Containing needs for state benefits

Containing needs for state benefits

The Finance Ministry will use 600 million euros, already provided for by the budget, to cover the increased need for social benefits this year due to the drop in incomes.

The suspension of labor contracts, rent reductions and the shuttering of enterprises (especially in food service, retail commerce, gyms, entertainment etc) will lead to a great rise in the number of taxpayers who will show annual incomes below €12,000 in 2020.

That will automatically make tens of thousands of taxpayers eligible for benefits such as those for housing or for children, as well as the minimum guaranteed income for more extreme cases of losses in earnings.

To contain the risk of benefit needs spiraling out of control, the ministry is considering setting a limit: The monthly special-purpose compensation of €534 may not be included in taxable incomes but could count toward real incomes used as the criterion of eligibility for and the basis of the calculation of a number of state benefits.

As special-purpose compensations in 2020 topped €2 billion, this measure will significantly contain the need for more benefits this year.

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