Pension insurance contributions for invalidity, old-age and survivor's pensions (IVS) are currently equivalent to 32.7% of remuneration (the maximum contribution for 2003 is €80,390.96).

More than two-thirds of these contributions are paid by the employer and less than one third (8.89%) by the employee (plus an IVS contribution of 1% for that proportion of the employee’s remuneration that exceeds €36,093 annually).

The remaining insurance contributions (sickness-maternity, unemployment and family allowance contributions) are, in practice, paid in full by the employer.

The Family Unit Allowance (ANF), if it is payable, is paid by the employer (and adjusted by the INPS according to the total amounts due in contributions).

As from 1 January 1996, IVS social security contributions remain fixed for periods of five years, except where the employee specifically states otherwise (in which case contributions are fixed for periods of ten years).

For benefits, the payment terms and expiry periods are as follows:

• Invalidity, old-age, and survivor's pensions: proof of entitlement must be submitted every three years and the amount is fixed for ten years;
• Unemployment and ANF: proof of entitlement must be submitted every year and the amount is fixed for five years;
• Sickness: proof of entitlement must be submitted every year and the amount is fixed annually.

Valid pension contributions are actual contributions paid, figurative contributions (e.g. military service, sickness, periods where unemployment allowance has been received, etc), voluntary contributions and contributions paid retroactively to cover a period of inactivity.

The insurance organisation for public employees (and similar staff) is the National Welfare Institute for Employees of Public Authorities (INPDAP). Individuals working in the entertainment industry (dependent or self-employed) should refer to the National Welfare and Assistance Office for Workers in the Entertainment Business (ENPALS), and journalists to the National Welfare Institute for Journalists (INPGI).

As from 1 January 2003, company directors previously registered with the National Welfare Institute for Industrial Managerial Employees (INPDAI) are insured under the INPS.

Craftsmen and tradesmen (as well as self-employed workers in the agricultural sector) are registered in the INPS’s separate divisions, in accordance with the regulations adopted between 1957 and 1966.

The workers are responsible for registering themselves and for paying the full contribution amount. Self-employed workers are not insured against the risk of unemployment. Self-employed individuals have limited entitlement to family allowance (a lesser amount than the ANF paid to employees).

For IVS purposes, as from 1 January 1993, the contribution amount has been calculated on the basis of the company’s total income declared for IRPEF purposes for the year to which the contribution pertains.

'Quasi-employees' are also registered with the appropriate INPS division, in accordance with the guideline introduced on 1 January 1996 by the Pension Reform Act no. 335/95 (legge di riforma del sistema pensionistico).

This division focuses specifically on individual professionals who do not have any other social security cover since there is no relevant social security fund for their profession (e.g. company directors, designers, etc.), and individuals practising a professional activity or performing coordinated and ongoing collaborative work.

The characteristic of this group of individuals (this is a significant difference in comparison to employment) is that there is no employer-employee relationship in their positions.

Coordinated and ongoing collaborative work does not require individuals to obtain a VAT number. For INPS registration, contributions are equivalent to either 14% of the gross remuneration (if individuals are not registered with any other obligatory social security contribution scheme), or 10% (if individuals are registered with another social security contribution scheme).

Professionals pay tax along the same system of prepayments and end-of-year balance within the same periods as for IRPEF payments, and contributions are payable by them alone.

For individuals performing collaborative work, payment is made by the customer and contributions are paid two-thirds by the customer's organisation and one third by the worker (the maximum limit for contributions in 2003 is €80,391).

As from 16 March 2000, there has been an obligation to cover quasi-employees against accidents at work and occupational diseases (the insurance organisation is the National Institute for insurance against Employment Injuries or INAIL). However, this obligation applies only to workers whose jobs are categorised as 'dangerous' or 'at risk' (in general, jobs requiring the use of machinery), or who regularly perform their job in motor vehicles that they drive.

Individuals registered with this division are not insured against unemployment. Under certain conditions, quasi-employees may be entitled to Family Unit Allowance (ANF), and sickness and maternity benefit. The amendments currently being made as part of labour market reform look set to reduce this category.

Social security cover for professionals is organised into 16 autonomous social security bodies that were privatised in 1994. These include INARCASSA (for engineers and architects), national funds for lawyers and notaries, ENPAM (for doctors), ENPACL (for recruitment consultants), CNPADC (for sales engineers), CNPR (for accountants and sales staff), ENPAP (for psychologists), EPPI (for industrial experts), ENPAB (for biologists), EPAB (for farmers and forestry workers, chemists and geologists), and ENASARCO (for sales representatives).

For more information on statutes, regulations, rules for paying contributions and the criteria for claiming social security payments, please visit the following sites:

Current minimum requirements for claiming pension payments based on the general compulsory system: From 1992 onwards, the Italian pension system has undergone various amendments, culminating in the reform approved in 1995 under law no. 335.

