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

The Italian government will soon start making the first of its €200 payments intended to offset the rising cost of living. But who will be eligible, and what do you need to do to claim? Here's the latest official information.

UPDATE: Who can claim Italy's €200 cost of living bonus?
A worker mans a tractor cleaning a private beach in Fregene, northwest of Rome. Here's how workers can access the €200 cost of living bonus. (Photo by FILIPPO MONTEFORTE / AFP)

Italian authorities have confirmed the one-off ‘bonus’ payment of €200 will be made to some 30 million people in June and July.

The payments were announced in May alongside other government measures aimed at offsetting the soaring cost of living, such as extending energy bill discounts and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

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.

But since the initial announcement there has been widespread confusion about how people can access the bonus.

Things became clearer for some this week after Italy’s social security and pensions agency (INPS or the Istituto nazionale della previdenza sociale) released guidelines on claiming the bonus – so far, for those in employment, pensioners and certain types of part-time workers.

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

The bonus will also be available to the self-employed, seasonal and domestic workers, the unemployed, and those receiving Italy’s ‘citizen’s income’ benefit.

Still to be defined, however, is how people in these categories will be able to claim. More information is expected to be published in a separate government decree.

Based on the current INPS guidance, here’s what we know so far:

How do you claim?

If you’re a state employee or a pensioner, the payment will be made automatically – those entitled to the bonus will be identified by the Ministry of Economy and Finance and INPS.

If you work in the private sector, the €200 should be included in your July pay packet (or June as the case may be: see below) and the paperwork will be handled by the employer.

All other categories, including the self-employed and professionals registered with INPS, still have no instructions on how to apply for the bonus. A decree or other further guidance is expected to be published in the coming weeks.

Certain part-time workers or those with particular employment relationships, such as jobs that entail working in June but not July, will receive the funds early to account for not receiving a pay check in July.

INPS also stipulated that for the bonus to be paid, the employment relationship must exist in July 2022. It’s not yet clear what that means for employees on contracts that cease to exist from July 1st.

The Local will continue to provide updates on this when details are released.

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PROPERTY

PROPERTY: Is this the end of Italy’s building ‘superbonus’?

As state funds for Italy's popular building 'superbonus' have already been exhausted, Italian authorities are reportedly considering halting any further extensions to the discount scheme.

PROPERTY: Is this the end of Italy's building 'superbonus'?

The Italian government is considering yet more changes for Italy’s so-called building ‘superbonus 110‘, as the allocated budget for the building incentive has already been exceeded, while renovation projects continue to wait in a queue.

According to the latest data from ENEA (Italy’s national agency for new technologies, energy and sustainable economic development), the approximately €33.3 billion that was earmarked for the scheme until 2025 has already gone over by some €400 million.

That makes a total of €33.7 million in claims up until May 31st, 2022.

This means that not only have the Superbonus funds run out, they have also been claimed in excess, potentially meaning that the government could ask for the money back.

In the two years since it was introduced, the building discount scheme has given homeowners the chance to claim a tax deduction of up to 110 percent of the cost of renovation work.

READ ALSO: Nine things we’ve learned about claiming Italy’s building ‘superbonus’

Building jobs covered by the bonus are related to making energy-efficiency upgrades and reducing seismic risk, with the aim of kickstarting Italy’s post-pandemic economic recovery and its construction sector.

The credit transfer system is hampering accessing Italy’s ‘superbonus 110’. Photo by Guilherme Cunha on Unsplash

But the scheme has been beset with delays due to a raft of reasons, including its popularity creating soaring demand, supply chain issues, fraudulent claims, multiple changes to its rules and regulations and a blocking to the credit transfer system – that is, the way people access the government funds to pay for the building work.

These setbacks have caused some homeowners to abandon their plans altogether, or have left many in the middle of works concerned about whether they’ll able to finish their renovation projects in time.

Despite the changes and blockages, however, the bonus has in some way been heralded as a success, considering the vast amount of claims already made.

