Supporting the Ageing Population with a Comprehensive Plan
ROME – Italian Prime Minister Giorgia Meloni is taking steps to address the challenges posed by Italy’s ageing population and low birth rates. In an effort to combat falling productivity and increasing welfare costs, Meloni plans to introduce a new welfare subsidy specifically targeted at low-income elderly individuals. A draft decree, which Reuters had an exclusive look at on Thursday, outlines the details of this initiative, which is part of a broader 1 billion euros ($1.09 billion) plan spanning two years.
Universal Benefit for the Elderly
Included in this comprehensive plan is a monthly “universal benefit” aimed at supporting individuals over 80 with “very severe welfare needs”. Starting from January 1, 2025, this benefit will provide recipients with 1,000 euros per month, and it will remain in effect until December 31, 2026, according to the draft. By implementing this measure, the government hopes to alleviate financial constraints for the elderly in need.
Challenges Faced by Italy’s Ageing Population
Italy currently grapples with the consequences of having the highest old-age dependency ratio and the title of the European Union’s oldest country. With more than a third of the population projected to be over 65 by 2050, the government is faced with the increasing strain on welfare costs and diminishing productivity. Already, pensions account for over 15% of the country’s gross domestic product (GDP), and this figure is expected to rise to 17% by 2042, placing additional pressure on public debt and diverting resources from critical sectors like education and childcare.
Aiming to Combat Italy’s Demographic Crisis
The Italian government has recognized the urgency of addressing Italy’s demographic crisis and has allocated approximately 1 billion euros in its 2024 budget to implement several measures. By supporting the low-income elderly through this new subsidy, Prime Minister Meloni aims not only to alleviate immediate financial burdens but also to provide a foundation for a more sustainable future. The package, set to be presented at the conclusion of a cabinet meeting, signifies Italy’s commitment to proactively addressing the challenges of its ageing population. (1 euro = $0.91)