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Italy’s €500 ‘holiday bonus’ is set to return for summer 2021

The holiday bonus introduced to help Italy’s tourism industry last year is coming back this summer, and it may be easier to use.

Italy's €500 'holiday bonus' is set to return for summer 2021
Italy's tourism businesses are preparing for summer 2021. Photo: Alberto Pizzoli/AFP

Italy’s tourism minister has announced the return of its summer ‘holiday bonus’ scheme under which lower-income households could receive up to €500 each.

First introduced in May 2020 under the ‘Relaunch Decree’, the bonus vacanze or  ‘holiday bonus’ aims to boost Italy’s tourism sector, which accounts for 15 percent of the country’s jobs and has been hard hit by ongoing travel restrictions due to the pandemic.

READ ALSO:  Italy’s tourism industry reports €120 billion loss in 2020

The government set aside 2.6 billion euros to give households earning less than 40,000 euros a year a financial incentive to holiday in Italy rather than go abroad.

But issues with using the scheme last year meant most of the pot has gone unused – and now the payments are being made available for summer 2021.

Tourists at the beach on Rabbit Island in Lampedusa, Sicily. Photo by Alberto PIZZOLI/ AFP

“The holiday bonus has been extended,” Italian Tourism Minister Massimo Garavaglia said on Rai 1, explaining that most of the funds made available in 2020 had not been claimed.

“There was a problem with (the scheme),” he said. “820 million of the 2.6 billion allocated has been spent, so a lot of the funds are still available.”

“If it worked well, it would already have been used,” he said, adding that the ministry had tabled some amendments to the way the scheme works.

While Italy has not yet confirmed whether and how much international tourism will be allowed this summer, Garavaglia stressed the importance of domestic tourism to keeping businesses afloat.

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“It’s clear that this will be a summer of Italian tourism in Italy, even if there is some recovery from abroad as we are moving towards using the European green pass,” he said.

Last year, some small accommodation owners criticised the bonus scheme, saying it only helped large hotel chains or others who had enough resources to be able to absorb financial losses until they could claim tax credits at a later date.

The tourism ministry has proposed the following changes to the way the scheme works under an amendment to the support decree, which is set to be discussed in early May:

  • Postponing the expiry of the scheme from December 2021 to summer 2022;
  • Allowing travel agencies to claim the discounts on behalf of clients
  • Allowing the bonus to be divided between several business or used in installments over several trips.

For now, here’s how the bonus worked in summer 2020:

Who can claim the ‘holiday bonus’?

There are two conditions:

1) It’s for residents, not overseas visitors: you must pay taxes in Italy, since part of the bonus takes the form of a tax deduction.

2) It’s for lower-income households: your combined income, as calculated on your ISEE or ‘Equivalent Economic Situation Indicator’, should total no more than €40,000 per year.

Families, couples and individuals can all apply for the bonus. If you’re applying as a couple or family it will be paid per household, not per person.

It is not yet known if people who used the bonus in 2020 would be eligible to claim a second time in 2021.

How much is it worth?

The government last year offered €150 to people travelling on their own, €300 for two people and €500 for families of three or more.

How does it work?

To claim the holiday bonus, you’ll need to use the government’s IO app and either your electronic ID card or SPID.

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The bonus is paid out in two ways: 80 percent of the cost will be shouldered upfront by your hotel, B&B, agriturismo or other accommodation and should be discounted directly from your bill. 

Under current rules, you’ll only be able to claim the bonus from a single place of accommodation

Accommodation owners must then claim the money back from the government in the form of a tax credit. They’ll need to make a note of your personal codice fiscale (tax code) and issue a complete bill or receipt.

The 2020 decree stated that payment must be made directly by the guest or via a travel agent, but not through any other kind of portal or intermediary such as Airbnb or Booking.com.

It was then up to guests to claim the remaining 20 percent of the bonus, which can be deducted from your tax bill for the financial year.

Some of these rules could change once the extended support decree, known in Italian as the decreto milleproroghe (decree of a thousand extensions), is approved in May.

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TOURISM

Why Italian resorts are struggling to fill jobs this summer

Italy's tourist season is expected to be back in full swing this year - but will there be enough workers to meet the demand?

Why Italian resorts are struggling to fill jobs this summer

Italy’s tourist numbers are booming, sparking hopes that the industry could see a return to something not far off pre-pandemic levels by the summer.

There’s just one catch: there aren’t nearly enough workers signing up for seasonal jobs this year to supply all that demand.

READ ALSO: Will tourism in Italy return to pre-pandemic levels this year?