But what does that mean for those still stuck in the process with works waiting to start or not yet completed?

Property owners who have benefited in part from the subsidies for building renovation work could see their construction site stopped and their funding demanded back, as construction companies are unable to collect the credit.

READ ALSO: Italy’s building superbonus: What’s the problem with credit transfers?

Although no official government statement has yet been made, Italian media reports indicate that, after its latest extension, the authorities don’t intend to roll on the scheme any further beyond 2022 for owners of single family homes.

There have been multiple deadline extensions for this category of property in response to ongoing delays, but the government has ruled out any further lengthening to the current timeframe, reported Il Sole 24 Ore.

As things stand, single unit home owners have until September 30th to complete 30 percent of the overall works, with a final deadline of December 31st, 2022 for all renovations to be completed.

Without further financing and an unblocking of the credit system, those carrying out renovation jobs could find themselves with stalled construction sites, half-finished homes or having to give any claimed money back.

Claiming Italy’s superbonus has been mired by delays and bureaucracy. Photo by Laughing Cynic on Unsplash

The risk to both companies and individuals has prompted criticism from various sectors, as jobs, futures and a continuing stock of energy inefficient houses hang in the balance.

READ ALSO: How to stay out of trouble when renovating your Italian property

“If the government wants the death of the superbonus, it should come and say so… knowing that it is telling companies to go bankrupt,” stated the president of the Productive Businesses Commission, Martina Nardi.

Earlier this month, the CNA (Confederazione Nazionale dell’Artigianato e della Piccola e Media Impresa), which represents Italian small business owners, said some 33,000 businesses are at risk of bankruptcy due to blockages.

Calls to unblock the credit transfer system and overcome the stalemate continue as impending deadlines cause increasing alarm and frustration.

Opening up the credit transfer system would allow construction companies to convert their credit into liquidity, that is, actual money, and thereby complete works already started.

The National Confederation of Craftsmen and Small and Medium Enterprises has spoken of difficulties on the part of “thousands of companies in the construction sector that are unable to transfer tax credits linked to bonuses for the redevelopment of buildings due to the freezing of the market”.

In other words, projects continue to face blockages until building companies can be sure that they’ll receive the money they were granted.

READ ALSO: The hidden costs of buying a home in Italy

In an open letter to Italy’s prime minister Mario Draghi, one architect described the situation as an “almost unprecedented liquidity crisis” that is pushing the country to “the brink of the deepest economic and social crisis ever seen and managed”.

“It has been two years of tribulation, this we can say today, that have turned genius into monstrosity due to the constant changes, corrections and adjustments that keep everyone in suspense,” wrote Daniele Menichini.

The government has been criticised for doing the opposite of what they stated with the superbonus, instead causing further economic downturn. Photo by Damien MEYER / AFP

“The situation that is looming at this time is of uncertainty and insecurity, in which society will hit a wall because of the blocked credits and the blocking of all those projects that were about to start,” he added.

While the government has expressed no intention to refinance the scheme beyond 2022 for single family homes, a glimmer of hope remains via an opening up of credit in a further expected amendment to the superbonus.

READ ALSO:

Easing the bottleneck would ensure that at least the projects that will meet the 2022 deadlines can be financed and completed.

To do this, the government is reportedly considering extending the ability to obtain credit to other parties besides banks, such as construction companies themselves. In doing so, it removes one extra bureaucratic hurdle and would unlock the current standstill due to many banks no longer buying credit.

The question of how the authorities will foot the bill for the already overrun budget still remains, with some reports suggesting an extra financial boost from the government will be needed until the end of 2022.

Other possibilities point towards allowing firms to carry over their credit surpluses until next year, to overcome the obligation to offset the credit this year.

Meanwhile, some categories of building have until 2025 to claim state funds with declining amounts available each year, but the future financing of which still isn’t clear.

The Local will continue to provide updates on this.

See more in our Italian property section.

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