Lorenzo Macchi
Research expert covering society, economy, and politics for Italy
Welfare in Italy - statistics and facts
Italy's expenditure on social benefits is one of the highest among the OECD countries. As of 2019, it added up to 28.2 percent of the country's GDP, while the OECD average stood at 20 percent. Social expenditure includes cash benefits, allocation of goods and services, as well as tax breaks. Social benefits are usually allocated for low-income households, the elderly, disabled, sick, unemployed, or young population. Overall, Italy has a strong welfare system, however, some issues can be found within the country, such as emergency response time, waiting time for benefits, or the amount of the monetary aid.
The Italian welfare system mainly covers healthcare, pensions, social housing, as well as employment and unemployment benefits. Italy's health system offers universal coverage and is generally free of charge, as it is financed mostly through taxes. Nonetheless, health spending is not regarded as a social expenditure, but is calculated separately. Rather, pensions make up a large part of the social expenditure. In 2019, Italy spent 16.8 percent of its GDP on pensions, which normally cover old-age, work injury, retirement, disability, sickness, and similar pensions. As Italy is one of the oldest countries in the world, where life expectancy is particularly high and the young population is diminishing, the country has many retirees and therefore a lot of pensions to pay. In 2019, there were 602 occupational pensioners for every 1,000 employees in Italy.
Other measures which strengthen the welfare state are benefits for the unemployed, social housing, and economic aid. Almost one percent of the Italian GDP was spent on unemployment assistance in 2017. The public spending on unemployment includes compensation for unemployment, which covers redundancy payments from public funds and payment of pensions before the standard retirement age. At the same time, the country invests in the job market to contrast the high national unemployment rate, for instance with public employment services, training, hiring subsidies, job creation, and so on. High unemployment rates, low income, and a part of population at risk of poverty lead to the need for social housing. In 2018, three percent of all housing units were social housing, with the cities of Naples and Trieste far above the national average.
In 2019, the Citizens' Basic Income was launched, which was designed to reduce poverty and unemployment. The financial requirements to receive the basic income included having an annual indicator of the equivalized economic situation not above 9,360 Euros, and as such is not a basic income for everyone, but only for people with very low incomes. In 2020, almost 1.2 million households in Italy received the Citizens' Basic Income, while 135,000 households were given the Pensioners' Basic Income. Between April and August 2020, the monthly average amount for the Citizens' Basic Income or the Pensioners' Basic Income was 524 euros. The Southern region of Campania recorded the highest monthly average as well as the highest number of households benefitting from this service. Whether this measure actually leads to the creation of jobs is openly discussed, with some arguing that the Basic Income might have increased the trend of untaxed work.
The COVID-19 crisis has put many people in difficult economic situations. A wide range of activities have had to shut down or reduce their operations, and millions of working hours have had to be paid in wage subsidies by Italian social security. However, wage subsidies only cover a percentage of the salary. In the first six months of 2020, the number of requests for unemployment benefits in Italy increased, in particular during the first wave of coronavirus infections and the related lockdown. Since March 2020, the Italian government has imposed a ban on layoffs of employees for economic reasons in order to reduce the impact of COVID-19 on the job market. Households in severe economic difficulties received some extra economic aid, designed specifically for the pandemic's impact on families' finances. The average amount paid ranges from 520 to 590 euros. Other resolutions implemented during the COVID-19 pandemic are a special leave from work for parents who need to take care of their children at home, and a baby-sitting bonus for working parents.
The Italian welfare system mainly covers healthcare, pensions, social housing, as well as employment and unemployment benefits. Italy's health system offers universal coverage and is generally free of charge, as it is financed mostly through taxes. Nonetheless, health spending is not regarded as a social expenditure, but is calculated separately. Rather, pensions make up a large part of the social expenditure. In 2019, Italy spent 16.8 percent of its GDP on pensions, which normally cover old-age, work injury, retirement, disability, sickness, and similar pensions. As Italy is one of the oldest countries in the world, where life expectancy is particularly high and the young population is diminishing, the country has many retirees and therefore a lot of pensions to pay. In 2019, there were 602 occupational pensioners for every 1,000 employees in Italy.
Other measures which strengthen the welfare state are benefits for the unemployed, social housing, and economic aid. Almost one percent of the Italian GDP was spent on unemployment assistance in 2017. The public spending on unemployment includes compensation for unemployment, which covers redundancy payments from public funds and payment of pensions before the standard retirement age. At the same time, the country invests in the job market to contrast the high national unemployment rate, for instance with public employment services, training, hiring subsidies, job creation, and so on. High unemployment rates, low income, and a part of population at risk of poverty lead to the need for social housing. In 2018, three percent of all housing units were social housing, with the cities of Naples and Trieste far above the national average.
In 2019, the Citizens' Basic Income was launched, which was designed to reduce poverty and unemployment. The financial requirements to receive the basic income included having an annual indicator of the equivalized economic situation not above 9,360 Euros, and as such is not a basic income for everyone, but only for people with very low incomes. In 2020, almost 1.2 million households in Italy received the Citizens' Basic Income, while 135,000 households were given the Pensioners' Basic Income. Between April and August 2020, the monthly average amount for the Citizens' Basic Income or the Pensioners' Basic Income was 524 euros. The Southern region of Campania recorded the highest monthly average as well as the highest number of households benefitting from this service. Whether this measure actually leads to the creation of jobs is openly discussed, with some arguing that the Basic Income might have increased the trend of untaxed work.
The COVID-19 crisis has put many people in difficult economic situations. A wide range of activities have had to shut down or reduce their operations, and millions of working hours have had to be paid in wage subsidies by Italian social security. However, wage subsidies only cover a percentage of the salary. In the first six months of 2020, the number of requests for unemployment benefits in Italy increased, in particular during the first wave of coronavirus infections and the related lockdown. Since March 2020, the Italian government has imposed a ban on layoffs of employees for economic reasons in order to reduce the impact of COVID-19 on the job market. Households in severe economic difficulties received some extra economic aid, designed specifically for the pandemic's impact on families' finances. The average amount paid ranges from 520 to 590 euros. Other resolutions implemented during the COVID-19 pandemic are a special leave from work for parents who need to take care of their children at home, and a baby-sitting bonus for working parents.
