The Commission put forward a proposal for a new Council Recommendation on minimum income to help EU countries reduce poverty and promote reintegration in the labour market.
With this proposal, the EU executive aims to reduce the number of people at risk of poverty or exclusion by 15 million and make sure that at least 78% of the population aged 20 to 64 is in employment, in line with the European Pillar of Social Rights.
To this end, member states should achieve adequate minimum income support by the end of 2030, according to the proposal.
However, the Commission also stressed the urgency of tackling poverty in the short term, due to the ongoing energy crisis.
“At the time of surging inflation and energy crisis provoked by Russia’s brutal war in Ukraine, it is more important than ever to focus on employment and social dimensions across all member states,” said the executive vice-president Valdis Dombrovskis during a press conference on Wednesday (28 September).
Commissioner for Jobs and Social Rights Nicolas Schmit said minimum income schemes should give “a cash benefit to households as a last resort to help people pay the bills and lift them out of poverty.”
According to the Commission, while all EU countries have minimum income schemes in place, around 20% of jobless people at risk of poverty are not eligible to receive any benefit and between 30% to 50% of those eligible do not take up this support.
The proposal
The recommendation asks member states to put in place more accessible application procedures and speed up the process.
Moreover, EU countries should annually review the level of income support and adjust it to the economic situation, making it more flexible in case of crises.
“The level of minimum income in a period of high inflation, if not adapted, will not protect against poverty,” Commissioner Schmit said, commenting on the current situation.
However, the Commission also stressed that member states should preserve the sustainability of their public finances and that EU funding from the European Social Fund Plus (ESF+) could help them in implementing income support.
‘Active inclusion’
According to the Commission, minimum income schemes should mainly focus on “active inclusion,” providing incentives for people to go back to the labour market, while also giving access to essential services such as healthcare and education.
The transition to employment could also be facilitated through measures for employers, such as recruitment incentives, according to the proposal.
For those who find a job, the Commission also proposes to combine benefits and earnings in the short term. This would encourage people to take up a job because they do not have to fear immediately losing government support.
Extended coverage
The Commission recommends member states make sure eligibility criteria are transparent, in an effort to promote equality and economic independence.
“To make sure it reaches the right people, member states should set criteria that don’t discriminate against age and make sure the length of legal residence is fair,” Schmit said.
In Italy, for instance, only people who have been residents for more than 10 years can apply for minimum income, while in France, people under 25 generally do not have access to benefits.
“Excluding all young people from minimum income a priori can have negative consequences,” Schmit said, adding that combining the Child Guarantee with the minimum income could help lead young people towards education or the labour market.
Calls for an EU directive
Meanwhile, NGOs and some MEPs are already calling for stronger action from the EU executive.
According to MEP Sara Matthieu (Greens/EFA), “so far, non-binding instruments have failed to keep people in the EU out of poverty.”
“This is why we need an EU Directive as soon as possible,” she said.
Peter Verhaeghe, policy officer at Caritas Europa, also called for binding legislation on minimum income. In his view, EU countries might agree to the recommendation “as long as there is no obligation for them to implement it.”
Next steps
The Commission’s proposal will need to be discussed by member states’ governments in the EU Council.
Once adopted by member state governments, EU countries should report on their progress every three years, while the Commission will monitor implementation through the European Semester.