COMMISSION STAFF WORKING DOCUMENT Follow-up on the implementation by the Member States of the 2008 European Commission recommendation on active inclusion of people excluded from the labour market - Towards a social investment approach Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards Social Investment for Growth and Cohesion - including implementing the European Social Fund 2014-2020
Date: 2013-02-20
Institutions: European Commission
Subjects: European Social Fund, European social policy, economic and social cohesion, economic recession, elderly person, job creation, marginalisation, population forecast, poverty, social cost, young worker

EUROPEAN 
COMMISSION 

Brussels, 20.2.2013  
SWD(2013) 39 final 

Social Investment Package 

COMMISSION STAFF WORKING DOCUMENT 

Follow-up on the implementation  by the Member States of the 2008 European 
Commission recommendation on active inclusion of people excluded from the labour 
market - Towards a social investment approach 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Towards Social Investment for Growth and Cohesion - including implementing the 
European Social Fund  
2014-2020 

{COM(2013) 83 final} 
{SWD(2013) 38 final} 
{SWD(2013) 40 final} 
{SWD(2013) 41 final} 
{SWD(2013) 42 final} 
{SWD(2013) 43 final} 
{SWD(2013) 44 final}

EN 

   EN 

 
 
 
 
 
  
 
Contents 

1.  ACTIVE INCLUSION: A EUROPEAN STRATEGY TO FIGHT SOCIAL 

EXCLUSION .............................................................................................................. 3 

1.1.  Background........................................................................................................ 3 

1.2.  A brief synthesis ................................................................................................ 5 

2.  GUIDANCE ON ACTIVE INCLUSION ................................................................... 9 

2.1.  Adequate income support .................................................................................. 9 

2.1.1.  What money can buy ........................................................................... 9 

2.1.2.  Gradual phasing out of income support............................................. 10 

2.1.3. 

Improving  efficiency  and  effectiveness:  reaching  out  to  the 
most disadvantaged ........................................................................... 11 

2.2. 

Inclusive labour markets.................................................................................. 12 

2.2.1.  Proper sequencing and targeting of activation .................................. 12 

2.2.2.  Providing  optimal  tax  and  benefit  support  to  encourage 

employment and reduce in-work poverty.......................................... 13 

2.3.  Access to enabling services ............................................................................. 14 

2.3.1. 

Investment in relevant services ......................................................... 15 

2.3.2.  Personalised approach: high quality case handlers ........................... 15 

2.4.  Cross-cutting policy areas ............................................................................... 15 

3.  POVERTY  AND  SOCIAL  EXCLUSION  AMONG  PEOPLE  OF 
WORKING  AGE:  MAIN  DEVELOPMENTS  AND  COUNTRY 
CHARACTERISTICS............................................................................................... 16 

3.1.  Main trends since the Recommendation’s adoption........................................ 16 

3.2.  Grouping countries according to their main challenges .................................. 22 

4.  REVIEW  OF  ACTIVE  INCLUSION  STRATEGIES  AT  NATIONAL 

LEVEL ...................................................................................................................... 24 

4.1.  Adequate income support ................................................................................ 24 

4.1.1. 

Institutional  features  of  minimum  income  schemes  in  EU 
countries ............................................................................................ 26 

4.1.2.  The  non-take  up  of  benefits:  estimated  extent,  causes  and 

policy-relevant consequences............................................................ 28 

4.1.3.  Minimum income schemes: the issue of adequacy ........................... 29 

4.2. 

Inclusive labour market measures ................................................................... 31 

4.2.1.  The working poor in the EU.............................................................. 32 

Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË — Tel. +32 22991111 

 
 
 
4.2.2.  Active  Labour  Market  Policies  (ALMPs)  for  the  people 

furthest from the labour market......................................................... 34 

4.2.3. 

Income support and work incentives................................................. 37 

4.3.  Access to quality services................................................................................ 37 

4.3.1.  Access to services in the Member States........................................... 38 

5.  COMPREHENSIVE 

INTEGRATED 
IMPLEMENTATION,  VERTICAL  COORDINATION,  AND  ACTIVE 
PARTICIPATION OF RELEVANT ACTORS........................................................ 43 

DESIGN, 

POLICY 

5.1. 

Integrated Approaches..................................................................................... 43 

5.2.  Participation of relevant actors........................................................................ 45 

5.3.  Case studies –Recent developments at national level ..................................... 46 

5.4.  Budgetary effects of active inclusion strategies .............................................. 49 

6.  COORDINATING EUROPEAN SOCIAL POLICIES: THE ROLE OF THE 
EUROPEAN  UNION  IN  PROMOTING  THE  ACTIVE  INCLUSION 
STRATEGY .............................................................................................................. 50 

6.1.  On-going  monitoring  and  evaluation  through  the  Europe  2020 

Strategy............................................................................................................ 52 

6.2.  Other relevant initiatives ................................................................................. 54 

7.  FOLLOW-UP............................................................................................................ 56 

8.  ANNEX ..................................................................................................................... 58 

2 

 
 
1.  ACTIVE INCLUSION: A EUROPEAN STRATEGY TO FIGHT SOCIAL EXCLUSION 

Active  inclusion  entails  reaching  out  to  the  most  disadvantaged  and  enabling  them  to 
fully  participate  in  society,  including  the  labour  market.  It  is  one  of  the  priority  social 
policy  areas  at  EU  level.  The  2008  European  Commission  recommendation  on  active 
inclusion  introduced  an  ambitious  plan  for  Member  States  based  on  the  integrated 
implementation of three pillars: adequate income support, inclusive labour markets, and 
access to quality services. 

Four  years  later,  it  is  time  to  assess  how  Member  States  have  responded.  This  Staff 
Working  Document  (SWD)  prepared  by  the  Commission  with  the  support  of  various 
stakeholders has identified the main challenges to active inclusion implementation. These 
challenges  include  inadequacy,  low  coverage,  and  non-take-up  of  minimum  income 
support, possible disincentives to work, in-work poverty, insufficient access to services, 
and  lack  of  an  integrated  approach  (including  inadequate  vertical  and  horizontal 
coordination,  and  lack  of  single  access  points).  Intensified  budgetary  constraints  in  the 
context  of  the  economic  crisis  and  increasing  demographic  dependency  ratios1  have 
exacerbated the challenges to the proper implementation of active inclusion strategies.   

The above challenges signal the importance for Member States and the Union to move 
towards  a  social  investment  approach  highlighting  —  among  others  —  the  long-term 
benefits of active inclusion. Social investment seeks to develop people’s human capital, 
improving  their  ability  to  participate  in  the  labour  market,  while  also  preventing  the 
greater social and economic costs that can arise from an unskilled workforce and people 
experiencing  social  exclusion.  The  successful  implementation  of  active  inclusion 
strategies  will  require  well-coordinated  and  intensified  efforts  at  local,  national,  and 
European  levels,  and  this  document  contains  concrete  policy  guidance  to  assist 
governments, civil society organisations, and practitioners.   

1.1.  Background 

On 3 October 2008, the European Commission adopted a Recommendation on the active 
inclusion  of  people  excluded  from  the  labour  market.  This  promoted  a  comprehensive 
strategy  based  on  integrating  three  pillars  of  social  policy:  adequate  income  support, 
inclusive  labour  markets,  and  access  to  quality  services.2  The  Council  and  European 
Parliament endorsed the strategy.3 4 

1   See SWD on Evidence on Demographic and Social Trends, SWD(2013) 38. 

2   See Commission Recommendation of 3.10.2008 on the active inclusion of people excluded from the 

labour market (2008/867/EC published in the OJ L. 307/11 of 18.11.2008). . 

3   See  Council  Conclusions  of  17  December  2008  on  ‘Common  active  inclusion  principles  to  combat 

poverty more effectively’. 

4   See European Parliament Resolution of 6.5.2009 on the active inclusion of people excluded from the 

labour market (2008/2335(INI)). 

3 

 
 
  
 
                                                 
Active  inclusion  strategies  aim  to  help  integrate  those  who  can  work  into  sustainable, 
quality  employment,  and  to  provide  enough  resources  with  which  to  live  in  dignity  for 
those who cannot. The three pillars cited above can achieve this by: 

-  Providing  adequate,  well-designed  income  support  for  those  who  need  it,  while 
helping  them  back  into  jobs,  for  example  by  linking  out-of-work  and  in-work 
benefits. 

-  Ensuring  inclusive  labour  markets  and  employment  policies  that  address  the  needs 

of those least likely to get a job. 

-  Providing quality social services to support active social participation. 

The recommendation also calls for: 

(1)   comprehensive policy design (by considering joint impacts, possible synergies 
and trade-offs), 

(2)    integrated implementation, 

(3)    policy coordination among various levels of governments, and 

(4)  active  participation  of  civil  society  organisations 
implementation and evaluation strategies. 

in 

the  development, 

The  Commission  has  stressed  the  importance  of  integrating  active  inclusion  policies. 
Piecemeal implementation will not achieve the results that a concerted effort on all three 
fronts  can  bring  about  to  get  people  back  into  jobs,  even  if  they  have  been  among  the 
long-term unemployed. 

Active  inclusion  fits  well  into  the  life-cycle  approach  taken  by  the  Social  Investment 
Package,  where  exposure  to  the  risk  of  poverty  and  exclusion  is  not  static.  A  well-
designed active inclusion strategy should enable individuals to quickly return to society, 
preferably  through  participation  in  the  labour  market.  The  recommendation  emphasises 
the  importance  of  investing  in  human  capital,  in  line  with  the  Social  Investment 
Package.  Strengthening  inclusive  labour  markets  should  be  done  through  ‘inclusive 
education  and  training  policies’  that  adapt  to  ‘new  competence  requirements’  and  ‘the 
need  for  digital  skills.’  Quality  services  also  contribute  to  the  development  of  human 
capital. 

The  pillars  of  active  inclusion  are  linked  to  social  investment.  The  one-stop-shop 
model  promoted  by  the  active  inclusion  strategy  contributes  to  the  efficiency  and 
effectiveness of social protection systems. Activating and enabling policies and adequate 
livelihoods  promote  policies  of  inclusive  labour  markets  and  adequate  income  support. 
Investing  in  children  and  young  people  reinforces  the  importance  of  enabling  services. 
Thus,  the  active  inclusion  strategy  forms  an  integral  part  of  the  social  investment 
approach. 

At the outbreak of the economic crisis, the European Commission engaged in a concerted 
effort to realign European economies onto the path of smart, inclusive growth. This was 
reflected  in  the  launch  of  the  Europe  2020  Strategy.  Member  States  endorsed  this 
strategy, and most made explicit commitments towards achieving the targets — including 
those on poverty.5 

5   European Council Conclusions, 17 June 2010, EUCO 13/10. 

4 

 
 
                                                 
Three of the five headline targets of the Europe 2020 Strategy are related to the active 
inclusion policy. Pillar 2 of the active inclusion strategy (inclusive labour markets) which 
focuses on activating those furthest from the labour market is key for the achievement of 
the employment target (75 % of those between the ages of 20 and 64 to be employed). 
The  education  goals  can  also  be  facilitated  through  active  inclusion  strategies  by 
focusing  on  services  (such  as  training,  education)  for  those  who  are  disadvantaged. 
Effective  active  inclusion  is  perhaps  most  relevant  for  reducing  poverty  (at  least  20 
million people fewer in poverty or at risk of it and social exclusion). Those furthest from 
the labour market are the core target of the active inclusion strategy. 
The European Platform against Poverty and Social Exclusion,6 one of Europe 2020’s 
seven  flagship  initiatives,  argues  that  with  the  active  inclusion  strategy,  the  EU  has  a 
common set of principles to fight against poverty. 

