Academic journal article Social Security Bulletin

Financial Crisis Hits Italian Social Security System

Academic journal article Social Security Bulletin

Financial Crisis Hits Italian Social Security System

Article excerpt

On June 10, 1994, the Italian Constitutional Court ruled that since 1983 the social security authorities have failed to make full pension payments to as many as 600,000 beneficiaries. The ruling dealt with a 1983 law (No. 537/83) that changed the rules regarding social security supplements for persons receiving more than one pension. Before 1983, each pension was supplemented by an amount up to a legally required minimum level. After the law change, however, only the first benefit for those with more than one pension was supplemented up to the legally required minimum level. For example, after 1983, a widow receiving a retirement pension and a survivor's benefit qualified for a supplement only on the survivor's benefit. The court has ruled that supplements on all pensions or benefits should have been paid to the beneficiaries commencing 1983. The Ministry of Labor and Social Welfare estimates that the back payments may be as much as 30 trillion lire (US$20 billion) and the annual administrative and other costs may be 600-700 billion lire (US$400-450 million). One complicated administrative task will be tracing beneficiaries who have been denied their supplements. The Italian Constitutional Court's ruling complicates the Government's effort to bring the national budget under control as required by the European Union monetary control program. …

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