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CHILDREN

How Italy’s new ‘Family Act’ aims to increase the plunging birth rate

Italy's parliament approved a new bill on Thursday aimed at supporting parents. Here are the measures being introduced to help make starting a family in the country a more affordable and realistic prospect.

How Italy's new 'Family Act' aims to increase the plunging birth rate
Photo: AFP

“We have approved the Family Act to support parenting, combat the falling birth rate, encourage the growth of children and young people, and the help parents reconcile of family life with work, especially for women,” Premier Giuseppe Conte told reporters after parliament passed the bill.

Italy has suffered a declining birth rate for decades. Some 464,000 births were registered in Italy in 2018 – the lowest on record, ever.

Declining fertility rates, combined with longer life expectancy, has left Italy with a significantly older population. Its median age is now 45.9 years according to EU statistics, compared to the European median of 42.8, higher than in any other European country except Germany.

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The growing demographic crisis, with births falling and life expectancy rising, is thought to be both a symptom and a cause of Italy's chronically stagnant economy.

Italy's government announced last year it would be focusing on measures to curb its shrinking and ageing population. With the act now coming into force, here's what it provides.
 
 
Financial support for all under-18s
 
The Family Act's flagship policy is a “universal” monthly allowance, to be paid from the seventh month of pregnancy until a child reaches 18 years of age. This may be in the form of a direct payment or tax credit.
 
Despite being described as universal, the payments are means-tested and are on a sliding scale depending on a family's income. A maximum of €240 a month is available to parents of a child under the age of 18, with that payment increasing by up to 20 percent for each child born after that. There are also additional allowances for children with disabilites.
 

 
More paternity leave after birth
 
After the government initially said it would increase paternity leave to seven days, the final bill gives ten days of fully paid leave – and makes it mandatory.
 
Each parent can also choose to take a period of two months of additional leave (not transferable to the other parent) “granted regardless of the marital or family status of the working parent”, personal finance website QuiFinanza writes.
 
Ten days may not sound like a great deal to people from many other countries. Fully paid leave for new fathers was only introduced in Italy in 2012, and Italy is still lagging far behind Germany and Scandinavian countries, offering new dads weeks if not months of paternity leave.
 
But it is double the previous provision of five days, and meets the 10-day minimum the EU is trying to get member countries to abide by. 
 
Photo: Tiziana Fabi/AFP
 
Salary supplements for mothers returning to work
 
The bill also includes payments intended to help mothers get back to work following the birth of a child.
 
The Family Act includes “a supplementary allowance paid to working mothers by INPS (the social security office), for the period in which they return to work after mandatory maternity leave”.
 
It's not yet clear how long this period will last or how much the supplement will be worth.

 
More money for childcare
 
The amount of money available to help with the cost of nursery of babysitting will triple – from the current €1,000 up to €3,000 per year, although the exact sum will be dependant on the applicants' income. 
 
The payments will be divided into three income-dependant brackets: €1,500, €2,500 and €3,000.
 
Average nursery fees in Italy are about €500 a month, but in big cities this figure can rise to €700.
 
 
When will these changes come into effect?
 
Disappointingly for anyone imminently becoming a parent, the funds won't be available straight away – in fact, the law gives the government two years to make the contents of the bill into a reality.
 
The flagship universal child allowance policy however may be introduced much sooner as this is being fast-tracked after being processed separately from the rest of the Family Act, in a bill presented to parliament several weeks ago. Italian media reports it could be processed by the end of 2020.
 
Will these measures work to increase the birth rate?
 
The northern region of Bolzano has a considerably higher average rate of children per couple than the rest of Italy – 1.67 compared to 1.3  – a figure that's higher even than the EU average of 1.6. 
 
Bolzano, which enjoys more autonomy than other regions of Italy when it comes to setting policies, has in recent years been offering double as much money in child benefits to its population to encourage them to have children. 
 
There are also special subsidies for Bolzano parents with low incomes and easier access to family-friendly services such as childcare (in the rest of Italy there are only enough nursery spots for one in every four newborns).
 
Womens' labour market participation and inclusion is seen as a major factor in trying to raise the country's low birth rate.
 
Up to 73 percent of women in Bolzano aged 20 to 64 work, compared to 53 percent in the rest of Italy. 

The payments will be divided into three income-dependant bracket – €1,500, €2,500 and €3,000.