The adoption of the 2008 recommendation coincided with the start of the global financial 
crisis, which had a significant impact on the socio-economic environment. The financial 
crisis,  followed  by  the  sovereign  debt  crisis  in  Europe  forced  many  governments  to 
reduce public spending drastically, while the number of those unemployed and at risk of 
poverty  rose  sharply.  Social  protection  systems  have  been  put  under  pressure,  and  a 
number  of  Member  States  have  been  forced  to  reduce  spending  while  faced  with 
increased caseloads. 
This document reviews the implementation of the recommendation at national level.7 

Part 1 (chapters 1 and 2) of the document provides a synthesis of the analysis from Part 
2, and gives concrete policy guidance based on the results of the analysis. 

Part 2 (chapters 3 to 6) reviews policy developments at national level since the adoption 
of the 2008 Recommendation, focusing on the three pillars of the strategy. It looks at the 
challenges specific to each pillar as well as the issues related to the integrated delivery of 
the strategy. It also discusses the role of the social open method of coordination as well 
as  the  Europe  2020  Strategy  in  shaping  European  level  social  inclusion  policies,  and 
looks at relevant European level initiatives and strategies. 

1.2.  A brief synthesis 

The  summary  table  on  the  main  policy  characteristics  (derived  from  Tables  1-4  of  the 
Annex)  suggests  that  the  countries  with  the  best  outcomes  are  those  with  policy 
characteristics comparable to the active inclusion principles. 

6   COM/2010/0758 final. 

7   The  review  is based  on  several  sources.  First, the  Commission  asked  Member  States  (via  the  Social 
Protection Committee (SPC) to complete a survey on active inclusion. The SPC also held two thematic 
surveillances on active inclusion in which selected Member States presented their strategies. A number 
of PROGRESS-financed activities have contributed materials to this report: reports written by the EU 
Network  of  Independent  Experts  on  Social  Inclusion,  by  MISSOC,  and  by  EUROMOD.  National 
Social Reports (2012) and National Reform Programmes (2011, 2012) were also used. The Indicators 
Sub-group  (ISG)  of  the  Social  Protection  Committee  also  worked  on  developing  indicators  for  the 
strategy. Peer review seminars (under the auspices of the SPC) contributed to a better understanding of 
specific aspects of active inclusion. Civil society organisations participated in an informal consultation 
in  which  they  expressed  their  views  on  implementation  of  the  strategy.  Finally,  academic  papers, 
documents  prepared  in-house  by  the  Commission  and  reports  from  other  organisations  such  as  the 
OECD and the World Bank were used in the report. . 

5 

 
 
                                                 
These  countries  (mainly  from  groups  A  and  B)  are  characterised  by  high  coverage  and 
medium  to  high  levels  of  generosity  regarding  income  support  (first  pillar).  They  have 
low  labour  market  segmentation,  high  activation  (second  pillar),  high  use  of  childcare, 
and high participation in education and training of those with a low standard of education 
(third  pillar).  However,  their  safety  net  benefit  systems  are  more  likely  to  create 
disincentives to work. 

Ranked lower down are groups D and E with social protection systems not in line with 
active  inclusion  principles.  Such  systems  are  characterised  by  low  coverage  and  low-
generosity  income  support8  for  working  age  people  (first  pillar),  high  labour  market 
segmentation,  mainly  low  activation  (second  pillar),  low  use  of  childcare,  and  low 
participation in education and training for those with a low standard of education (third 
pillar). However, their safety net benefit systems tend not to create disincentives to work.   

Not  surprisingly,  there  is  a  high  correlation  between  the  situation  of  people  facing 
poverty  in  a  given  Member  State,  and  the  robustness  of  that  country’s  social 
protection system.     

8   Notice that these same systems are also often characterised by  generous pension systems  

6 

 
 
                                                 
Table 1. Summary of the main policy characteristics9 

First pillar 

Second pillar 

Third pillar 

Inclusive labour 
markets 

Access to services 

Other benefits  
second level of safety 
nets 
High coverage 
Medium to high 
generosity 
High disincentives 
(especially for second 
earners) 
High coverage 
High generosity 
High disincentives 
(especially for second 
earners) UK 

Unemployment 
benefits  
first level of safety nets 

High coverage (SI) 
Medium to high 
generosity 
Long duration (CY) 
High disincentives 

Very high coverage 
(UK) 
High generosity 
High disincentives (UK) 
Long duration (UK) 

Very high generosity 
High disincentives 

Low segmentation (FR) 
High activation (SI, CZ) 
No low wage trap 

High activation (UK) 
Low wage trap  

Very high generosity 
High disincentives 

High activation 

Medium coverage (BG, 
PL) 
Low generosity 
Low disincentives  

Low coverage (MT, HU) 
Low generosity 
Low disincentives 

Low coverage 
Low generosity 
Low disincentives (LT 
LV) 

Low coverage 
Low generosity (except 
LT for lone parents) 
Low disincentives 
(except for 2nd earners 
in LT, LV) 

High segmentation 
Low activation 
Low wage trap 
especially for 2nd 
earner(BG, RO) 

High segmentation 
Low activation (ES, PT) 
No low wage trap 

Group 
A 
CZ FR 
NL AT 
SI SE 
(CY) 
Group 
B 
BE DK 
DE FI 
UK 

Group 
C 
Ireland 

Group 
D 
BG HU 
IT MT 
PL RO 

Group 
E 
EE EL 
ES LV 
LT PT 
SK 

High childcare use 
(NL, AT, CZ) 
High participation in 
educ/training (FR, 
CY) 

High childcare (UK) 
Medium 
participation in 
educ/training (BE, 
UK) 
Low child care use 
Low participation in 
education and 
training 

Low childcare use 
Low participation in 
education and 
training (PL) 

Medium childcare 
use (SK) 
Medium/Low 
participation in 
educ/training (PT EL 
ES) 

See detailed tables in Annex (Outlier countries are signalled in strikeout font CC indicating that 
the given characteristic does not apply to that country) 

The  various  assessment  and  evaluation  exercises  have  identified  the  major  challenges 
active inclusion policies face with respect to the three pillars. 

First pillar: regarding adequate income support, the main challenges identified in the 
assessment are adequacy and coverage (both strongly affected by the recession), non-
take-up,  and  disincentives  to  work.  Though  most  Member  States  extended  social 
benefits at the start of the crisis, the dropping of temporary stimulus measures and budget 
constraints since then have had a negative impact on adequacy and coverage (restricting 
eligibility) for some. 

9   Based on data from: Eurostat EU-SILC, Eurostat LFS, OECD Tax and Benefit model, Eurostat LMP 
database, and OECD. No data available on coverage for CY, SE, FI, IE, and LT. No data available on 
adequacy of social assistance and housing support for CY and IT. No data available on unemployment 
and inactivity trap for CY. No data available on transition from temporary to permanent employment 
for  DK  and  IE.  No  data  available  on  poverty  transitions  for  SE,  DE,  PL,  PT,  SK,  and  RO.  No  data 
available on low wage trap for CZ and FR. No data available on the use of formal childcare for CZ. No 
data available on housing overburden cost for DE. 

7 

 
 
 
 
 
 
                                                 
Non-take-up is a matter of concern and needs to be carefully monitored. Member States 
have  recognised  the  issue  and  most  have  introduced  measures  to  increase  take-up, 
including  simpler  application  procedures  and  better  information  for  potential 
claimants about entitlement and application procedures. ‘One-stop shops’ introduced in 
some Member States have also helped to boost take-up, by informing people applying for 
one benefit that they may be entitled to others. 

Second  pillar:  inclusive  labour  markets.  The  main  concerns  identified  in  the 
assessment are in-work poverty and disincentives that may arise from tax and benefits 
systems. This continues to be a problem in a number of Member States. Ensuring that tax 
and  benefits  systems  contribute  to  make  work  pay  is  essential  to  avoid  poverty  traps. 
Member States should make sure that proper incentives are in place, so that people can 
move smoothly from benefit support to employment. 

Helping the most disadvantaged get back into work is crucial, given an ageing population 
and  the  on-going  economic  crisis.  Stakeholders  must  protect,  up-skill  and  activate 
dormant  human  capital.  That  is  why  it  is  important  to  understand  how  effective  labour 
market  activation  programmes  can  boost  their  earnings  potential,10  clear  evidence  for 
investment that leads to smart and inclusive growth. 

Third  pillar:  access  to  quality  services.  This  has  been  a  problem  for  a  number  of 
Member States. Children are disproportionately affected by poverty. Access to services is 
often  difficult  for  specific  disadvantaged  groups,  such  as  the  Roma,  some  groups  of 
migrants, and people with disabilities. 

High-quality services should be made available to all citizens to achieve the considerable 
redistributive  and  poverty-reducing  potential  of 
these  services.  Member  States 
undertaking  reforms  to  improve  these  services  should  bear  in  mind  their  poverty 
alleviating effects. 

Member States have reported little progress in providing an integrated comprehensive 
strategy for active inclusion. Almost all are planning partial implementation, but have 
difficulties or challenges with integrated provision of active inclusion. These difficulties 
are  often  due  to  lack  of  administrative  capacity,  or  to  the  vertical  and  horizontal 
coordination of the three pillars. 
There are, however, some promising examples (e.g. IE, SI)11 that can serve as models for 
others.  At  local  level,  the  EU  Network  experts  note  that  the  introduction  of  ‘one-stop-
shops’  in  some  Member  States  has  been  a  successful  way  of  ensuring  effective 
coordination in delivering assistance under different schemes. 

Civil  society  organisations  have  reported  limited  involvement  in  the  design  and 
implementation of active inclusion strategies at national level. 

More needs to be done to fully implement active inclusion reforms, especially: 

• 

reorganising frontline services to provide one-stop-shops for vulnerable people; 

•  modernising  social  protection  systems 

towards  greater  effectiveness  and 

efficiency; 

10   In a study looking at 59 labour activation programmes from the US, on average the offices increased 
the  programme  group’s  earnings  by  18 %  compared  to  the  control  group.  Source:  World  Bank 
presentation:  Applying  best  practices  from  the  OECD:  Implementation  challenges  for  employment 
activation programs in MICs, Istanbul, April 2012. 

11   Based on the SPC multilateral thematic surveillance on active inclusion (27 February 2012). 

8 

 
                                                 
• 

linking employment policies with social support. 

As a result of the assessment concrete steps are proposed below for both Member States 
and EU institutions. 

2.  GUIDANCE ON ACTIVE INCLUSION 

This guidance identifies steps for sound social investment to implement active inclusion 
strategies.  The  Commission  recommends  improving  the  efficiency  and  effectiveness  of 
Member  States’  income  support  programmes,  especially  with  regard  to  adequacy, 
coverage,  take-up  and  incentives  to  work,  so  that  they  can  reach  those  most 
disadvantaged and deliver at full capacity. 

The guidance promotes a holistic approach to active labour market policies, explaining: 
- the optimal sequencing of activation 
- the merits of personalised approaches for the most excluded 
-  how  Member  States  can  provide  optimal  tax  and  benefit  support  to  encourage 
employment and reduce in-work poverty. 

It also provides guidance on how to ensure access to enabling services, recommending a 
‘one-stop shop’ approach, including better administrative coordination and capacity. 

This guidance is also a tool for the Commission to assess Member States’ performance in 
the European Semester and points to the way in which Structural funds can contribute to 
achieving poverty reduction and social inclusion targets. 

