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The 2024 employment and welfare changes introduced by “decreto anticipi” and the budget law

As usual, the transition from one year to the next brings several important changes for businesses and employees. 2024 is no different: here is a quick overview of the main changes, affecting both employment and social security areas, introduced by Law No. 191 of 15 December 2023, which turned the so called “Decreto Anticipi” (Decree-Law No. 145/2023) into law, and the new Budget Law (Law No. 213/2023), which apply from 1 January 2024

Remote working. Until 31 March 2024, vulnerable employees and employees with children under the age of 14 working in the private sector will have the right to work remotely.

Fringe benefit threshold. Employees can reduce their taxable income by the value of fringe benefits they receive from their employer, such as goods and services, or payments or reimbursements for water, electricity, gas and rent or mortgage interest for their main home. For the 2024 tax year, the maximum amount of fringe benefits employees can reduce their taxable income by is EUR 1,000, or EUR 2,000 if they have children.

De-taxation of performance bonuses. The substitute tax rate on performance bonuses will be halved from 10% to 5%, but only for 2024.

Reducing the tax burden for employees. Employees will not have to pay social security contributions for disability, old age and survivors for the pay periods between 1 January 2024 and 31 December 2024. The amount of this exemption is 6% for monthly salaries, calculated over 13 months of up to EUR 2,692, after deducting the 13th month payment, and 7% for monthly salaries of up to EUR 1,923, also after deducting the 13th month payment.

Parental leave. Employees who have children under the age of six and who take maternity or paternity leave that ends after 31 December 2023 will receive 80% of their salary for up to two months in 2024. From 2025, they will receive 80% for the first month and 60% for the second month.

Contribution exemption for working mothers. Mothers with three or more children who have a permanent employment contract can enjoy a contribution-free period between 1 January 2024 and 31 December 2026, until their youngest child is 18 years old (domestic employees are not included). In 2024 only, the same exemption is also available to mothers with two children who have a permanent employment contract, but only until the month that their youngest child turns 10. The exemption from contributions is limited to a maximum of EUR 3,000 per year, apportioned monthly.

Quota 103”. Access to the "Quota 103" early retirement measure will be available to those who, by 31 December 2024, are aged 62 and above and have contributed for at least 41 years, but with some penalties. Only those who meet the eligibility conditions in 2024 will have their pension calculated based on the contributory system and no longer based on the hybrid system. The amount of the allowance may not exceed four times the minimum INPS treatment until the age of 67, instead of the current five times. In addition, the duration of the transition window, i.e. the waiting period between meeting the requirements and receipt of the first pension instalment, has also been increased from three to seven months for private sector employees.

Opzione Donna”. The “Opzione Donna” measure has been confirmed for 2024, with the age requirement raised by one year - from 60 to 61. Specifically, employees who, by 31 December 2023, have accumulated at least 35 years of contributions and are at least 61 years old, reduced by one year for each child up to a maximum of two years, and who are alternatively unemployed, have a reduced working capacity of 74% or more, or are carers, will be able to access the early retirement scheme.

APE Sociale”. The "APE Sociale" measure has been extended until the end of 2024 and the age requirement has been raised from 63 years to 63 years and five months. The eligibility conditions for the benefit under the previous legislation remain unchanged but now the benefit cannot be combined with any income received from work or self-employment, except for occasional work up to EUR 5,000 a year.

Contributory pensions. The measure introduces several changes concerning old-age and early-retirement pensions for employees with no contribution record on 31 December 1995 ("pure contributors"). In particular:

  • in order to qualify for an old-age pension at the age of 67 with 20 years of contributions, it is no longer necessary for the pension contribution to be 1.5 times the amount of the social allowance, but a different limit has been introduced to qualify for a pension at the age of 64 with 20 years of contributions. In particular, the monthly threshold for early retirement for women with children has been raised from 2.8 to 3.0 times the social allowance, remaining at 2.8 times for women who currently have one child and falling to 2.6 times for women who currently have at least two children;
  • the pre-retirement pension will be paid at a maximum gross monthly value not exceeding five times the minimum pension provided for by the legislation in force until the age of 67;
  • it is envisaged that the early retirement pension will start three months after the date on which the total requirements are met; and
  • the 20-year contribution requirement will be linked to increases in life expectancy.

Revaluation of pensions. The indexation percentages for pension supplements have changed for 2024, reducing the revaluation by 10% - from 32% to 22% - for pensions exceeding 10 times the minimum pension.

Reimbursement of periods not covered by contributions. Employees subject to the full contribution system ("pure contributors") who do not receive a pension may be able to redeem periods not covered by contributions to compulsory social security schemes and not subject to any contribution obligation before 1 January 2024, up to a maximum of five years, even if not continuous, on an experimental basis for the two-year period between 2024 and 2025.

For further information or clarification, please do not hesitate to contact us.

Article edited with the contribution of Chiara Magliulo, Trainee in the Employment Department.