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MONEY

How much does it cost to raise a child in Italy?

How big is the financial commitment parents have to make in Italy to pay for their offspring’s needs and expenses until they’re grown up and independent? Here's a look at the predicted costs.

How much does it cost to raise a child in Italy?

Family is the bedrock of Italian society, but it’s also an unbalanced economic crutch, propping up children who leave home much later than most of their European counterparts.

Various factors are at play, from a declining birth rate, youth unemployment, being unable to get on the property ladder to young Italians moving abroad in search of better financial opportunities.

It probably comes as little shock, then, that parents in Italy end up forking out huge sums of cash to support their offspring through childhood and early adulthood (and beyond).

Even just up to the age of 18, raising a child in Italy can cost upwards of €320,000, according to data from Italian consumer research body ONF (Osservatorio Nazionale Federconsumatori).

The average spend of raising a child from 0-18 years is €175,642, but it rises in families with high incomes, classed as over €70,000 per year.

READ ALSO: Italian class sizes set to shrink as population falls further

Researchers noted that the cost of bringing up children has jumped up following the effects of the pandemic too: compared to 2018, child-rearing expenses increased by 1.2 percent by 2020.

The decrease in expenditure related to transport due to spending more time at home, as well as those incurred for sports and leisure activities, was not enough to mitigate the increase in costs for housing and utilities, which increased by 12 percent compared to 2018.

Photo by Suzanne Emily O’Connor on Unsplash

Food prices rose by 8 percent compared to 2018 and education and care jumped by 6 percent for the same timeframe.

In fact, Italy ranks as the third most expensive country in the world for raising children, only coming behind South Korea and China, according to data from investment bank JEF.

The pandemic has contributed to extending an already growing phenomenon: the decrease in annual income of Italian households.

Household income dropped by 2.8 percent from 2019 to 2020, the report found, citing data from national statistics agency Istat. It marks a further squeeze for families, especially low-income and single-parent families.

Depending on earnings, the amount needed to bring up a child until the age of 18 varies considerably.

READ ALSO: ‘Kids are adored here’: What being a parent in Italy is really like

A two-parent family with an annual income of €22,500 spends an average of €118,234.15 to bring up a child until the age of 18; for the same type of family but with an average income of €34,000 per year, the total expenditure to bring up a child increases to €175,642.72.

For high-income families, stated as over €70,000 annually, raising a child costs €321,617.36 on average.

The figures mark an increase of around €5,000 for low- and middle-income families, and a much sharper rise of €50,000 for high-income families, compared to ten years ago.

The money gets spent on housing, food, clothing, health, education and ‘other’ categories. The report revealed that the average spend on a child aged 16 years old is almost €11,500 annually, amounting to €955.78 per month.

Almost €2,000 per year gets spent on food, €1,615 goes on transport and communication, €782 goes on clothing and €1,600 goes on education annually, the report found.

They begin small, yet the costs are anything but. (Photo by LOIC VENANCE / AFP)

For the ONF, “these data highlight how, today more than ever, having a child is becoming a luxury reserved for the few, which fewer and fewer Italians are able to afford.”

READ ALSO:

The numbers on supporting children after their 18th birthday are a little hazier, as when children eventually fly the nest varies – but figures from Eurostat show that Italy ranks third in Europe for the average oldest age at which children move out of the parental home, at 30.2 years old.

Only young people from Croatia and Slovakia wait longer to live independently, while the EU average for flying the nest is 26.4 years old.

Even then after eventually leaving home at over 30 years old, it’s not entirely clear how many Italians are fully independent once they get their own address, or whether their parents continue to bankroll their living costs.

Italy’s president Sergio Mattarella sent a message to Italy’s Birth Foundation (Fondazione per la Natalità) in May stating, “The demographic structure of the country suffers from serious imbalances that significantly affect the development of our society.”

In response to worsening economic circumstances, the Italian government has recently pledged to do more to help people have families and reverse Italy’s continuing declining birth rate.

It has introduced the Single Universal Allowance (L’assegno unico e universale), but along with it has dropped various so-called ‘baby bonuses’ that provided lump sums to new parents.

The new allowance is a monthly means-tested benefit for those who have children, or are about to have a child. It is payable from the seventh month of pregnancy until the child reaches the age of 18 or in some cases, 21. For more information on what it is and how to claim it, see here.

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