MISSOC Meeting, 7th June 2016 Minimum Income Schemes in Europe A study of national policies Hugh Frazer European Social Policy Network [ESPN] Maynooth University, Ireland

Introductory remarks - 1 35 national reports 28 Member States 7 Non EU countries (CH, IS, LI, MK, NO, RS, TR) 1 Synthesis Report Hugh Frazer & Eric Marlier (Network Management Team) SR and national reports should be read together Update of 2009 study by EU Network of Independent Experts on Social Inclusion Definition “minimum income schemes are understood as being essentially income support schemes for people of working age (whether in or out of work) which provide a means-tested safety net for those not eligible for social insurance payments or those whose entitlement to these payments has expired. They are in effect last resort schemes, which are intended to prevent destitution and to ensure a decent minimum standard of living for individuals and their dependants when they have no other or insufficient means of financial support.”

Introductory remarks - 2 Key Questions How sufficient are minimum income schemes in terms of adequacy, coverage and take-up , and what improvements are required in these regards? How effective are minimum income schemes in protecting from and preventing poverty and social exclusion? To what extent are minimum income schemes effectively linked with other benefits and services so as to support recipients’ inclusion into the labour market (sustainable work) and what improvements are needed in this regard?

Introductory remarks - 3 Structure of Report Summary, Conclusions and Recommendations Overview of Main Features of Minimum Income Schemes Governance arrangements; Types of MI schemes and eligibility conditions; Rights based v discretionary benefits; Mechanisms for establishing levels of benefits and uprating; Conditionality rules; Duration; Transitions; Links with other social benefits and services Assessment of Adequacy, Coverage, Take-up and Impact Links to other two pillars of Active Inclusion Annexes Includes Summary Tables: Assessment of Minimum Income Schemes

MAIN FINDINGS

Five main types of MI Schemes 1. Simple and comprehensive schemes open to all with insufficient means to support themselves BE, CH, CY, CZ, DK, EE, ES [Basque country] , FI [Basic Social Assistance] , IS, IT [Bolzano, Friuli Venezia Giulia, Molise, Sardegna, Valle d’Aosta] , LI, LU, NL, NO, SE, SI, SK 2. Simple and non-categorical schemes but with rather restricted eligibility and coverage AT, EL, ES [Asturias, Cantabria, Castile-Leon, Navarre, Rioja], HR, HU, LT, PT, RS 3. General schemes of last resort with additional categorical benefits which cover most people in need of support DE, FI [Additional Social Assistance], IT [Basilicata, New Social Card, Puglia, Sicilia, Trento], LV, MK, PL, UK 4. Complex networks of different, often categorical and sometimes overlapping schemes which cover most people in need of support FR, IE, MT, RO 5. Very limited, partial or piecemeal schemes which are restricted to narrow categories of people and fail to cover many of those in need of support BG NB: boundaries between these categories are inevitably rather fluid

Adequacy of MI schemes Largely adequate – 5 countries (CH, CY, IS, LI, NL) Somewhat short of adequate level – 16 countries (AT, BE, DK, CZ, ES, FI, IE, IT [Bolzano, Trento], LT, LU, MT, NO, PL, SE, SI, UK) Very inadequate – 14 countries (BG, DE, EE, EL, FR, HR, HU, IT [Basilicata, Friuli Venezia Giulia, Molise, New Social Card, Puglia, Sardegna, Sicilia, Valle d’Aosta], LV, MK, PT, RO, RS, SK) Trends since 2009 positive in 10 countries (AT, CY, EE, FI, HR, IS, MT, PL, RS, SI) negative in 6 countries (BE, DK, HU, NO, SE, UK)

Coverage Comprehensive coverage of those in need of support over ½ countries Partial coverage due to restrictive eligibility conditions 9 countries (AT, ES [Basque country], HU, IT [Bolzano/Trento], LT, MK, PL, RS, UK) Very limited coverage 8 countries (BG, EL, ES, HR, IT [Basilicata, Friuli Venezia Giulia, Molise, New Social Card, Puglia, Sardegna, Sicilia, Valle d’Aosta], LV, PT, RO) Since 2009 Improved in 8 countries (AT, BE, CY, FI, LU, MT, RS, SI) Deteriorated in 7 countries (DK, FR, HU, MK, PT, RO, UK)