The guidance can also be the basis for funding priorities on social innovation and social 
policy  experimentation.  It  is  backed  by  best  practices  and  evidence  presented  in  this 
document. 

2.1.  Adequate income support 

2.1.1.  What money can buy 

Adequate  livelihoods  (income  support)  are  an  essential  part  of  the  active  inclusion 
strategy.12 The debate on the adequacy of minimum income measured in relation to the 
median  income  (whether  it  is  60 %,  50 %,  or  40 %)13  is  not  conclusive.  In  a  recent 
paper,14 researchers from the University of Antwerp argue that only a minimum income 
level no higher than 40 % would eliminate inactivity traps.15 One way to refocus attention 

12   See the chapter (4.1) on the first pillar of active inclusion in this document. 

13   The  European  Parliament  in  its  Resolution  the  Role  of  minimum  income  in  combating  poverty  and 
promoting  an  inclusive  society  in  Europe  (reference  —  SP(2011)609)  of  6  October  2010  states  that 
‘adequate  minimum  income  schemes  must  set  minimum  incomes  at  the  level  equivalent  to  at  least 
60 %  of  median  income  in  the  Member  State  concerned.’  On  the  other  hand,  the  European 
Commission, in its 2008 recommendation on active inclusion does not provide a precise definition of 
adequate income support. 

14   Frank  Vandenbroucke,  Bea  Cantillon,  Natascha  Van  Mechelen,  Tim  Goedeme,  Anne  Van  Lancker 
(2012).  The  EU  and  Minimum  Income  Protection:  Clarifying  the  Policy  Conundrum,  CSB  Working 
Paper, No 12/5. . 

15  ‘The  Europe-wide  introduction  of  social  assistance  minimums  equal  to  60 %  of  national  median 
equivalent income would create a financial inactivity trap in no fewer than eleven Member States: in 

9 

 
 
 
 
                                                 
 
on the importance of adequacy is by looking at reference budgets,16 which give a good 
indication of differences in consumption patterns and the cost of living across Member 
States.  Reference  budgets  would  be  especially  useful  in  those  with  low  adequacy  of 
minimum income (measured in relation to the median income). 

•  Developing  reference  budgets  would  enhance  understanding  of  what  expenses 
could  be  covered  through  minimum  income  support.  The  development  and 
application  of  reference  budgets  should  have  two  phases:  1.  Design  of  reference 
budgets  (timeline:  max.  one  year);  17  2.  Monitoring  and  updating  of  reference 
budgets (continuous). 

2.1.2.  Gradual phasing out of income support 

Moving  from  social  assistance  (or  other  forms  of  income  support)  to  paid  employment 
creates a degree of disincentive. The exact degree depends on the difference between the 
value  of  the  social  assistance  and  the  value  of  earned  income.  The  closer  the  two,  the 
bigger the disincentive to return to work. The way social assistance is phased out is also 
relevant. Immediate withdrawal creates more disincentives, while gradual withdrawal is 
less likely to deter someone from taking a job. 

• 

Structuring  phase-outs18  in  a  way  that  strengthens  incentives  to  take  a  job19 
can help to end benefit dependency. Phasing out should take into consideration the 
cost of doing so.20 

Bulgaria,  Estonia,  Slovenia  and  Lithuania,  the  net  income  of  a  single  benefit  recipient  would  be 
between  25 %  and  30 %  higher  than  the  equivalent  income  of  a  single  person  working  at  minimum 
wage; in Spain and the Czech Republic, the relative advantage of the benefit claimant would amount to 
between  14 %  and  16 %.  Less  severe  dependency  traps  would  appear  in  Hungary,  Luxembourg, 
Portugal  and  the  United  Kingdom.  If  the  minimum  benefits  were  to  be  raised  to  50 %  of  median 
equivalent  income,  then  the  hypothetical  unemployment  traps  would  obviously  be  smaller,  but  they 
would still be substantial in the case of Lithuania, Slovenia, Estonia and Bulgaria (between 5 and 9 %). 
Only if benefits were augmented to 40 % of the median would it pay in all countries to switch from 
social benefits to the minimum wage.’ Pg. 26, Vandenbroucke et al. (2012). 

16   Reference budgets (or budget standards) contain a list of goods and services that a family of a specific 
size  and  composition  needs  to  be  able  to  live  at  a  designated  level  of  wellbeing,  along  with  the 
estimated  monthly  or  annual  costs  thereof.  Source:  European  Consumer  Debt  Network  (2009). 
Handbook of reference budgets, pp. 5. 

17   In  the  framework of  the  FP7-SSH  Research  Project  ImPRovE  (Poverty  Reduction  in Europe:  Social 
Policy and Innovation — http://improve-research.eu/) a common methodology for the construction of 
cross-nationally  comparative  reference  budgets  will  be  developed  and  applied  to  five  EU  member 
states. (for details see: http://improve-research.eu/?page_id=174). 

18   A recent example of gradual phasing out is the French Revenu de Solidarité Active. 

19   In Germany income support is not reduced at all for the first couple of hours of work, while phase-outs 
are quite steep for those working in jobs that could lift them out of poverty. The result is that there are 
many so-called ‘mini-job’ holders who remain dependent on benefits. 

20   Gradual phasing out may have budgetary implications. If the lower end of the income distribution is 
quite large (meaning that lot of people would participate in minimum income type programmes) then 
longer  (or  gradual)  phasing  out  would  result  in  higher  overall  spending.  See:  Marx  et  al.  (2011). 

10 

 
 
                                                                                                                                                 
 
2.1.3.  Improving  efficiency  and  effectiveness:  reaching  out  to  the  most 

disadvantaged 

Low  coverage  and  non-take  up  directly  affect  the  effectiveness  and  efficiency  of  the 
social assistance schemes. It is not enough just to have programmes. It is also important 
to  reach  those  most  disadvantaged,  and  ensure  that  policies  are  delivering  at  full 
capacity. Boosting the coverage and take-up of minimum income schemes will certainly 
contribute to reducing poverty. 21 

• 

Simpler  procedures  and  better  information  for  potential  beneficiaries  would 

boost take-up rates. 

•  Minimum income schemes should be assessed in relation to their contribution to 

achieving the national poverty targets.22 

• 

Besides  horizontal  comparisons  (poverty  target,  minimum  income  coverage,  and 
take-up  rate),  cross-country  comparison  of  coverage  and  take-up  rates  should  be 
carried out in the context of European Semesters. 

•  Use  social  policy  experimentation  to  examine  ways  to  better  reach  out  to  the 

people furthest from the labour market 

‘Combating in-work poverty in Continental Europe: an investigation using the Belgian case’, Journal 
of Social Policy, 41/1, pp. 19-41. 

21   As shown in the graph below, rather than just going ahead and creating new programmes, the coverage 
and/or  take-up  of  existing  programmes  should  be  assessed  first.  So  if,  for  example,  the  national 
poverty  target  is  to  reduce  in-work poverty,  then  it  is  worth  checking  whether  the  working  poor  are 
eligible for social assistance. If not, eligibility could be extended. If yes, then the take-up rate should 
be  checked.  If  it  is  low,  then  new  measures  targeting  a  group  could  be  introduced  to  help  reach  the 
target. These might involve simplifying procedures, campaigns or automatic take-up. 

22   If it is successful, the linking of poverty target could be extended to the other pillars of active inclusion 

(specifically to the various services). 

11 

 
                                                                                                                                                 
2.2. 

Inclusive labour markets 

Activation is only successful if there is a concerted effort on both sides: 

• 

demand  side:  incentives  to  businesses,  in  line  with  the  EU  State  aid  rules 
(including support for investment in human capital, wage subsidies, tax allowances, 
etc.), can play an important role, 

• 

supply  side:  Active  labour  market  policies  (ALMPs),  support  for  life-long 

learning, tax credits, in-work support etc. are needed. 

ALMPs  cannot  compensate  for  structural  barriers  to  job  creation,  such  as  excessively 
strict employment protection legislation, and they cannot be expected to compensate for 
cyclical labour market downturns. 

2.2.1.  Proper sequencing and targeting of activation 

Growing evidence on successful labour market programmes shows: 

• 

short-run  impacts:  it  appears  that  job  search  assistance  programmes  have 

relatively favourable short-run impacts, 

•  medium-term  impacts:  formal  education  and  on-the-job  training  programmes 

tend to show better outcomes in the medium-run.23 

It  is  therefore  extremely  important  to  choose  the  right  activation  measures,  taking  into 
consideration the specific circumstances. 

The longer someone has been unemployed, the likelier they are to find it hard to get 
back  into  work.  The  duration  of  unemployment  is  thus  an  important  indicator,  so 
programmes can be tailored to that criterion. Young people who have dropped out of 
school could be another example of a group requiring a specific programme. 

• 

Effective  ALMPs  should  be  sequenced  based  on  the  duration  of  unemployment 
and  the  intensity  of  activation  and  employment  support:  from  active  job  search, 
through counselling to targeted programmes.24 

23   David  Card,  Jochen  Kluve,  and  Andrea  Weber  (2009).  Active  labour  market  policy  evaluations:  a 

meta-analysis, IZA Discussion Paper, 4002. 

24   Based  on  the  presentation  of  T.  Andersen:  Active  labour  market  policy:  Theory  and  Danish 
experiences,  IZA/World  Bank/OECD  Conference  on  activation  and  employment  support  policies, 
April 2012, Istanbul, Turkey. For example: someone who has just lost their job may still have many 
links  with  the  labour  market  through  contacts  with  ex-colleagues,  friends,  etc.  Their  skills  are  also 
likely  to  be  ‘up-to-date’,  and  marketable.  So  the  immediate  strategy  should  be  an  active  job  search. 
Only  if  this  fails  should  job  counselling  be  activated.  Counselling  should  provide  broader, 
individualised support suited to the individual’s skills and field of work. If this fails, then it is time for 
targeted  re-training  to  acquire  marketable  skills.  This  may  be  through  job  training,  but  may  involve 
formal education or vocational training. 

12 

 
                                                 
•  Activation  and  employment  support  programmes  should  be  matched  to 
specific  client  criteria.  For  instance,  extensive  educational  programmes  could  be 
made available only to young people who are unemployed and do not have formal 
education.  Investing  in  the  development  of  more  sophisticated  targeting  (such  as 
profiling) could shorten the time a person needs to find a job, while cutting the cost 
of activation.25 

• 

Proper  sequencing  of  activation  should  be  incorporated  in  the  individual 

contract26 between the recipient and the service provider. 

2.2.2.  Providing optimal tax and benefit support to encourage employment 

and reduce in-work poverty 

Back-to-work benefits (such as gradual phasing out of income support, tax allowances 
and  in-work  benefits)  and  earnings  disregards  (income  that  is  disregarded  when  it 
comes to assessing tax liability) complement ALMPs in making it more attractive to take 
a job. Taxing labour income is a prominent element of every Member State’s tax policy. 
So it is important to understand the underlying relationship between taxation and labour 

25   A  more  sophisticated  way  of  targeting  programmes  is  through  so-called  profiling  when  statistical 
programmes  are  used  to  select  which  programme  (if  any)  is  expected  to  have  the  largest  effect  in 
reducing  the  length  of  periods  of  unemployment  for  a  particular  individual  with  given  personal 
characteristics.  The  advantage  of  using  statistical  tools  is  that  experience  accumulated  from  all 
previous periods of unemployment can be used. See: Frölich, M., 2006, ‘Statistical treatment choice: 
an application to active labour market programmes’, IZA Discussion Paper, 2187. 