“There’s a 20 percent staff shortage, the situation is dramatic,” Fulvio Griffa, president of the Italian tourist operators federation Fiepet Confesercenti, told the Repubblica news daily.

Estimates for how many workers Italy is missing this season range from 70,000 (the figure given by the small and medium enterprise federation Conflavoro PMI) to 300-350,000 (the most recent estimate from Tourism Minister Massimo Garavaglia, who last month quoted 250,000).

Whatever the exact number is, everyone agrees: it’s a big problem.

READ ALSO: Dining outdoors and hiking: How visitors plan to holiday in Italy this summer

Italy isn’t the only European country facing this issue. France is also short an estimated 300,000 seasonal workers this year. Spain is down 50,000 waiters, and Austria is missing 15,000 hired hands across its food and tourism sectors.

Italy’s economy, however, is particularly dependent on tourism. If the job vacancies can’t be filled and resorts are unable to meet the demand anticipated this summer, the country stands to lose an estimated  €6.5 billion.

Italy's tourism businesses are missing an estimated 20 percent of workers.
Italy’s tourism businesses are missing an estimated 20 percent of workers. Photo: Alberto Pizzoli/AFP

“After two years of pandemic, it would be a sensational joke to miss out on a summer season that is expected to recover strongly due to the absence of workers,” said Vittorio Messina, president of the Assoturismo Confesercenti tourist association.

Different political factions disagree as to exactly what (and who) is to blame for the lack of interest from applicants.

READ ALSO: Travel in Italy and Covid rules this summer: what to expect

Italy’s tourism minister Massimo Garavaglia, a member of the right wing League party, has singled out the reddito di cittadinanza, or ‘citizen’s income’ social security benefit introduced by the populist Five Star Movement in 2019 for making unemployment preferable to insecure, underpaid seasonal work.

Bernabò Bocca, the president of the hoteliers association Federalberghi, agrees with him – along with large numbers of small business owners.

“What’s going to make an unemployed person come to me for 1,300 euros a month if he can stay sprawled on the beach and live off the damned citizenship income?” complained an anonymous restauranteur interviewed by the Corriere della Sera news daily.

“Before Covid, I had a stack of resumes this high on my desk in April. Now I’m forced to check emails every ten minutes hoping someone will come forward. Nothing like this had ever happened to me.” 

READ ALSO: MAP: The best Italian villages to visit this year

Italy is experiencing a dire shortage of workers this tourist season.
Italy is experiencing a dire shortage of workers this tourist season. Photo: Andrea Pattaro / AFP.

Five Star MPs, however, argue that the focus on the unemployment benefit is a distraction from the real issues of job insecurity and irregular contracts.

There appears to be some merit to that theory. A recent survey of 1,650 seasonal workers found that only 3 percent of the people who didn’t work in the 2021 tourist season opted out due to the reddito di cittadinza.

In fact the majority (75 percent) of respondents who ended up not working over the 2021 season said they had searched for jobs but couldn’t find any openings because the Covid situation had made it too uncertain for companies to hire in advance.

READ ALSO: MAP: Which regions of Italy have the most Blue Flag beaches?

Others said the most of jobs that were advertised were only for a 2-3 month duration, half the length of the season (again, due to Covid uncertainty), making it not worth their while to relocate.

Giancarlo Banchieri, a hotelier who is also president of the Confesercenti business federation, agrees that Covid has been the main factor in pushing workers away from the industry, highlighting “the sense of precariousness that this job has taken on in the last two years: many people have abandoned it for fear of the uncertainty of a sector that has experienced a terrible time.”

The instability brought about by two years of Covid restrictions has pushed many workers away from the tourism sector.
The instability brought about by two years of Covid restrictions has pushed many workers away from the tourism sector. Photo: Andrea Pattaro / AFP.

“I said goodbye to at least seven employees, and none of them are sitting at home on the citizen’s income,” Banchieri told Repubblica. “They have all reinvented themselves elsewhere; some are plumbers, others work in the municipality.”

READ ALSO: OPINION: Mass tourism is back in Italy – but the way we travel is changing

To counteract the problem, Garavaglia has proposed three measures: increasing the numbers of visas available for seasonal workers coming from abroad; allowing people to work in summer jobs while continuing to receive 50 percent of their citizen’s income; and reintroducing a voucher system that allows casual workers to receive the same kinds of welfare and social security benefits as those on more formal contracts.

Whether these will be enough to save Italy’s 2022 tourist season remains to be seen, but at this stage industry operators will take whatever fixes are offered.

“The sector is in such a dire situation that any common sense proposals much be welcomed,” the Federalberghi president Bocca told journalists.

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