Take-up Lack of monitoring and research on extent of take up Fairly complete – 8 countries (BG, DK, EE, IE, IS, MT, NL, SK) Partial – majority of countries Quite limited – a few countries (ES [except Basque country], HR) Evolution since 2009 Positive in 6 countries (AT, BG, FI, IS, MT, RS) Negative in 6 countries (BE, CY, HU, RO, SI, SK)

Impact on poverty reduction Overall impact of MI schemes on poverty reduction is quite limited i.e. on reducing the number of people below the AROP threshold Strong - in 4 countries (IE, IS, NL, UK) Very limited - 14 countries (AT, BG, CY, DE, EE, EL, ES [except Basque country], FR, LV, MK, PL, PT, RO, SK) Trend since 2009 increased in only 5 countries (AT, EE, MT, PL, SI) got worse in 11 countries (BE, BG, CZ, DK, ES, HU, LT, NO, RO, SE, UK)

Impact on depth of poverty Bringing people closer to AROP threshold but not above it i.e. reducing severity of poverty without lifting people out of poverty Strong – 9 countries (AT, BE, CY, IE, IS, LI, LU, PT, UK) Very limited - 7 countries (ES, LT, LV, HU, MK, PL, SK) Trend since 2009 Positive in 6 countries (AT, CY, EE, IS, MT, SI) Negative in 9 countries (CZ, DK, ES, FI, HU, LT, PT, RO, UK)

Active inclusion approach Active Inclusion = strong links between the development of inclusive labour market policies, access to high quality services and adequate minimum income schemes so that they are mutually reinforcing and help to integrate people of working age into society and the labour market In ½ of countries increased emphasis on developing active labour market policies (ALMP) for people on MI schemes BUT too often not linked to also ensuring access to enabling services and to the development of a tailored approach

MI & link to ALMP Only mediumly effective in most countries and very ineffective in 6 (BG, EL, ES, LT, RO, RS) 2 main ways links are being strengthened greater emphasis on participation in ALMP support as a condition of continued receipt of MI (+ increased conditionality and use of sanctions) greater emphasis on registration with public employment services and/or signing of integration contracts Main barriers to developing effective links lack of capacity, skills and resources in public employment services and social assistance institutions lack of coordination and cooperation between services tendency to prioritise different groups in need of support who may be easier to reintegrate into the labour market (e.g. young people). Lack of assessment studies about effectiveness of ALMP for MI beneficiaries

MI & link to Quality Enabling Services Very effective – 4 countries (DK, IS, NO, SI) Mediumly effective – many countries Very ineffective – 8 countries (BG, DE, EL, ES, HR, HU, PL, RO) Trend since 2009 positive in 8 (AT, DK, ES, LT, LU, MK, MT, SI) & negative in 1 (HU) progress hindered by financial consolidation measures Key challenges to address improving coordination & integrated planning between services developing a one-stop-shop approach enhancing capacity of and resources available to services so as to increase accessibility and quality

Long-term dependency on MI A challenge for active inclusion approach Key factors which increase risk: poor health low education & qualifications dependent children and lack of affordable child care lack of suitable good quality/decently paid employment Inactivity traps resulting from high marginal effective tax rate and/or significant involvement in informal labour market various measures used to address problems: in-work benefits so that take-home income is increased by supplementing earned income with benefits partial disregard of earnings from means testing (sometimes for a fixed period) tapered withdrawal of benefits as income from work increases continuation of all or a percentage of MI benefits for a fixed period