26   A  contract  setting  out  the  rights  and  obligations  between  service  providers  and  the  participant 
empowers  the  individual  and  contributes  to  human  capital  development.  Together  with  a  benefit 
resembling  a  salary  (i.e.  taxable,  dependent  upon  participation,  extra  work  income  from  weekend 
work/evening work does not reduce the payments), it also improves motivation. The approach also sets 
out clear quality requirements and what the outcome should be. As such, the conditionality imposed 
goes both ways, increasing legitimacy and solidarity. It also facilitates monitoring of the quality and 
outcomes of the services rendered. . 

13 

 
 
                                                 
supply. Evidence suggests that secondary earners are much more responsive to wages 
(and thus taxes) than primary earners. If the tax burden is too high, secondary earners 
might  decide  they  are  better  off  not  working,  or  (more  rarely),  working  fewer 
hours.27 Disincentives can also stem from joint taxation. 

Policy responses can only be effective if they take account of the fact that low-paid work 
and  in-work  poverty  do  not  necessarily  overlap.28  Low-paid  work  is  only  one  of  the 
factors contributing to in-work poverty.29 Thus, if the goal is to reduce in-work poverty, 
there  is  limited  scope  in  using  tax  and  benefit  support  on  low-wage  earners.  Instead, 
targeting should focus on particular household types, chiefly single-earner households, or 
households with dependent children. 

In-work  poverty  is  strongly  associated  with  single-earners,  or  with  secondary  earners 
who  are  women  that  may  want  to  work  part  time.  So  supporting  the  latter  through 
childcare provisions for working parents would yield good results. 

• 

Tax  and  benefit  incentives  should  be  primarily  targeted  towards  low-income 

single-earner households, to encourage them to take full-time jobs. 

•  Offering  tax  and  benefit  allowances  to  families  with  children  or  dependents 

would raise the likelihood of parents taking jobs, reducing child poverty.    

2.3.  Access to enabling services 

The  term  ‘enabling  services’  refers  to  various  services  essential  to  active,  social,  and 
economic  inclusion  policies.  Social  assistance  services,  employment  and  training 
services,  housing  support  and  social  housing,  childcare,  long-term  care  services  and 
health services30 are all examples of such provision. 

There  is  evidence  that  publicly31  provided  services  in  education,  health  care,  social 
housing, childcare, and elderly care, can do much to reduce poverty. They can also help 
to reduce inequality, thus reducing poverty across various groups. 

The impact of publicly provided services can be relevant for: 

27   In the US, for every 10 % reduction in after-tax wages, primary earners work about 1 % fewer hours, 
for an elasticity of labour supply with respect to after-tax wages of 0.1. Secondary earners are much 
more responsive to wages (and thus taxes), with elasticities of labour supply with respect to after-tax 
wages estimated to range from 0.5 to 1. Source: Gruber (2011) Public finance and public policy, Third 
edition, Worth Publishers, pp. 628. 

28   Evidence  suggests  that  the  overlap  is  rather  low  —  between  5  to  10  per  cent  in  most  industrialised 
economies  Nolan,  B.  and  Marx,  I.  1999.  ‘Low  pay  and  household  poverty’,  Luxembourg  Income 
Study, Working Paper, No 216. . 

29   See  chapter  on  in-work  poverty  of  European  Commission  (2011):  Employment  and  Social 

Developments in Europe 2011. 

30   See Commission Recommendation of 3.10.2008 on the active inclusion of people excluded from the 

labour market (2008/867/EC published in the OJ L. 307/11 of 18.11.2008). . 

31   The  evidence  available  is  on  publicly  provided  services  (OECD-European  Commission  (2011):  The 
impact  of  publicly  provided  services  on  the  distribution  of  resources).  This  does  not  exclude  the 
possibility that privately provided services can also have an important role in reducing poverty. 

14 

 
                                                 
(1) children and the elderly because of their higher use of education and health services 
respectively; 

(2) single parents and couples with children, because of their higher use of education 
and childcare; 

(3) the unemployed, as they will benefit from employment and training services and 

(4) households with high work intensity. 

When  it  comes  to  service  delivery,  there  is  evidence  that  universal  service  provision 
faces  fewer  problems  related  to  stigmatism  compared  to  traditional,  targeted  social 
assistance benefits.32 

2.3.1.  Investment in relevant services 

• 

• 

The specific poverty-alleviating effects of various services should always be borne 
in mind when planning reforms of service-providing systems. Investing in enabling 
services,  including  through  Structural  funds,  and  ensuring  their  accessibility  and 
affordability and at the same time ensuring efficacy, can improve quality of life for 
different categories of disadvantaged people. 

2.3.2.  Personalised approach: high quality case handlers 

Structural funds, including the European Social Fund,33 could be used to support 
quality training of case handlers to boost outreach to the most disadvantaged, for 
whom  services  can  play  a  crucial  support  role.  The  type  of  support  needed  often 
depends  on  individual  circumstances.  High-quality  case  workers34  can  contribute 
significantly to job seekers successfully finding jobs. The Digital Agenda for Europe 
acknowledges  the  key  role  played  by  intermediaries  and  social  actors  and  sets  out 
different  mechanisms  to  help  them  acquire  digital  knowledge  and  competences 
through the use of ICT. 35 

2.4.  Cross-cutting policy areas 

Integrating  the  most  relevant  services  with  activation  and  income  support  would  help 
hard-to-reach  clients  get  access  to  the  services  they  need.  It  would  also  reduce 

32   Marx, I. (2010). Minimum income protection in post-industrial economies: on getting the balance right 
between incrementalism and innovation, in Social protection for a post-industrial world, ed. Kemp, P. 
A., International Studies on Social Security, vol. 15. 

33   See European Commission Staff Working Document - Social Investment through the European Social 

Fund,SWD(2013) 44. 

34   In  the  field  of  education,  there  is  growing  evidence  that  the  quality  of  the  teachers  is  an  important 
factor  in  school  performance.  See  at  http://mckinseyonsociety.com/how-the-worlds-most-improved-
school-systems-keep-getting-better/. . 

35   See Gdansk Road Map for Digital inclusion: a Hub for Social Innovation, at:  

http://ec.europa.eu/information_society/activities/einclusion/docs/gdansk_roadmap.pdf. 

15 

 
 
                                                 
 
administrative costs. Integration would be a step towards more effective, efficient social 
services, a prime example for social investment. 

• 

Setting up ‘one-stop shops’ would simplify the organisation, delivery and take-up 

of services. This approach requires: 

–  integration of information systems to reduce duplication, provide the basis for a 

holistic, personalised approach to service delivery and help fight fraud; 

–  integration of employment services with social assistance services and enabling 

services; 

–  reducing  the  complexity  of  accessing  services  by  simplifying  eligibility 

requirements; 

–  improving coordination among different levels of government (central, regional 
or  local)  to  improve  overall  service  delivery.  Cohesion  funds  could  be  used  to 
improve administrative capacities at various levels of government; 

–  coordinating  tax  and  benefits  systems  and  looking  at  the  impact  of  various 

programmes at the level of the individual. 

• 

Participation  of  relevant  stakeholders  should  be  built  into  the  design  and 
the  2008 

inclusion  strategies 

line  with 

in 

evaluation  of  national  active 
recommendation on active inclusion. 

3.  POVERTY  AND  SOCIAL  EXCLUSION  AMONG  PEOPLE  OF  WORKING  AGE:  MAIN 

DEVELOPMENTS AND COUNTRY CHARACTERISTICS 

3.1.  Main trends since the Recommendation’s adoption 

Recent  data  on  poverty  and  social  inclusion  suggest  there  were  120  million  people  at 
risk of poverty or social  exclusion in the European Union in 2011, about 24 % of the 
population. The at-risk-of-poverty rate was especially high for children, lone parents and 
older workers. Nearly two-thirds (77 million) of this group were of working age. 
Between  2008  and  2011,  those  of  working  age36  were  most  directly  affected  by  the 
crisis and its impact on the job market and opportunities. Their risk of poverty and social 
exclusion rose in nearly two-thirds of EU countries and by 5 percentage points or more in 
the  Baltic  States,  Spain,  Ireland  and  Bulgaria.  The  apparent  decrease  or  stability  of  the 
rate in countries that were seriously affected by the crisis (Portugal, Greece) is partly due 
to the counter-intuitive37 stagnation or decrease in the relative poverty rate (see section 
below). 

36   Working age is defined as individuals between 18 and 64. . 

37  

If the median income decreases, that also lowers the poverty threshold, which is measured as 60 % of 
the median household income. 

16 

 
                                                 
Chart  1:  Share  of  working  age  (18-64)  population  at  risk  of  poverty  and  social 
exclusion38 (%); 2008-2011 

Source:  Eurostat;  EU-SILC  (2011  income  year  2010);  except  for  IE  (SILC  2010  income  year 
2010). 
Poverty is primarily about living on a low income. The risk of poverty39 among those of 
working age remained stable on average at EU level, but rose in nearly two-thirds of EU 
countries.  The  rise  exceeded  2  percentage  points  in  Estonia,  Ireland,  Italy,  Lithuania, 
Slovakia,  and  Spain.  However,  the  data  may  underestimate  the  actual  deterioration  in 
living  standards  among  the  poorest  in  these  countries,  as  well  as  in  the  countries  that 
show smaller changes in the incidence of relative poverty, as explained below. 

38   The indicator sums up the number of persons who are at risk of poverty, severely materially deprived 
or  living  in  households  with  very  low  work  intensity.  Persons  present  in  several  sub-indicators  are 
counted only once. Persons at risk of poverty have an equivalised disposable income below 60 % of 
the national median equivalised disposable income after social transfers. Material deprivation covers 
indicators relating to economic strain and durables. Persons are considered to be living in households 
with  very  low  work  intensity  if  they  are  aged  0-59  and  the  working  age  members  of  the  household 
worked less than 20 % of their potential during the past year. 

39   The  at-risk-of  poverty  rate  measures  the  share  of  people  living  with  less  than  60 %  of  the  median 
income in their country. This is the threshold under which resources are considered too low to be able 
to fully participate in the society. 

17 

 
 
                                                 
Chart  2a:  Share  of  working  age  (18-64)  population  at  risk  of  poverty  (%);  2008-
2011 

Source:  Eurostat;  EU-SILC  (2011  income  year  2010);  except  for  IE  (SILC  2010  income  year 
2010) 

Changes  in  relative  poverty  have  to  be  interpreted  together  with  trends  in  the  poverty 
threshold. During the crisis, the general fall in incomes led to a significant drop, by 5 % 
or more, in the level of the poverty line (that is, the actual income of a person living on 
the poverty line) in Latvia, Ireland, Spain, Lithuania, Slovenia, Portugal and the UK. This 
indicates a sharp fall in the living standards of the poorest in these countries, including 
those in which the incidence of relative poverty remained stable. 

Chart  2b:  Evolution  of  the  at-risk  of  poverty  threshold  (%  change  between  2008 
and 2011) 

Source:  Eurostat;  EU-SILC  (2011  income  year  2010);  except  for  IE  (SILC  2010);  at  risk  of 
poverty threshold in national currency (in Euro for CY and SK), deflated. 

18 

 
 
 
 
 
 
8.8 % of the EU-27 working age population suffered from severe material deprivation40 
in 2011. As it is based on a single European threshold, this indicator reflects better the 
stark  differences  in  living  standards  across  the  EU.  In  2011,  the  severe  material 
deprivation  rate  exceeded  30 %  in  Bulgaria  and  Latvia  and  exceeded  20 %  in  Hungary 
and  Romania.  The  chart  below  shows  the  deterioration  of  the  situation  in  the  Member 
States  among  those  most  severely  hit  by  the  crisis.  The  deterioration  was  especially 
severe in Latvia, Lithuania, Hungary, and Greece (at least 5 percentage points). 

