Minimum incomes set by Member States need to be adapted to keep up with the rising cost of living and reduce the number of working poor. However, they should not discourage recipients of these minimum incomes from returning to work.
This is the message the Commission delivered on Wednesday 28 September when it presented to the Member States an EU Council Recommendation on ‘Adequate Minimum Income: Ensuring Active Inclusion’, accompanied by a Communication on ‘The distributional impact of Member States’ policies’ and how to better assess it.
A recommendation that comes “at a very special time”, with an increased risk of poverty after Covid-19 and with the energy crisis, commented Commission Vice-President Valdis Dombrovskis.
In particular, the recommendation calls on Member States to achieve adequate minimum incomes by 2030, in line with the EU’s social objectives for 2030 to reduce the number of people at risk of poverty by at least 15 million.
The recommendation has several pillars, including the adequacy of minimum incomes following a clear methodology or their adaptation to the cost of living with a review at least once a year. The accessibility of minimum incomes, where 20% of the working poor in the EU are not eligible, is another pillar, with the recommendation calling for a reassessment of the age limit or length of legal residence criteria for foreigners. The pillar of active support for access to the labour market is particularly important for the Commission, insisted the Commissioner for Jobs and Social Rights, Nicolas Schmit.
“The current coordination between income support policies and incentives for (re)integration into the labour market for those who can work remains insufficient”, the Commission explains. “In particular, the design of income support should not erode incentives to work or create poverty traps (or low-wage traps for people who work and receive income support)”.
“Activation requirements (including sanctions) must also be accompanied by support services, such as counselling, coaching or job search assistance to be more effective”.
“Positive employment incentives supporting a gradual transition to the labour market, while maintaining the right to a minimum income for a certain period during employment, generally yield positive results”, the Commission says as well.
For the European Trade Union Confederation (ETUC), the recommendation contains many positive points, but “does not say how to ensure the adequacy of the minimum income” or address “the very real risk of simply subsidising companies that pay unacceptable wages”.
The Greens/EFA group in the European Parliament welcomed the proposal, but called for a directive on minimum incomes “when more than a fifth of the EU population is currently at risk of poverty”.
Link: https://aeur.eu/f/3b6 (Original version in French by Solenn Paulic)