Effectiveness of different types of schemes Picture is somewhat uneven Countries with “simple and comprehensive schemes” somewhat more likely to have schemes with adequate levels of MI benefits than is the case for other categories of MI schemes and most have fairly comprehensive coverage and over 1/3 have fairly complete take up Countries with “complex networks of different, often categorical and sometimes overlapping schemes” also perform well on coverage No clear-cut picture as to which types of scheme are most effective in reducing poverty rate or depth depends more on the particular details & generosity of each national (or regional) scheme Countries with “simple and comprehensive schemes” are most likely to develop very effective links between MI schemes and access to adequate services but same correlation not evident between MI schemes and ALMP measures

MAIN CONCLUSIONS

Main Conclusions 1-3 MIS vital role in alleviating worst impacts of poverty & social exclusion but reduce depth more than end poverty In many countries contribution still much too limited Lack of adequate payments Limited coverage Poor take up Poor administration Inadequate information Excessive bureaucracy & stigmatisation Progress since 2009 disappointing

Main Conclusions 4-6 Some improvement in developing an Active Inclusion approach But too often: narrowly focussed on employment measures Increasing conditionality and sanctions limits active inclusion approach Insufficient emphasis on integrated and tailored approach Simple and comprehensive schemes open to all with insufficient means to support themselves tend to perform better BUT not clear-cut in some cases complex networks of different, often categorical and sometimes overlapping schemes which cover most people in need of support do as well or better

Main Conclusions 7 “The adequacy and effectiveness of MI schemes are one of the fundamental building blocks of ensuring a truly Social Europe and they are a key investment in building a stronger society and economy. The objective of the current Commission to ensure a “triple-A” social rating for Europe could benefit from strengthening the adequacy and effectiveness of MI schemes within an overall active inclusion approach.” Very relevant to consultation on European Pillar of Social Rights

RECOMMENDATIONS

Put universal social protection & adequate income for all at heart of EU policy making Agree set of common principles, definitions & methods for adequate MI in all MS then consider EU legislative initiative in this field to cement role of MI schemes can be key part of establishing benchmarks & minimum standards for triple-A Social Europe Make MI schemes core part of achieving Europe 2020 poverty target core message of each Annual Growth Survey & MS annual reporting key element in monitoring and reporting on European Semester Esp. adequacy of payments and impact on poverty reduction Key priority for CSRs Key element of monitoring and reporting on MS receiving EU financial assistance

Provide for regular uprating Transparent & effective mechanism for annual uprating value of MI in all countries Keep in line with inflation and rises in standards of living

Increasing coverage Move from very complex and fragmented to more comprehensive schemes Countries with low coverage should review conditions Amend schemes to better cover groups experiencing poverty E.g. homeless, refugees, asylum seekers, undocumented migrants, Roma, young people Reduce high levels of administrative discretion Clear & consistent criteria Effective appeals process

Reducing non-take-up Put in place arrangements to monitor levels & analyse reasons Introduce strategies to reduce non-take-up and monitor and report regularly on their effectiveness

Tackling disincentives COM and SPC should research & promote ways of addressing the dual challenge of ensuring that: MI schemes are efficient in removing disincentives & that those in work lifted out of poverty The adequacy of MI schemes is guaranteed

Promoting an active inclusion approach Better target ALMPs at MI recipients Improve access of MI recipients to quality services Improve coordination of agencies responsible for MI schemes, active labour market measures and enabling services esp. improve public employment and social assistance cooperation Foster one-stop-shop/single point of contact arrangements Develop tools for assessing effectiveness of measures to access employment

Enhancing exchange of learning and good practice COM and SPC document and disseminate good practice & promote peer reviews - e.g on: regular uprating improving coverage and take-up addressing disincentives enhancing links between MI schemes, active labour market measures, access to quality services developing coordinated, single point of contact approaches at local level

Summary Table K J L Adequacy Coveragep Take-up   Adequacy Coveragep Take-up Impact on poverty reduction (1) Impact on poverty reduction (2) Link to ALMP Link to quality services Now Evol. AT K J L BE BG CY CZ DE DK EE EL ES FI FR HR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK CH IS LI MK NO RS

SR and Country Reports Synthesis Report and 35 Country reports (+ other ESPN publications) are available at: http://ec.europa.eu/social/main.jsp?catId=1135&langId=en