Chart  3  Developments  in  severe  material  deprivation  across  EU  Member  States 
among the working age population (18-64), 2008-2011 

Source:  Eurostat;  EU-SILC  (2011);  except  for  IE  (SILC  2010).  Unlike  income,  material 
deprivation refers to the survey year. 

Exclusion  from  the  labour  market  is  another  driver  of  poverty  in  the  EU,  especially  in 
households  where  no-one  holds  a  job.  The  crisis  pushed  many  households  out  of  the 
labour market, as shown in the chart below. Most Member States saw sharp rises in the 
rate  of  people  living  in  jobless/very  low  work  intensity  households.  The  trends  are 
particularly  worrying  in  Ireland,  Greece,  Spain,  and  Bulgaria  (over  4  percentage  point 
deterioration between 2008 and 2011). 

40   The severe material deprivation rate represents the proportion of people who cannot afford at least four 
of  the  nine  following  items:  1)  (arrears  on)  mortgage  or  rent  payments,  utility  bills,  hire  purchase 
instalments  or  other  loan  payments;  2)  one week’s  annual  holiday  away  from  home;  3)  a  meal  with 
meat, chicken, fish (or vegetarian equivalent) every second day; 4) unexpected financial expenses; 5) a 
telephone (including mobile phone); 6) a colour TV; 7) a washing machine; 8) a car and 9) heating to 
keep the home adequately warm. 

19 

 
 
                                                 
Chart  4  Developments  in  the  share  of  people  living  in  jobless  households41  across 
EU Member States, 18-59 (not students) 2008-2011 

Source: LFS 

Holding a job does not always protect a household from the risk of poverty. The working 
poor  account  for  a  third  of  adults  of  working  age  who  are  at  risk  of  poverty.  In  2011, 
almost 9 % of those with jobs were living under the poverty threshold. In-work poverty 
rose  significantly  in  a  third  of  EU  countries  (MT,  DK,  CY,  IE,  FR,  IT,  ES,  and  RO) 
between  2008  and  2011.  In-work  poverty  applies  to  situations  in  which  there  are  not 
enough adults working in a household, or where they are not working enough hours to 
earn  a  living.  It  is  also  linked  to  poor  labour  market  conditions  such  as  low  pay,  low 
skills,  precarious  employment  and  under-employment.  Single-parent  households  and 
single households in which the breadwinner is not working full time, as well as single-
income  families  face  the  highest  risks  of  poverty  (often  these  being  women  or  young 
people). 

41   Share of people living in a household where no one is working. 

20 

 
                                                 
Chart  5  Developments  in  the  level  of  in-work  poverty  across  EU  Member  States 
among the working age population (18-64), 2008-2011 

Source: Eurostat; EU-SILC (2011); except for IE (SILC 2010). 

Social transfers play an essential role in providing support to both those that are without 
jobs,  and  those  that  are  transitioning  into  the  labour  market  (and  may  face  low-paying 
jobs). Their impact in reducing the risk of poverty of those of working age varies greatly 
across EU countries, from less than 25 % of the risk of poverty before social transfers in 
BG, EL, and IT, to more than 50 % in BE, IE, DK, FI, SE, HU, NL, LU, and AT. These 
variations  reflect  differences  in  levels  of  poverty  before  social  transfers,  in  levels  of 
spending, and in the design of taxes and benefits systems. During the crisis, the impact of 
social  transfers  has  increased  in  nearly  half  of  EU  Member  States,  including  some  of 
those worst hit by the crisis. 

21 

 
 
 
 
Chart 6 Impact of social transfers (not pensions) in reducing the risk of poverty of 
the working age population, 2008-2011 

Source: Eurostat; EU-SILC (2011); except for IE (SILC 2010), DG EMPL calculation. Impact of 
social transfers is calculated as the relative change in the at-risk-of-poverty rate before and after 
social transfers. 

3.2.  Grouping countries according to their main challenges 

Poverty and social exclusion among those of working age are driven by multiple factors, 
including exclusion from the labour market, insufficient earnings from work for the 
employed and his/her family and inadequate income support for those who need it. 
Different  factors  prevail  in  different  countries.  A  cluster  analysis  based  on  five 
indicators42  of  the  main  drivers  can  group  countries  according  to  the  main  challenges 
they  face.  It  shows  that  countries  that  perform  well  on  all  drivers  have  good  outcomes 
and  relatively  less  poverty,  while  those  that  show  bad  performance  on  one  or  more 
drivers have the worst outcomes. 

Table 1. Clustering of MS based on the following drivers: jobless households, long-
term  unemployment  (LTU)  rate,  impact  of  social  transfers  on  poverty  reduction, 
activity rate, in-work poverty, and related poverty outcomes 

Drivers 

Outcome 

Countries 

42 The five indicators are jobless households, long-term unemployment rate, impact of social transfers on 
poverty reduction, activity rate, and in-work poverty. These indicators are also those used in the Joint 
Assessment Framework to assess the policy area ‘active inclusion’. 

22 

 
 
 
 
 
 
                                                 
Group A 

 Low share of jobless households 

Low level of long term unemployment 

Impact of social transfers is high 

Relatively high level of activity rate 

Low level of in-work poverty 

Relatively high share of jobless 

households 

Risk of Poverty 

Poverty gap 

Persistent poverty 

CZ FR  
NL AT SI 
SE 
(CY) 

Group B 

 Low level of long term unemployment 

Impact of social transfers is high 

Relatively high level of activity rate (BE) 

 Risk of Poverty 
 Poverty gap 
 Persistent poverty 

BE DK DE 
FI UK 

Low level of in-work poverty 

Very high share of jobless 

households 

Very high level of long term 

Group C 

unemployment 

Impact of social transfers is high 
Low level of activity rate 

Relatively low level of in work poverty 

 Relatively high share of jobless 

households 

Risk of Poverty 

Poverty gap 

IE 

Group 
D 

Low level of long term unemployment 
Impact of social transfers is very 

low 

Risk of Poverty 
Poverty gap 
Persistent poverty 

BG RO 
HU PL 
IT MT  

Very low level of activity rate 
 Relatively high level of in-work poverty 

 Relatively high share of jobless 

households 

Very high level of long term 

Group E 

unemployment 

Impact of social transfers is low 

Relatively high level of activity rate 
High level of in-work poverty 

Risk of 

Poverty 

Poverty gap 
Persistent poverty 

ES EL PT 
LV LT EE 
SK 

Source:  EU-SILC  2010,  and  EU  LFS  2011,  European  Commission  (DG  EMPL)  calculation.  Groups  are 
obtained by cluster analysis based on five variables for the working age population: share of the population 
living  in  zero  or  very  low  work  intensity  households,  long-term  unemployment  rate,  impact  of  social 
transfers  in  reducing  poverty,  activity  rate  and  in  work  poverty  rate.  Country  scores  are  calculated  with 
reference to the EU average. 

Notes: LU is treated as a ‘shadow country’ not influencing the clustering, since it presents outlier values. 
Countries in brackets are to be considered as on the edge of the cluster. 

Group A includes CZ, FR, NL, AT, SI, SE, and (CY) characterised by fewer people 
excluded  from  the  labour  market,  low  levels  of  in-work  poverty  and  above-average 
impact  of  social  transfers.  They  are  among  the  countries  with  the  least  poverty  among 
those of working age. 

23 

 
 
 
 
 
 
 
 
Group  B  includes  BE,  DK,  DE,  FI  and  the  UK.  These  countries  are  quite  similar  to 
group A, but have more people living in jobless households. They are among countries 
with the least poverty for those of working age, though rates are slightly higher than for 
group A. 

Group C singles out Ireland, characterised by a very high number of people living in 
jobless households and low activity rates, combined with social transfers that have a high 
impact on reducing poverty. Ireland combines a relatively high risk of poverty with a low 
poverty gap. 

Group D includes BG, IT, HU, MT, PL and RO which combine low activity rates, low 
impact of social transfers and a medium to high number of people in jobless households 
and in-work poverty. They are among countries with a medium to high risk of poverty 
for those of working age. 

Group E includes the Baltic States, ES, PT, EL and SK which combine high levels of 
long-term unemployment, average activity rates, social transfers with a low impact and a 
medium to high number of people in jobless households and in-work poverty. They are 
among countries with a high incidence and persistence of poverty for those of working 
age. 

This clustering is used throughout this document to assess the performance of Member 
States, based on indicators relevant for the three pillars of active inclusion. 

4.  REVIEW OF ACTIVE INCLUSION STRATEGIES AT NATIONAL LEVEL 

4.1.  Adequate income support43 

The 1992 Council Recommendation on sufficient resources 44 called on Member States to 
recognise  the  individual’s  right  to  sufficient  resources  and  to  provide  adequate  income 
support,  based  on  an  evaluation  of  the  resources  necessary  for  a  life  in  dignity.  Such 
support  should  be  combined  with  an  availability  to  work  and  the  system  should  avoid 
creating inactivity traps. 

Minimum income schemes are central among the range of measures in place across the 
EU,  given  that  they  are  non-contributory  safety  nets  of  last  resort.  This  review  shows 
persistent differences among Member States as regards the level of coverage. There are 
also challenges in reaching those experiencing the worst forms of poverty, for instance, 
the homeless. The evidence suggests that one of the issues is the number of people who 
do not take up schemes for which they are eligible. Minimum income schemes alone are 
in any case insufficient to lift beneficiaries out of poverty. They intervene as a last resort 
and generally interact with other benefits schemes.  

Adequate  income  support  aims  to  ensure  that  those  who  do  not  have  enough  of  their 
own resources to live in a manner compatible with human dignity may do so, whether or 
not  they  are  fit  for  work.  That  is  consistent  with  the  1992  Council  Recommendation 
which called on Member States to recognise such a basic right. 

43   This  section  is  based  on  the  partial  reproduction  of  the  Joint  report  on  social  protection  and  social 

inclusion 2010, pages 54-65 (European Commission, 2010). 

44   Council  Recommendation  of  24  June  1992  on  common  criteria  concerning  sufficient  resources  and 

social assistance in social protection systems (92/441/EEC). 

24 

 
 
                                                 
In assessing adequate income support, it is important to distinguish between two levels 
of safety net for the working age population. 
The  first  level  of  safety  net  is  mainly45  represented  by  the  unemployment  benefit 
system.  Most  people  who  lose  their  jobs  usually  receive  some  form  of  unemployment 
benefit  in  the  first  instance.  Well-designed  insurance-based  unemployment  benefit 
systems  with  broad  coverage  should  in  principle  limit  the  need  for  last-resort  schemes. 
Spending  on  unemployment  benefits  is  also  quite  significant  in  overall  spending  on 
social protection. 

The first level of safety nets is reviewed regarding the coverage, adequacy and labour 
market  friendliness  (presence/absence  of  financial  disincentives)  of  benefits  (see 
Annex, Table 1). 

Group  A  and  Group  B  (as  defined  in  section  2.2)  include  the  countries  that  do  well  in 
terms  of  coverage,  generosity,  and  duration  in  the  first  level  of  safety  nets  (with  the 
exception of UK and CY). High generosity, however, comes with higher disincentives to 
return to the labour market (higher than average unemployment traps46). 

At  the  other  end  of  the  spectrum,  countries  belonging  to  groups  D  and  E  (eastern  and 
southern  European  countries)  are  characterised  by  low  coverage,  low  generosity,  low 
duration,  and  benefit  systems  with  low  disincentives.  Without  a  strong  first-line  safety 
net system, the bulk of the burden falls on last-resort schemes, such as social assistance.     

