With circular no. 69 issued on 29 May 2024, the Italian Social Security Institute (INPS) provided operational guidelines for the application of the rules governing how people can use the mechanism to make payments to cover periods when they did not pay any contributions, as reintroduced by the 2024 Budget Law for the period 2024-2025.
The option to use this mechanism is available to employees (i.e. enrolled in AGO, that is the general mandatory social security scheme), people enrolled in the special schemes for self-employed people and the separate scheme (Gestione separata) who did not have contribution seniority on 31 December 1995 and who do not already receive a pension.
The following are excluded: private pension funds (i.e. Casse private) for the self-employed, foreign social security systems and European Union pension funds.
The mechanism can be used to cover a total of five years of unpaid contributions, with these years not having to be consecutive.
Additionally, the periods in question must be after 31 December 1995 and before 1 January 2024. They should fall between the year of the first contribution and the year of the last contribution to the social security schemes specified in the rules, not to the scheme in which one is planning to make use of the mechanism.
Only periods not subject to mandatory contributions are eligible for such payments. As a result, the mechanism cannot be used to compensate for periods during which the employee was supposed to pay social security. This exclusion necessarily applies even if the obligation to pay contributions has already lapsed.
Periods for which such payments have been made are equivalent to periods of work and are used to determine the right to a pension and the amount of the pension
Having seniority before 1996, even if this occurs from using this mechanism, will result in the automatic cancellation of the payment with the return of the amount paid.
Pension for the people using thys possibility will be calculated using “contribution system”. The corresponding amount is consequently determined using the “percentage” calculation mechanism, applying the funding contribution rate in force on the date of application in the pension scheme into which the payment is made.
The amount payable is calculated on the basis of the salary subject to contributions for the 12 months immediately prior to the date of application, using the current contribution rate for the scheme in which the payment will be made, with this amount then adjusted in relation to the period of the payment.
The deadline for the application is 31 December 2025.
The application for redemption may be submitted by the person concerned or his survivors or, within the second degree, his relatives and relatives-in-law. The contribution paid is deductible from the total income.
For workers in the private sector, the redemption request may also be submitted by the insured’s employer, who may bear the related cost by allocating the production premiums due to the worker for this purpose. In this case, the charge paid is deductible from business and self-employment income.
The redemption charge may be paid as a lump sum or in a maximum of 120 monthly instalments, each of no less than EUR 30, with no interest charged on the instalment and the balance to be paid by the time the pension takes effect.
If payments are interrupted, the period is recognised for the amount paid.
