronages and intermediaries
  • Multi-channel Contact Center, by calling the toll-free number 803 164 from a landline or 06 164164 from a mobile phone, for a fee based on the telephone operator’s tariff plan.

Are the redeemed periods useful for the purposes of the right or even for the calculation of the future pension?

Yes, the redemption of the university course of study is valid for the purposes of the right and amount of the pension.

For redemption periods that occur after 31/12/1995 (or for those placed before if you opt for the entirely contributory calculation of the future pension) the amount paid as redemption will be part of the contribution amount on which it will be calculated the pension with the contributory calculation system.

For study periods prior to 1996, the redemption increases the portion of the pension calculated with the remuneration system, i.e. that part of contributions whose return will be linked to the average of the income from work achieved in the last years of working activity.

To whom is the contribution for the redemption charge paid?

The contribution for the redemption charge is paid to INPS. Subject to specific sector provisions, generally the fee is paid through the PagaoPa payment circuit. The PagoPA Payment Notices can be paid:

  • online from the website www.inps.it with the service “PagoPA online payment”. You log in with your identification credentials from the navigation path: Services and services >Services > Payment portal > Redemptions, reunifications and annuities” and you can pay by credit card, debit card, direct debit and other payment methods.
  • through both physical and online channels of banks and other PSPs (Payment Service Providers), such as:
  1. bank agencies
  2. PSP home banking (recognizable by the CBILL or pagoPA logos)
  3. authorized ATMs of banks
  4. merchants affiliated with PSPs participating in the pagoPA system (bars, newsagents, bookshops, tobacconists, pharmacies and supermarkets)
  5. post offices.

The list of payment channels is available on the pagoPA system website at www.pagopa.gov.it

You can also pay in installments with direct debit from your postal or bank account (authorization to debit current account

The cost of redeeming the degree can be paid in a single payment or in interest-free monthly installments for a maximum of 120 instalments.

What are the benefits?

The redemption has undoubted advantages:

  • It allows you to acquire contributory seniority often placed in a remote period and in this way, and subject to future legislative changes, it could lead to an advance in the maturation of the right to a pension;
  • Increases the size of the pension
  • Interest-free installments are envisaged for ten years
  • The redemption contribution is tax deductible. For the unemployed, the parent who bears the burden of redeeming the years of study is guaranteed the right to deduct the cost by 19% from their gross tax

Are study periods abroad also valid?

Yes. University qualifications obtained abroad can be redeemed if they have been recognized by Italian universities or, in any case, have legal value in Italy. Qualifications obtained in a foreign country adhering to the Lisbon Convention of 11 April 1997 (Convention on the recognition of qualifications relating to higher education in the European Region), are redeemable upon recognition of the same “for social security purposes” by the Ministry of University and Research.

Can a simulation be done to calculate the burden?

Yes, there are two different simulation applications.

Since September, a new online service has been available which facilitates users in becoming aware of the effects of exercising the right to redeem a university course of study for pension purposes. It can be used with any mobile or fixed device (PC, tablet or mobile phone). The service is freely accessible by users, as no credentials are required for its use, and can be reached on the INPS institutional website, via the path: “Services and services” > “Services” > “Graduation redemption – Simulator”. At the moment the simulator is available for users who are unemployed and for those who fall entirely within the contributory calculation system of the future pension as the periods subject to redemption and the working period are after 1995. It is an interactive service: of the insertion of a few, completely anonymous data requested from the user, provides information, in accordance with current legislation, on the various types of degree redemptions available for the various user segments (subsidised, unemployed, ordinary), on the possible tax advantages deriving from the payment of the burden and presents an indicative simulation of the cost of the redemption, its installment plan, the starting date of the pension (with and without redemption) and the estimated pension benefit resulting from the payment of the burden.

The second simulator is available within the application for the electronic submission of the degree redemption application and can be accessed via authentication credentials (SPID, CNS, CIE); allows the simulation in all managements (public and private) of the burden to redeem a period of studies placed entirely in the contributory system; for those enrolled in the employee pension fund and in the special management of artisans, traders, direct farmers and sharecroppers, the function has also been extended to periods in the remunerative and mixed systems.