The second level of safety nets complements the first one. It is based on various benefit 
systems,  mainly  minimum  income  schemes.  They  are  designed  for  those  who  are  not 
eligible  for  unemployment  benefit  or  other  forms  of  replacement  income,  though  they 
may  have  previously  been  so.  These  schemes  can  play  an  important  role  at  times  of 
prolonged  economic  downturn,  as  growing  numbers  of  the  unemployed  become 
ineligible to collect unemployment benefits. 

Both  levels  are  reviewed  in  relation  to  the  coverage,  adequacy,  and  labour  market 
friendliness  (financial  disincentives  to  work)  of  benefits  (see  Annex,  Table  1).  The 
patterns  are  similar  to  those  seen  for  the  first  level  of  safety  nets:  Scandinavian  and 
Benelux countries as well as AT, CZ, FR and DE have more comprehensive safety nets 
(high coverage, generosity), but also higher disincentives to return to work (higher than 
average  inactivity  traps47),  while,  in  general,  eastern  and  southern  European  countries 
have safety nets characterised by low coverage and generosity, but lower disincentives to 
work. 

Thus, countries in groups D and E do not have adequate safety nets, whether at first or 
second  level.  These  countries  face  significant  difficulties  in  addressing  the  social 
consequences of a serious economic downturn. 

45   Disability and sickness benefits are not included here. 

46   The  unemployment  trap  —  or  the  implicit  tax  on  returning  to  work  for  unemployed  persons  — 
measures  the part  of  the  additional  gross  wage  that  is  taxed  away  in  the  form  of  increased  taxes  and 
withdrawn  benefits  such  as  unemployment  benefits,  social  assistance  and  housing  benefits  when  a 
person returns to work from unemployment. 

47   The inactivity trap — or the implicit tax on returning to work for inactive persons — measures the part 
of additional gross wage that is taxed away in the case where an inactive person (not entitled to receive 
unemployment benefits but eligible for income-tested social assistance) takes up a job. In other words, 
this  indicator  measures  the  financial  incentives  to  move  from  inactivity  and  social  assistance  to 
employment. 

25 

 
                                                 
In  the  remainder  of  this  section,  the  focus  is  primarily  on  minimum  income  (MI) 
schemes for people of working age given that active inclusion aims at people furthest 
from the labour market (potentially the main group to benefit from such schemes of last 
resort).48  The  focus  on  working  age  is  due  to  the  strong  labour  market  reintegration 
component of the strategy. Minimum income schemes provide cash benefits to ensure a 
minimum  standard  of  living  for  individuals  (and  their  dependants)  that  have  either  no 
other means of financial support, or whose resources fall short of a given level, despite 
including  contributory  cash  benefits  and  support  from  other  family  members.  MI 
schemes are considered as ‘schemes of last resort.’ They provide a safety net to protect 
people  from  destitution  if  they  are  not  eligible  for  social  insurance  benefits,  or  are  no 
longer  entitled  to  such  benefits.  They  play  an  even  more  important  role  in  a  crisis, 
when the rise in unemployment has already had an impact on social assistance schemes.49 

Almost  all  EU  countries  have  some  form  of  MI  scheme  at  national  level.  Member 
States that do not have one, such as Italy, have some sort of scheme at regional or local 
level. These are generally conceived as a short-term form of assistance, though in most 
Member  States,  they  are  not  formally  time-limited.  They  are  means-tested  and  funded 
through the tax system (i.e. non-contributory). They are intended mainly for people out 
of  work,  but  some  Member  States  (CY,  DE,  LT,  FR,  PT,  RO,  SI,  SE  and  IE)  have 
extended their scope to provide in-work income support. 

4.1.1.  Institutional features of minimum income schemes in EU countries 

In  most  Member  States,  MI  schemes  are  designed  at  national  level,  while  delivery  is 
delegated  to  the  local  authorities.50  An  examination  of  various  national  definitions51 
shows that most Member States use a statutory minimum level of income, fixed by the 
(national,  regional,  local)  legislator  or  government.  Further  classifications  are  possible 
along territorial arrangements, type  of  benefits  (cash  vs.  in-kind), and existence of top-
ups (or income tapers). Minimum income benefits in general are adjusted periodically.52 
In none of the Member States is the minimum income level linked to national minimum 
wage.   

48   The  analysis  presented  in  this  section  relies  on  the  work  conducted  by  the  EU  Network  of  national 
independent  experts  on  social  inclusion,  and  particularly  on  the  Synthesis  Report  drawn  from  their 
work  (Frazer  H.  and  E.  Marlier  (2009)  ‘Minimum  income  schemes  across  EU  Member  States. 
Synthesis Report’). 

49   Social  assistance  (SA)  schemes  represent  the  broader  category  including  MI  benefits  together  with 

other types of benefits such as housing benefits, child benefits and unemployment assistance benefits. 

50   In a few Member States, like Austria and Hungary, responsibility for policy decisions on SA benefit 

levels and eligibility conditions is partly delegated to regional/local governments. 

51   MISSOC  Analysis  (2011).  Guaranteed  Minimum  Resources,  MISSOC  Secretariat  for  the  European 

Commission, Contract nr. VC/2010/1131. 

52   Most  Member  States  do  automatic  adjustments  following  changes  in  the  consumer  price  index  (in 
some countries an increase will only take place if the consumer index is raised by a certain percentage 
(CZ,  LU,  BE)).  Some  Member  States  will  only  adjust  at  irregular  intervals  after  a  decision  by  the 
government (LT, EE), while in other countries this will depend on the available budgetary resources 
(BG, LV). However, the periodicity of adjustment varies from every 6 months (SI, NL), to each year 
(almost all Member States), up to once every 3 years (PL), or at irregular intervals (LT, EE). Source: 
MISSOC Analysis 2011. 

26 

 
 
                                                 
The  design  of  MI  schemes  varies  widely  among  Member  States.  In  terms  of 
comprehensiveness  (i.e.  the  extent  to  which  MI  schemes  are  non-categorical,  thus 
applying  to  those  on  low  incomes  in  general,  rather  than  to  specific  subgroups),  four 
‘broad’ groups of countries can be distinguished.53 

-  Group 1 (AT, BE, CY, CZ, DE, DK, FI, NL, PT, RO, SI, SE) is characterised by 
relatively  simple  and  comprehensive  MI  schemes,  generally  open  to  those  without 
sufficient means to live in dignity. 

-  Group 2 is smaller (EE, HU, LT, LV, PL, SK). It has simple and non-categorical54 

MI schemes accompanied by more restricted eligibility conditions. 

-  Group 3 (ES, FR,55 IE, MT, UK) is characterised by a complex set of different and 
often categorical schemes that sometimes overlap but generally cover most of those 
with insufficient means. 

-  Finally,  there  is  a  small  group  of  countries  with  limited,  partial  or  piecemeal 

arrangements only covering narrow categories of people (BG, IT, EL). 

Eligibility conditions (commonly related to age, nationality, residence, lack of financial 
resources  and  availability  for  work)  vary  significantly.  In  some  Member  States,  where 
there are only piecemeal and categorical schemes, there are people on very low incomes 
that do not have access to any form of MI scheme. 
Over  the  past  years  many  Member  States  have  tightened  eligibility  conditions.56 
Conditionality has generally been increased and availability for work has usually been 
more tightly enforced for those are fit to work. There are often sanctions if beneficiaries 
fail to comply with the requirement that they must be available for work. Sanctions may 
lead to reductions in benefits, and to the loss of the right to SA benefits in more extreme 
cases. There is also a trend towards a stronger link between income support through MI 
schemes  and  activation  measures  including  vocational  training,  job  search  assistance, 
and counselling. 

MI schemes are of unlimited duration in all Member States. They are granted for as long 
as  a  person  is  in  need  of  support,  and  need  is  monitored  by  regular  checks  that 
beneficiaries do indeed fulfil eligibility conditions. National MI schemes differ as regards 
the duration for which benefits are available after each application, so the frequency with 
which  a  claimant  has  to  reapply  varies.  For  example,  in  FR  the  Revenu  de  solidarité 
active (RSA) has to be renewed after three months, in BG, SI and LV after six months, 
while in PT, the period is 12 months.57 

53   Frazer  H.  and  E.  Marlier  (2009)  ‘Minimum  income  schemes  across  EU  Member  States.  Synthesis 

Report’ . 

54   Access  to  categorical  benefits  is  restricted  based  on  some  personal  characteristics  (single,  with 
children,  etc.)  non-categorical  benefits  are  benefits  with  no  restriction  based  on  personal 
characteristics. . 

55   This has improved with the introduction of the Revenu de solidarité active in 2009. 

56   A follow-up survey, conducted in autumn 2011 and spring 2012, on the implementation of the active 
inclusion  strategies  at  national  level  (based  on  pre-filled  questionnaires  complemented  by  MS 
information)  found  that  more  countries  have  implemented  stricter  eligibility  criteria  for  minimum 
income  (CZ,  FR  HU,  PT,  RO,  UK)  compared  to  those  that  relaxed  eligibility  (MT,  LT)  in  the 
examined period (2008-2012). 

57   MISSOC database for 2011. 

27 

 
                                                 
Considering overall income support, it should be noted that in some Member States, MI 
claimants  also  receive  additional  assistance  for  specific  needs,  such  as  housing 
benefits, contributions to fuel costs and means-tested child benefits. Though not formally 
classified as ‘guaranteed MI benefits’ these do contribute to the level of income that is 
actually guaranteed to people supported by MI schemes. 

4.1.2.  The  non-take  up  of  benefits:  estimated  extent,  causes  and  policy-

relevant consequences 

Coverage  of  MI  schemes  is  defined  on  the  basis  of  eligibility  criteria.  The  take-up  of 
benefits  refers  to  the  share  of  those  entitled  to  benefits  that  actually  receive  them. 
Coverage and take-up rates do not necessarily match,58 and the available evidence59 
shows that the gap between the two is significant, sometimes very large. 

Hernanz  et  al.  (2004)  report  estimates  of  take-up  for  social  assistance  and  housing 
benefits ranging between 40 % and 80 %. A more recently completed EUROMOD project 
(AIM-AP)60 has provided additional evidence for some EU countries and different types 
of benefit. It reports ranges between 33 % and 88 %.61 

The UK is the only EU Member State which has published official estimates of take-up 
rates  for  various  benefits,  including  Income  Support,  since  1997,  but  its  last  estimates 
refer to 2007-08. Evidence from an evaluation of the French RSA scheme highlights that 
many beneficiaries do not receive the support and activation to which they are entitled, 
with a non-take up rate of 35 % for basic benefits (RSA socle) and up to 68 % for the in-
work RSA supplement (RSA activité).62 

Overall, take-up seems to have declined, at least for some of the EU countries for which 
data  are  available.  Some  groups  may  be  more  likely  not  to  take  up  benefits  than 
others.63 

58   In an ideal scenario where all people entitled to benefits actually receive them, coverage and take-up 
rates would be identical. In practice ‘frictions’ of different nature generate incomplete take-up, so that 
take-up rates end up being smaller than coverage rates. 

59   Evidence on take-up is currently very fragmented and limited in terms of country coverage. It is often 

out of date, and refers to different schemes for different countries. 

