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Italian millennials ‘won’t reach financial independence until age 50’

The time it takes for young Italians to reach financial independence is steadily increasing, with today's children unlikely to be economically secure before their 50's, a study has warned.

Italian millennials 'won't reach financial independence until age 50'
File photo: Pexels

By 2020, the average 20-year-old Italian will have 18 years to wait before living independently, researchers estimated. The milestone of 'independent living' was measured by a number of factors, including having a home, steady income, and the ability to support a family.

The figures come from a report by the Bruno Visentini Foundation, 'Generation gap, from conflicts to solidarity', presented at Luiss University on Wednesday morning.

Researchers said that Italians who had turned 20 in 2004 could expect to be living independently within ten years. However, that figure has increased steadily and is set to reach 28 years by 2030.

In other words, today's children can only expect to have 'grown up' once they're nearing their 50's. According to the foundation's research, the generation gap in Italy is the second-worst in Europe, beaten only by Greece.

The study's authors presented some possible solutions to the crisis, including an overhaul of the tax system and extra funds for youth policies.

They called for “a pact between the generations”, which would require around a million elderly Italians – those receiving the most generous pensions – to make a “solidarity contribution”. This money would go to help 'Neets', the Italian term for young adults who are neither employed nor enrolled in a study programme.

Together with more tax incentives for the young, and “the creation of financial instruments which can multiply the effect of the solidarity pact”, these measures could help millennials on their way to financial independence sooner.

According to the researchers, such a change is necessary “not just for ethical reasons, but also for socio-economic ones.”

They estimated the cost of young adults, aged between 15 and 29 who are neither studying nor working, to the Italian economy to be €32 billion each year – a figure which has risen sharply from €23.8 billion just under a decade ago.

READ ALSO: Italy passes law to tackle poverty: Five key things to know

Italy's youngest generation has been disproportionately affected by the economic crisis and ongoing employment crisis. 

Last year, for the first time, the millennial generation became the poorest, data from Caritas showed. This rise in poverty has been linked to a number of other trends, such as the slowing birth rate and the rise in the average age at which youngsters fly the nest.

Eurostat statistics in October 2016 showed that less than a third of under-35's in Italy had left their parental home, a figure 20 percentage points higher than the European average and surpassed only in Slovakia.

Young Italians were famously branded 'bamboccioni' (big babies) by ex-Italian finance minister Tomasso Padoa-Schiopa in 2007 – a term which has stuck. However, in addition to economic worries, economists have argued that clingy parents are actually to blame for the high rate of young adults living at home. 

READ MORE: Italians are not lazy: Misconceptions and marginalization in Italy's job market

'Italians are not lazy'

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MONEY

EXPLAINED: How to claim Italy’s €200 cost of living bonus

The Italian government is sending one-off €200 payments to cushion the rising cost of living, but they won't be automatic. Here's the latest on how the process works.

EXPLAINED: How to claim Italy's €200 cost of living bonus

The €200 cost of living bonus was announced in May 2022, alongside several government measures aimed at offsetting the increasing cost of living, as The Local reported.

Employees, as well as the self-employed, pensioners and the unemployed, will be eligible to receive the €200 payment if they have an annual income of under €35,000 gross, according to a decree law passed in May.

READ ALSO: Who can claim Italy’s €200 cost of living bonus?

However, the bonus is only automatically made to those who are state employees or pensioners. Those in these categories will be identified by the Ministry of Economy and Finance and INPS and receive €200 along with their salaries or pension payments.

What if I work in the private sector?

Employers working in the private sector should receive their payments in their July pay packet. First, however, they need to submit a self-declaration (autodichiarazione) form to their employer, who will pay the sum with the July pay check and then recover the funds from the state later.

The decree doesn’t specify a deadline for the submission, but as the payments should be made in July, the paperwork needs to be filed before that – so you’ll need to talk to your employer and arrange it.

READ ALSO: EXPLAINED: The rules and deadlines for filing Italian taxes in 2022

The self-declaration serves to establish that the worker has all the requirements to be a beneficiary. That means the person does not go over the income ceiling for the benefit, for example.

You will also have to declare that you will not receive a €200 bonus from other sources, such as from being a recipient of the citizen income or through another employment relationship.

How can other workers apply?

Italy’s government expanded the bonus payment scheme to more people in early May, as The Local reported.

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ were added to the categories of people in Italy eligible for a one-off €200 payment.

These other categories of workers will not receive automatic payment, though. Instead, they need to make a special request to INPS to receive the bonus.

There are different deadlines for different people, so ‘domestic workers’ (lavoratori domestici) need to apply by September 30th. Other workers, such as seasonal, for example, have until October 21st.

You can apply for the bonus on the INPS website, which indicates that the payments will be made at an unspecified later date.

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