This reform essentially made significant improvements to the requirements for (early) old-age pension and reduced the pre-existing differences between private, public and special systems, also amending the system of calculating pension payments, albeit in defined stages.

In light of the possibility of fresh changes being made, we would highlight that the information given below reflects regulations in force as at 1 July 2003.

Invalidity insurance payments. There are two types of benefit. Invalidity benefit (when an individual's capacity to work is reduced to less than 1/3) and disability pension (when an individual is completely and permanently unable to perform any kind of work).

As an administrative requirement, both benefits are dependent on the individual having completed five years of work during which time he has paid social security contributions; at least three of these five years must have been during the five years preceding the benefit application. However, if an individual’s invalidity resulted from professional activity, and no benefit is payable under the individual's accident insurance, benefit may still be paid out even if the above requirements are not met (system of preferential invalidity benefit and of preferential disability pension).

The benefits in question are calculated differently. Invalidity benefit is calculated on the basis of the complete periods during which contributions have been paid as at the time of the event.

Disability pension is calculated in a similar way but includes, up to a maximum contribution period of 40 years, the period between the time at which pension payments begin and reaching pensionable age.

Old-age insurance payments. There are also two types of old-age insurance payments: early-retirement pension and old-age pension.

Based on the amendments introduced in 1996, the early-retirement pension is paid under the following conditions: individuals must have paid contributions for at least 35 years (excluding figurative contributions), and must be 57 years of age, or on the basis of what will be the new service requirement of 40 years (as from 1 January 2008).

During the transition period, the latter requirement is fixed at 37 years for 2003, 38 years for 2004 and 2005, and 39 years for 2006 and 2007. During this period, the abovementioned minimum-age requirement (57 years) may be lowered for insured individuals who meet the criteria for early retirement and/or for manual workers.

Furthermore, again as a result of the amendments made, commencement of early retirement pension is fixed by law (there are four times during the year when individuals may take early retirement) depending on their age and/or the quarter in which they become eligible to take early retirement.

To be eligible for the old-age pension payable under the pay-as-you-go and mixed systems, individuals must have reached a minimum age (65 years for men and 60 years for women) and have paid contributions for a certain period (at least 20 years made up of either actual, figurative or voluntary contributions). However, specific categories of insured individuals may still be able to claim a pension on the basis of lesser requirements (whether in terms of age or contributions).

The new old-age pension payable under the defined contribution system (the system brought in for newly insured individuals as from 1 January 1996, and individuals opting in) is based on a minimum of five years' actual contributions with a flexible age requirement (57-65 years), regardless of sex.

Survivors of insured individuals or individuals receiving a pension. There are two types of survivor's insurance benefit: a survivor's pension (death of the insured individual), and a surviving dependants' pension (death of an individual receiving a pension).

This is payable to the surviving spouse and surviving children aged under 18. However, this age limit may be exceeded if the children are in higher education and/or university courses, or are disabled (in some cases, the pension may be also be payable to a divorced spouse.

For more information on 'equivalent individuals' entitled to benefit but for different reasons to the criteria set out above (known as 'equiparati') and 'other beneficiaries' please refer to the website).

If the deceased had not yet reached pensionable age, minimum contribution requirements must be met (at least 15 years of insurance at the time of death, or, secondarily, the requirements to be met in order to claim invalidity benefit).

The pension is calculated as a percentage of the direct salary earned by the individual receiving a pension or which would have been payable to the insured individual. These percentages are 60% (for spouse) and 20% for each child up to a limit of 100% of the salary.

Where there is only one surviving child, the rate reverts to 70% (but if there is more than one surviving child, the rate is 40% for each child – under no circumstances may the amount exceed 100% of the total amount of the direct pension).

In cases where survivors are not entitled to a pension because they fail to fulfil the necessary administrative requirements, surviving families may claim lump-sum compensation (death benefit or one-off payment).

Calculation of pension payments. Calculation of pension payments are subject to the following conditions:

• Those who have paid contributions for 18 years as at 31 December 1995 are entitled to a pension (either an early-retirement pension or an old-age pension) under the current provisions of the pay-as-you-go system (average of the last five years of remuneration for service completed as at 31 December 1992; average of the last ten years of remuneration for service completed as from 1 January 1993);
• Those who have paid at least 18 years of contributions as at 31 December 1995 are entitled to a pension (either an early-retirement pension or an old-age pension) under the provisions set out in the mixed system (for service completed by 31 December 1995, application of the criteria set out by the pay-as-you-go system; for service completed from 1 January 1996 onwards application of the new pay-as-you-go system);
• Those who are included under the new defined contribution system (newly insured individuals from 1 January 1996 onwards and those opting in) are entitled to an old-age pension calculated on the basis of the total contributions paid ('contribution amount'), and reviewed annually on a combined basis, multiplied by a 'transformation coefficient' that is directly linked to the average life expectancy, and which increases as the applicant gets older (from 4.72% at age 57 to 6.136% at age 65, for both men and women). In order to calculate the 'contribution amount', the calculation rate is equivalent to 33% of remuneration for employees, 20% for self-employed workers, and 14.5% with an increase of up to 20% for quasi-employees (however, those who are also registered with other divisions remain limited to a rate of 10%). Essentially, the new defined contribution system, although it is still a distribution system, also introduces some aspects characteristic of a private scheme (capitalisation).