60   The  Accurate  Income  Measurement  for  the  Assessment  of  Public  Policies  was  a  project  (started  in 
2006 and finished in 2009) funded by the European Commission under the Sixth Research Framework 
Programme. AIM-AP aimed at improving the comparability, scope and applicability of tools, methods 
and  data  for  the  measurement  of  income  and  the  analysis  of  the  effects  of  policies  on  inequality, 
poverty and social inclusion. It involved 11 universities and research institutes in various EU countries 
(http://www.iser.essex.ac.uk/research/euromod/research-and-policy-analysis-using-euromod/aim-ap). . 

61   Source:  Matsaganis  M.,  A.  Paulus  and  H.  Sutherland  (2008)  ‘The  take  up  of  social  benefits’  SSO 

Research Note 6(2008). 

62   Commission  Staff  Working  Document,  Assessment  of  the  2012  national  reform  programme  and 
stability programme for France, SWD(2012) 313 final, Comité National d’Evaluation Rapport Final, 
December 2011. 

63   EU Network of Independent Experts (Frazer and Marlier, 2009) For instance, in Belgium non-take up 
is  estimated  to  be  greater  for  women,  couples,  individuals  with  educational  attainment  below  the 
second  stage  of  secondary  studies  and  the  16-24  age  cohort.  In  the  UK,  people  that  do  not  take  up 
Income Support tend to be slightly older than those that take it up (with a larger share of people aged 
50-59) and more likely to be owner-occupiers in terms of tenure type, to have other incomes, to share 
their  household  with  other  benefit  units  and  to  live  in  a  household  below  60 %  of  median  income 

28 

 
                                                 
 
The reasons for this vary widely. Information costs, administrative costs, disincentives 
(due  to  low  benefit  levels  and  short  duration),  social  and  psychological  costs,  errors  in 
evaluation procedures and discretionary assessment may be among the explanations.64 

In any case, the evidence clearly shows that a considerable number of people do not take 
up  benefits.  The  reasons  for  this  require  research  efforts  and  attention  from  policy-
makers, because: 

• 

• 

low  take-up  distorts  the  intended  effects  of  social  benefits  and  reduces  the 
chances  of  programmes  achieving  their  objectives.  Non-take-up  lowers  the 
capacity of SA to reduce the at-risk-of-poverty rate and widens the poverty gap.65 

if  a  benefit  is  not  claimed  because  of  reasons  such  as  lack  of  information,  this 
creates  disparities  in  the  way  potential  claimants  are  treated  in  a  welfare 
programme supposed to treat them equally.66 

4.1.3.  Minimum income schemes: the issue of adequacy 

In most Member States, for most types of household, minimum income benefits alone 
are not enough to lift people out of being at risk of poverty. Chart 6 shows the level of 
net  social  assistance  as  a  percentage  of  the  median  household  income  in  the  EU 
countries.  There  are  wide  differences  across  Member  States:  on  the  one  hand,  DK,  IE, 
and the NL have social assistance support (including housing) above 70 % of the median 
household income, while on the other, RO, PT, and BG all have social assistance support 
below 30 % of that level. 

before  housing  costs  (DWP,  2009).  Some  of  the  EU  Network  experts,  the  Austrian  for  instance, 
underline  the  fact  that  non-take  up  can  vary  significantly  by  region  within  a  country  (Frazer  and 
Marlier, 2009). 

64   Hernanz V., F. Malherbet and M. Pellizzari (2004) ‘Take-up of welfare benefits in OECD countries: a 
the  evidence’  OECD  Social,  Employment  and  Migration  Working  Papers 

review  of 
DELSA/ELSA/WD/SEM(2004)2. 

65   Matsaganis et al. (2008) . 

66   (Hernanz et al., 2004). 

29 

 
 
                                                                                                                                                 
Chart  7.  The  level  of  net  social  assistance  as  a  percentage  of  median  household 
equivalised income in EU-27,67 Single household, 2010 

Source: Eurostat, OECD. 

Mechanisms for raising MI benefits over time are important to ensure they are adequate. 
There has been a tendency towards benefits failing to keep pace with general living 
standards, and to lose ground relative to wage increases over time.68 This is often linked 
to  the  lack  of  clear  systems  and  procedures  for  regular  reviewing  of  the  level  of 
MI.69 

Measuring ‘adequacy’ is problematic. Setting the monetary poverty threshold at 60 % of 
median income does not reflect variations in consumption patterns and the cost of living 
across  a  given  country.  As  an  alternative,  the  reference  budget  (standard)  method 
defines  poverty  thresholds  with  reference  to  a  basket  of  goods  and  services  that  are 
considered  necessary  to  reach  an  acceptable  standard  of  living  within  a  given 
country or region. Once agreed, the basket is valued using detailed price data. 

Table  2  illustrates  reference  budget  methods  in  the  UK,  NL,  IE  and  BE  (Flanders), 
reflecting the sums needed to cover basic necessities, defined as food, clothing, fuel and 
rent.  The  methods  also  estimate  an  amount  for  other  goods  and  services  considered 
necessary to lead a decent life (e.g. transport, communication, heath care, personal care, 
education, etc.). In three methods (UK, BE, IE), the total is an amount close to or above 
60 %  of  median  income  threshold.  In  NL,  the  method  produces  a  much  more 
parsimonious  basket.  This  shows  that  efforts  to  define  the  set  of  goods  and  services 
that are absolutely necessary to escape poverty, even following strict methodological 

67   Italy and Cyprus excluded (no data available). 

68   This  reflects  the  more  general  downward  trend  for  social  assistance  benefits  standardised  for  wage 
increases  between  1990  and  2005,  Nelson  K.  (2009)  ‘Social  assistance  and  minimum  income 
protection in the EU: vulnerability, adequacy, and convergence’ Luxembourg Income Study Working 
Paper No 511. 

69   See  Frazer  and  Marlier,  2009,  and  the  country  reports  produced  by  the  EU  Network  of  independent 

experts for the country-specific institutional details on this. 

30 

 
 
 
                                                 
guidelines,  will  always  involve  significant  normative  assumptions  leading  to 
substantial differences in the amounts estimated. 

Table 2: Reference budget examples for a single person of working age 

UK Minimum 
Inc ome 
Standard 
2008

Netherlands 
NIBUD budget 
2008 

Ireland 
Vinc entian 
2006 

€ppp per year 2007 pric es

Flanders CSB 
2008

Food
Clothing
Fuel
Rent
Total nec essities
Total budget

2.499
473
558
3.240
6.770
13.018

1.761
522
881
3.403
6.566
8.599
€ppp per year 2008

2.949
723
327
2.921
6.921
15.039

Relative threshold 

11.126

11.485

10.901

1.604
414
1.107
4.169
7.294
10.129

10.046
(Belgium)

Source:  ‘The  measurement  of  extreme  poverty’  —  European  Commission  (2011)  and  EU-SILC 
(ilc_li01) 

4.2. 

Inclusive labour market measures 

By  inviting  Member  States  to  put  in  place  more  inclusive  labour  markets,  the 
Recommendation  called  on  them  to  support  access  and  return  to  employment  through 
active  labour  market  policies.  These  policies  include  lifelong  learning,  personalised 
support  and  guidance  that  meet  the  needs  of  those  furthest  from  employment,  while 
ensuring quality jobs, promoting job retention and enabling advancement. Providing such 
support  has  become  increasingly  challenging  as  jobs  losses  have  disproportionately 
affected jobs offering middle income and lower middle income. 

Most  Member  States  have  moved  towards  active  welfare  policies  in  which  income 
support  is  granted,  on  condition  that  the  recipient  is  actively  involved  in  looking  for 
work. Yet active labour market measures (such as profiling, job counselling, educational 
training and re-qualification) still account for only a small proportion of expenditure on 
the labour market across the EU, especially in eastern Member States. And while many 
Member  States  have  taken  steps  to  tackle  financial  disincentives  to  work  (for  instance, 
through  back-to-work  benefits  and  disregarding  a  portion  of  earnings  when  setting  tax 
liability),  in-work  poverty  remains  a  major  concern,  standing  at  a  rate  of  9.4 %.  Social 
enterprises  and  the  social  economy  in  general  have  already  proven  their  capacity  to 
provide  innovative  responses  to  the  current  economic  and  social  challenges  by 
developing  sustainable,  largely  non-exportable  jobs,  social  inclusion,  and  improvement 
of local social services. 

Assessment of the second pillar of active inclusion (inclusive labour markets) is based on 
a  series  of  indicators  reflecting  the  labour  market  friendliness  of  tax  and  benefits 
systems,  the  level  of  labour  market  segmentation,  the  level  of  participation  in 
activation measures, and the design and level of expenditures on ALMPs (see Annex, 
Table  2).  These  indicators  also  reflect  various  aspects  of  the  phenomenon  of  in-work 
poverty. 

Minimum  wages  often  act  as  a  ceiling  for  minimum  income  support.  As  such,  a 
comparison  of  minimum  wages  to  the  poverty  threshold  (60 %  of  the  national  median 
household  income)  gives  an  idea  on  the  adequacy  of  minimum  wages.  The  data  show 
wide  variations.  In  the  UK,  NL  and  IE,  the  minimum  wage  is  significantly  above  the 

31 

 
 
 
 
poverty  threshold.  On  the  other  hand,  in  EE,  SI,  HU,  and  SK,  minimum  wages  are 
significantly below it. Very low minimum wages also effectively risk creating inactivity 
traps. 

Support for activation is stronger in groups A (CZ, FR, NL, AT, SE, and CY), B (i.e. 
BE,70 DK, DE, FI), and C (IE), than in D (BG, IT, HU, MT, PL, and RO), and E (i.e. the 
Baltic  States,  EL,  and  SK).  It  appears  therefore  that  countries  that,  overall,  have  better 
performing social protection systems also have more comprehensive ALMPs. Transition 
out of poverty is also higher for northern and western European countries and lower in 
the east and south. 

Back-to-work  benefits  and  earnings  disregards  make  taking  a  job  more  viable. 
Inadequate  coordination  of  the  tax  and  benefits  system  may  lead  to  a  low-wage  trap71 
that  can  create  disincentives  when  a  worker  is  trying  to  increase  productivity.  This 
phenomenon  is  more  severe  in  group  B  (BE  DK  DE  FI  and  the  UK)  for  single-wage 
households and in group D (IT, HU, MT, and PL) for second-income earners. 

4.2.1.  The working poor in the EU72 

In-work poverty refers to a situation in which having a job does not enable a person and 
his/her family to escape poverty. Though employment is seen as the best way of doing 
so, there are those who are working and are still at risk of poverty. Access to employment 
is not enough to improve their situation. 

The main factors behind in-work poverty can be grouped under four categories: 

1) family/household composition, low work intensity and low wage; 

2) individual/personal characteristics;   

3) institutional factors (i.e. duration and type of contract, minimum wage, tax and social 
protection); 

4) structure of economy/labour market. 
Low work intensity73 and low wages contribute most to in-work poverty.74 In general, 
countries  with  high  at-risk-of-poverty  rates  have  high  in-work  poverty  rates  and  vice-

70   While  BE  has  high  spending  and  participation  on  ALMPs,  due  to  improper  design,  the  activation 

system seems to be ineffective. 

71   The  low-wage  trap  is  defined  as  the  rate  at  which  taxes  are  increased  and  benefits  withdrawn  as 
earnings  rise  due  to  an  increase  in  work  productivity.  This  kind  of  trap  is  most  likely  to  occur  at 
relatively  low  wage  levels  due  to  the  fact  that  the  withdrawal  of  social  transfers  (mainly  social 
assistance, in-work benefits and housing benefits), which are usually available only to persons with a 
low income, adds to the marginal rate of income taxes and social security contributions. 

