Rome: Italy plans to make it easier for selected groups of people who have reached 62 or 63 to retire, officials said, in an attempt to replace an early retirement scheme due to expire this year.
High pension costs are making it hard for Italy to finance investments in other areas or cut its public debt, which is the second highest in the European Union.
With one of the world’s oldest populations, Italy spends on pensions more than any other EU country except Greece, data from Eurostat shows. On the other hand, Italy is near the bottom for education spending.
Championed in 2018 by the rightist League party, a member of Prime Minister Mario Draghi’s national unity administration, the current “quota 100” scheme allows people to retire if they have made 38 years of contributions and are at least 62 years old.
But as of January 2022, Italy is due to return to an unpopular system whereby retirement will be allowed from the age of 67, a scheme which was put in place in 2011 to cut spending at the height of the sovereign debts crisis.
To cushion the change, Rome plans to expand some underused early retirement options which allow unemployed, disabled people, carers and workers whose job is classified as “strenuous” to retire at the age of 63, three government sources said.
The Treasury aims to set criteria widening the range of people falling into these categories, they added.
Another measure being discussed is to let specific groups of workers retire if they are at least 62, but under a more severe regime than “quota 100” and only if they accept a lower monthly allowance than under “quota 100”, they said.
The overall plan, still to be finalised as talks between ministries continue, is estimated to cost more than 2 billion euros ($2.3 billion) and will be part of the 2022 budget to be presented to parliament by Oct. 20.
The Treasury estimated that “quota 100” drove pension spending to 17% of national output in 2020, an all-time record.
The period 2020 to 2021 saw an average annual rate of growth in pension spending which was higher than before the 2011 reform.