The government approves incentives that allow recipients to increase their income for a year if they improve their employment status
New spin on the Minimum Vital Income (IMV) when it has been running for more than two years. From 2023, the beneficiaries of this support can receive a bonus if they get a job that allows them to increase their amount to about 17,000 euros per year. The Council of Ministers on Tuesday approved the scheme of employment incentives that aims to promote the integration of the recipients of this income into the labor market and thus prevent them from falling into the trap of not looking for work or increasing their income for fear of loss their benefit or see its amount reduced.
Although the IMV is already compatible with work, that job until now acted as a cut of this aid (that is, the salary received was deducted). But from January, when it comes into effect, it will work as a boost to your income because it guarantees that if a minimum income recipient finds a job or improves his salary, he will always earn more than if he didn’t. And you don’t have to apply for it, but it is automatically activated when the National Social Security Office (INSS) carries out its annual review, usually in the month of April.
For this reason, IMV beneficiaries who have undergone changes in employment income – either because they found a job or because they extended their hours or improved their salary – have automatic access to the following year to receive an incentive for up to twelve months, which means they can always increase their income to around 17,000 euros per year, depending on several variables, including their family situation.
How is the amount calculated? The method is complex, which is why the Department of Social Security will launch an online simulator in the coming weeks so that beneficiaries can calculate how much they can charge if they find a new job or extend the hours of their contract and see that they do. compensates.
What the employment incentive does is that part of the increase in wage income does not count when calculating the IMV, which means that in practice you get more income than before for every euro you earn in labor income. The improvement is gradual and more intense to support increases in initial wages, and is also greater for those moving from inactivity to activity, moderating as the recipient improves their income from work.
The amount therefore depends on three factors. In the first place, the composition of the household: this will be greater for minors, and in addition, single-parent families and people with disabilities will receive special treatment. Second, the incentive varies according to the salary increase, so that 100% of the income from employment to 60% of the guaranteed income is subsidized; that is, for every dollar the recipient earns, he gets one dollar more in disposable income. The incentive is softened and you receive between 20% and 40% more from 60% work income from IMV. Finally, the amount will also depend on the type of labor movement: it will be higher for people who were outside the labor market and somewhat lower for those already in work.
So for example a person who lives alone and receives a minimum income of 5,899 euros, if he finds a job with an income of 1,000 euros, this salary will be 100% subsidized and he would earn 6,899 euros per year. If instead of 1,000 euros he earned 4,500 from his job, he would receive a total of 9,727 euros per year.
In addition, the incentive is maintained even when the salary increase exceeds 100% of the minimum income, albeit in an ever-decreasing manner, until it ends when the income increase reaches 1.7 times the benefit, thus the maximum a person can afford. could get would be about €17,000 a year, more than the minimum wage.
This employment allowance is temporary, so that it will work for a year, and will only be applied again during the revision when the recipient has increased his wage income again, in order to encourage him to further improve his inclusion situation.
The Ministry of Social Security estimates that one in five households can benefit from these incentives, i.e. about 100,000 families, and that this measure does not entail any tax costs, but rather the opposite, that it can even increase income, as the IMV is reduced when working and also increases the premiums. In addition, they estimate that for every euro of incentives, between 1 and 3.5 euros can be raised.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