Sickness benefit is payable in cases of sickness as from the fourth day following verification of the illness, up to a maximum period of 180 days in any one year.

The benefit amount is normally equivalent to 50% of the individual’s salary during the course of the first 20 days, and 66.66% thereafter. Except in special cases, sickness benefit is paid directly by the employer (with an adjustment of the amounts payable to the INPS as contributions).

In addition, many employment contracts make provision for an additional amount paid by the employer. During this period, health checks may be conducted directly by the INPS or at the request of the employer. Sickness occurring during holiday will automatically suspend said holiday (unless the employer is able to prove that the sickness did not affect the individual's holiday plans).

However, the worker must keep his employer and the INPS informed of the situation regarding their illness. Under specific income and contribution conditions, sickness benefit is also payable to 'quasi-employees'.

Maternity benefit is payable to all female employees during the statutory period during which they may remain off work.

As a general rule, this period runs from two months prior to the due date to three months following the birth of the child (this period is reduced to three months only for workers who are about to become adoptive or foster mothers to children under the age of six).During this statutory period of leave, the benefit payable is equivalent to 80% of remuneration and is also paid by the employer with an adjustment on INPS contributions.

Benefit is also payable to female workers who are self-employed, including those registered with the separate division for 'quasi-employees' (recently also to female professionals).

For children born after 1 July 2000, female workers registered with a compulsory insurance scheme may receive an additional amount, as maternity benefit from the INPS. This additional amount is only paid in cases where the regular maternity benefit is below the benefit threshold (€1,671.76 as at 31 December 2002).

For specific categories of individuals (e.g. unemployed women who have reached the end of the benefit period) benefit is paid in full.

Secondly, as from 1 July 1999, it has been possible to claim maternity benefit paid by the municipal authorities (this amount is less than INPS benefit). This benefit is available under specific family income conditions and is not subject to the individual being insured.

At the end of the statutory period of leave a working mother (or a working father) may opt take a further six months' leave on 30% of their salary.

Accidents at work and occupational diseases. All individuals whose professional or commercial activities are considered by the law to be at risk of accidents at work or occupational diseases are automatically insured against such risks.

INAIL is the insurance organisation for all categories of insured workers. During a period of temporary disability, appropriate benefits are payable equivalent to 60% of remuneration during the first three months, and 75% thereafter.

In the event of permanent injury greater than 5%, workers may claim either a regular payment or a cash lump sum.

Family allowance. Italian legislation guarantees Family Unit Allowance (ANF) to employees (in both the private and the public sector) and equivalent individuals (individuals receiving a pension).

The amount of benefit varies according to the number of family members (the individual claiming benefit, his/her spouse, any children under the age of 18, and equivalent individuals), and the income provided by individuals comprising that family unit (so above certain income thresholds there is no benefit entitlement).

Family allowance may also be granted to quasi-employees who are registered with a separate division of the INPS. However, other self-employed workers (craftsmen, tradesmen, etc.) continue to be governed by pre-existing legislation on family allowance (amount less than that of the ANF).

In all cases, as from 1 January 1999, all residents and Italian and EU citizens with families with at least three minor children may claim family allowance from municipal authorities (under specific income conditions) paid by the INPS in 13 monthly payments.

Unemployment. Insurance against 'involuntary' unemployment is granted exclusively to employees.

The basic requirements for standard unemployment are: two years' of contributions to the social security system, and one year (52 weeks) of contributions during the course of the last two years.

If these criteria are met, benefit is paid for up to a maximum of 180 days (six months). If individuals meet certain age criteria (if they are aged over 50) they can continue receiving unemployment benefit after the 180 days period (up to a maximum limit of nine months).

The amount of standard unemployment benefit is equivalent to 40% of the remuneration received during the three months prior to becoming unemployed.

Individuals must submit their application for unemployment benefit to the INPS within 68 days of becoming unemployed and must complete a declaration indicating the unemployed individual’s status, and a declaration of availability must be submitted to Job Centres (the various methods of assessment have been devolved to individual regions).

Specific categories and/or professions (agricultural workers and/or those employed in seasonal jobs) are subject to reduced contribution requirements.

Finally, please note that there are also other measures (e.g. the Wages Guarantee Fund or CIG, mobility) in connection with specific instances of companies in crisis (for more details visit the INPS website).