1. 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

2. 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.”

3. 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?

4. 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

5. MAIN FINDINGS

6. 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

7. 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)

8. 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)

9. 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)

10. 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)

11. 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)

12. 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

13. 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

14. 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

15. 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

16. 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

17. MAIN CONCLUSIONS

18. 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

19. 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

20. 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

21. RECOMMENDATIONS

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. SR and Country Reports
Synthesis Report and 35 Country reports (+ other ESPN publications) are available at: