Decree-Law 4 May 2023, no. 48, published 4 May 2023 in the Official Gazette of the Italian Republic introduces a new income support measure known as the "Inclusion Allowance" starting 1 January 2024. The Inclusion Allowance seeks to combat poverty and social exclusion of vulnerable groups through work, training, education, active policy, as well as social inclusion by providing employers with substantial social security contribution discounts. Employers that hire individuals benefiting from the Inclusion Allowance will be entitled to certain advantages. Employers must adhere to the terms and conditions outlined in the legislation to benefit from the social security discounts fully.
For employees hired with an open-ended employment or apprenticeship contract, employers will receive a 100% discount on social security contributions, up to €8,000, for up to 12 months. This discount is a significant incentive for employers to provide stable job opportunities to those in need. In the event of dismissal of the employee who is a beneficiary of the inclusion allowance within 24 months from the hiring date, the employer must return the incentive used plus civil penalties unless the dismissal takes place for just cause or for justified reason.
In the case of fixed-term contracts, employers can benefit from a 50% discount on social security contributions, up to €4,000, for a maximum period of 12 months. This discount is applicable if specific conditions are met. By offering this incentive, the government aims to encourage employers to provide short-term employment opportunities while ensuring the financial stability of low-income employees.
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Nathan North is Director of Strategic Initiatives for PayrollOrg.