Pension revaluation 2024, the extension of Quota 103 confirmed: here’s what changes

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By John

The government plans “micro” interventions on the pension system, with a desired budget of less than 800 million euros, which could require new resources through the tightening of the rules for revaluing pensions with respect to inflation. In January, INPS applied different revaluation rates depending on the amount of the pension: full revaluation (100%) for pensions up to 2,101.52 euros, and decreasing percentages for higher amounts.

For example, pensions above 2,101.52 euros saw a revaluation of 5.7%. Various percentage increases have been applied to increasing pension income bands, with the appreciation decreasing as the pension amount increases. Maintaining this system would cost 13 billion, therefore, the government is considering the possibility of further reducing revaluations to obtain the necessary resources for the projects.

The repercussions of the changes to the pension indexation rules for 2023 and 2024, introduced at the end of the previous year, will manifest themselves in a loss of purchasing power of between 7.5% and 9%, says Alberto Brambilla, president of the Social Security Itineraries study centre. Therefore, the Italian Confederation of Managers and High Professionals (Cida) took legal action against the government. Similarly, Uil also initiated legal action last July to keep attention alive to what it considers to be an injustice, affecting around 3.5 million pensioners, especially in the context of a significant increase in inflation, as previously highlighted by the union.

Modest increase in minimum allowances

After a majority summit, Palazzo Chigi announced that the 2024 maneuver will be “serious and in the context of the sustainability of public finances”, focusing on medium-low incomes and pensions. Despite the government’s promise, previously emphasized by Silvio Berlusconi, to increase minimum pensions from 600 to 1000 euros by the end of the legislature, this option is currently not actively considered. However, based on a generic statement from Palazzo Chigi, it seems that there may be consideration of a modest increase in the minimum allowances, potentially bringing them to 650 or 670 euros. Naturally, this possibility will also depend on the resources available and the cautious approach adopted by the Minister of Economy, Giancarlo Giorgetti.

«The government has placed top priority on lower incomes and pensions to counteract the negative effects of inflation, on the reduction of taxes through the confirmation of the cut in the tax and contribution wedge and the anticipation of the Irpef reform envisaged by the fiscal delegation, measures for the family with incentives for birth rates and working women, significant resources for the health sector and renewals of public sector contracts which have long since expired”. This is what we read in a note from Palazzo Chigi at the end of the first meeting with the social partners on the maneuver.

The extension of Quota 103 for 2024 has been confirmed

The extension of Quota 103, which allows retirement at 62 years of age and with 41 years of contributions, is confirmed for the whole of 2024, with an expected cost of around 1.2 billion euros. Although the measure was originally due to end this year, it will be extended for a further year. Although a possible stabilization of the measure was discussed, the Accounting Office’s report highlights that the permanent implementation of Quota 103 would lead to an increase in spending in relation to GDP, estimated at 8.4 percentage points compared to the current legislation, equal to over 170 billion euros in 50 years.

The hypothesis of part-time early retirement vanishes

The hypothesis of introducing a part-time early retirement mechanism in Italy seems less likely in light of recent discussions. This system, already tested in Northern European countries such as Norway and Sweden, allows a progressive reduction in working hours, compensated by an equivalent pension allowance, until the ordinary retirement age is reached. If implemented in Italy, the mechanism could favor a generational relay, encouraging the entry into the labor market of young people under 35 years of age, while allowing older workers to progressively transfer their skills to new recruits during the reduction phase work commitment.

Women’s option towards the expansion of the audience

The “Women’s Option” measure, currently confirmed and potentially subject to an expansion of the beneficiary group after the restrictions imposed by the latest budget law, allows female workers, both in the public and private sector, with 35 years of accumulated contributions by 31 December 2022 and 60 years of age, to access the pension. These requirements are more rigorous than those previously envisaged, which established a retirement age of 58 for public employees and 59 for private ones, with some reductions foreseen for mothers. The Meloni government is considering the possibility of returning to the old rules, as suggested by the Minister of Labor Marina Elvira Calderone, although this choice involves significant costs. At the same time, another proposal was put forward: the introduction of a “Quota 84” for women, allowing retirement at 64 years of age and 20 years of contributions.

Uil: 3 billion planned for healthcare, nothing for social security

In the budget “there are 3 billion for healthcare, which are not enough: healthcare must be safeguarded because it concerns people’s lives”. The confederal secretary of Uil Domenico Proietti said this at the end of the meeting on the maneuver at Palazzo Chigi. «There is nothing on social security, they say they will renew quota 103, but no mention is made of the full revaluation of pensions and we fear there may still be the temptation to use pensions as ATMs. There is also nothing on the Women’s Option”, he added.