72   Based on European Commission Employment and Social Developments in Europe 2011(ESDE 2011) 
and  2012  (ESDE  2012)  and  on  European  Commission  Staff  Working  Document  -  Evidence  on 
Demographic and Social Trends, SWD(2013) 38. 

73   People living in households with very low work intensity are defined as people of all ages (0-59 years) 
living in households where the adults (those aged 18-59, but excluding students aged 18-24) worked 
less than 20 % of their total combined work-time potential during the previous 12 months (EU SILC 
definition). . 

74   ESDE 2011. Pg. 153. 

32 

 
 
                                                 
versa.  In-work  poverty  rates  tend  to  be  highest  for  single  parents  with  dependent 
children.  Rates  are  much  higher  for  those  on  temporary  contracts  or  working  part-
time. The tax rate for low-wage workers has increased in recent years, though with wide 
variations  across  Member  States.  Lack  of  access  to  services,  such  as  childcare,  which 
forces women to opt for part-time work, can also cause in-work poverty. 

The more members of a household there are in work, the lower the risk of poverty. Thus, 
the one-breadwinner family household, in which work intensity is low to medium, is not 
protected from the risk of poverty. In fact, across the EU, the risk for such households is 
between 15 % and 50 %. For almost half the adult population and most households in the 
EU,  work  intensity  is  high  to  very  high  (80 %-100 %).  Next  come  households  with 
medium work intensity (40 %-60 %) covering nearly 20 % of all adults. This is the type of 
household involving 25 % of adults in southern Member States (ES, IT, MT, ES), where 
female participation in the labour market is low. By contrast, in DK only 10 % of adults 
live in medium work intensity households. 

Single  parents  and  children  are  particularly  exposed  to  in-work  poverty.  If  there  are 
children in a household, this directly affects the risk of poverty, as total income has to be 
shared among more people. However, in most Member States, very high work intensity 
can reduce the risk of poverty affecting children. This is not the case for BG, EE, LT, PL, 
PT and ES. This may be due to low levels of child benefit and wages. In DE, however, 
the  risk  of  poverty  for  families  with  children  is  similar  to  that  of  the  same  type  of 
household  in  DK,  despite  lower  work  intensity  (usually  medium).  This  highlights  the 
need  for  good  family  support  at  different  levels  of  work  intensity.  As  in  DE,  most 
families  in  ES  and  IT  are  medium  work  intensity  households.  In  ES  and  IT,  however, 
only high work intensity seems to alleviate the risk of poverty, mainly because of higher 
wages and largely due to lack of family support. 

Low  wages  have  an  impact  on  in-work  poverty  because  they  affect  individual  and 
household  income.  There  is  a  danger  that  low-wage  temporary  employment,  especially 
among young people, may become a persistent feature of working life. Among the self-
employed, wages have gone down considerably because of the crisis. 

Women, young people, older workers, migrants and the low-skilled are more at risk 
of in-work poverty than other groups. Across the EU, the in-work poverty risk for men is 
higher than for women. This may be because women tend to be second-income earners 
(thereby  better  protected)  and  have  actually  gained  employment  in  a  medium-to-higher 
paid  wage  structure  during  the  recession.  Yet,  single  mothers  and  single  women  are 
particularly at risk of in-work poverty compared to others. There is no strong correlation 
between age and in-work poverty. Young people tend to be more vulnerable if they live 
by themselves, or if they hold a student job or ‘mini job’ (e.g. in DK, SE). 

In-work poverty is highest for people working less than a full year, followed by those 
in temporary contracts or in part-time employment. Apart from IE, MT and UK, all 
Member  States  have  in-work  poverty  rates  for  those  on  temporary  contracts  that  are 
almost double those seen in permanent employment. Only in IE, MT, UK and DK does 
in-work poverty prevail in permanent employment. Young people, migrants and those in 
low-skilled labour are most likely to be on temporary contracts. For instance, in Poland, 
those on temporary contracts account for up to 26.8 % of total employment, working in 
jobs with a wage penalty of 27.8 % relative to permanent contracts. These factors tend to 
trap  people  in  poorly-paid  jobs  and  hamper  upward  mobility.  In  Spain,  the  in-work 

33 

 
poverty  rate  for  temporary  workers  is  four  times  higher  than  for  permanent  workers.75 
Those on temporary contracts would usually prefer to be on permanent contracts, so the 
temporary aspect is involuntary, except in DK and AT. Involuntary part-time work is a 
growing issue in many countries, such as DE, where wider use of non-standard contracts 
has increased flexibility on the labour market, but also led to further inequalities among 
workers.76 

4.2.2.  Active Labour Market Policies (ALMPs) for the people furthest from 

the labour market77 

Shared  characteristics  of  ALMPs  in  Member  States  are  profiling,  job  counselling, 
educational  training  and  (re-)qualification.78  Subsidised  employment,  public  work 
programmes,  short-term  paid  employment,  traineeships  and  voluntary  work  are  among 
ways  of  reintegrating  people  into  work.  While  all  Member  States  have  policies  for  the 
unemployed  and  job  seekers  generally,  the  degree  to  which  these  target  those  who  are 
furthest  from  the  labour  market  (e.g.  social  assistance  recipients)  varies  substantially. 
However,  some  Member  States  (BE,  DE,  AT,  FI,  LU,  PL,  SI)  specifically  target  these 
recipients by means of separate programmes. 

ALMPs79 account for only a small share of Member States’ GDP in the EU-27 (0.85 % of 
the  GDP  on  average),  and  these  policies  are  mostly  financed  through  unemployment 
insurance funds. DK, BE, NL, and SE had the highest share of ALMP spending in 2010. 
Sometimes  ALMPs  go  hand  in  hand  with  passive  labour  market  policies,80  as  in  DK, 
providing  an  effective  tool  for  both  protection  and  activation,  though  passive  policies 
have much a more prominent role in ES and BE. Most eastern European countries spend 
little  (see  the  chart  below)  on  labour  market  policies,  whether  active  or  passive.  There 
has been no significant rise in funding for ALMPs in recent years. 

75   Commission  Staff  Working  Document,  Assessment  of  the  2012  national  reform  programme  and 

convergence programme for Poland and Spain, SWD(2012) 323 final, SWD(2012) 310 final. 

76   Commission  Staff  Working  Document,  Assessment  of  the  2012  national  reform  programme  and 

stability programme for Germany, SWD(2012) 305 final. 

77   Unless indicated otherwise, based on the Active Inclusion Country Surveys 2008-2011. . 

78   For a classification by type of action see Eurostat (2010). Labour market policy — expenditure and 

participants.  

79   In  EU  ALMPs  include  labour  market  services,  training,  job  rotation  and  sharing,  employment 
incentives, supported employment and rehabilitation, direct job creation, and start-up incentives. 

80   Passive labour market policies include various unemployment benefits and early retirement. 

34 

 
 
 
 
                                                 
 
Chart  8:  Active  and  passive  labour  market  policies  expenditure  in  percentage  of 
GDP, 2009 

Source: Eurostat LMP database, 2010 

Among  the  unemployed  and  recipients  of  social  assistance  and  activation  policies, 
Member States identify different sub-targets for ALPMs, among which young and older 
workers,  low-skilled  and  long-term  unemployed,  migrants  and  people  with 
disabilities. For example, IE targets older workers, while the UK targets young people 
within the Jobseeker’s Allowance scheme. DK and SE have separate schemes for older 
workers and young unemployed people. Measures currently in place in DE, SK, SI and 
ES tend to focus on the long-term unemployed. Few efforts are made to provide special 
support  to  integrate  migrants  into  the  labour  market,  although  Vienna  is  a  notable 
exception. 
An overwhelming majority of Member States81 link the right to income support to the 
willingness  to  work  and  a  minimum  commitment  to  seeking  a  job,  vocational  or 
occupational training. In SK, proving one’s willingness to work and to accept a suitable 
job is only compulsory when applying for the highest level of income support benefit.82 

The conditions under which job seekers have to accept a job offer varies across Member 
States. In CZ and DE, job seekers are required to accept any job, even if it is short-term, 
or a mismatch with their skills. In LV, EE, SK, MT and NL, job seekers are obliged to 
accept suitable work only (subject to the relevant authority’s assessment). 

If  a  job  seeker  is  unable  to  find  work,  most  Member  States  offer  vocational  or 
occupational training. Some also provide various counselling services which can cover 
advice to manage debt or addiction or psychological support (DE) during drug or alcohol 
rehabilitation (MT). In SI, job seekers may have to sign a contract with the Social Work 
Centre  to  take  part  in  social  and/or  health  programmes  (SI).  In  other  countries  such  as 
LU, an ‘integration allowance’ is available only if job seekers take part in an ‘integration 
activity’. 

If  occupational  or  vocational  training  is  not  successful,  some  public  administrations 
provide (mandatory) measures to ensure activation (NO, RO, BG, NL, LV, HU). This 
may  mean  compulsory  involvement  in  public  works  (e.g.  providing  social  services, 
cleaning).  This  dimension  should  in  many  cases  be  complemented  by  improving  job 

81   MISSOC  Analysis  (2011).  Guaranteed  Minimum  Resources,  MISSOC  Secretariat  for  the  European 

Commission, Contract nr. VC/2010/1131 .Pg 17. 

82   MISSOC Analysis (2011). 

35 

 
                                                 
seekers’ prospects of finding work, to avoid locking them into such schemes (LV, HU).83 
In NL, a young person who is not in employment or education (NEET) has the right to 
request a job or an offer of a place in education from the local municipality.84 

‘Reluctant behaviours or attitudes’ such as refusing a job offer or refusing to take part in 
ALMPs  are  generally  penalised  by  sanctions.  These  vary,  and  include  withdrawal  of 
benefits  and  grants  (e.g.  in  EE,  SI,  LT,  CZ,  EE),  withdrawal  of  benefits  (e.g.  BG,  CY, 
HU), suspension of benefits (e.g. LT, DK) or lowering the level of benefits (LV, IE). 

Box 1: Recent activation measures in Ireland 

The main types of measures introduced are: 

•  active  case  management  and  profiling  services  for  recipients  of  benefits  of 

working age (Department of Social Protection); 

• 

reform  and  consolidation  of  job-placement  services  and  related  provisions  for 
the unemployed in the Department of Social Protection and effective separation 
between job placement and training provision (the latter has been moved to the 
Department of Education and Skills); 

•  scaling  up,  targeting  and  further  diversifying  the  training  and  work  experience 
available. Community Employment is a new scheme that offers places as part of 
the  response  to  the  crisis,  and  a  new  job  creation  programme,  the  Community 
Work  Placement  Initiative  (Tús),  has  been  rolled  out,  both  noteworthy 
developments. 

‘FAS’ employment services and the Community Welfare Service have been integrated 
into  the  Department  of  Social  Protection  in  a  restructuring  of  the  way  different 
departments operate, focused solely on labour market activation. 
(Source: Irish expert’s report)85 

As  a  response  to  the  economic  crisis,  most  governments  recognise  the  need  to  step  up 
efforts  to  develop  measures  tailored  to  specific  vulnerable  groups,  notably  the  young, 
older  unemployed  people,  and  women.  The  main  priorities  for  ALMPs  in  NRPs  are 
expanding educational measures (including on-the-job and vocational training) to reduce 
skills mismatches, expanding and improving job (search) counselling for the unemployed 
to  improve  the  matching  process,  and  tax  reforms  that  benefit  low-wage  earners  to 
support  labour  market  participation  even  during  high  unemployment,  as  implemented 
recently by e.g. AT and LU. 

83    Commission Staff Working Documents, Assessment of the 2012 national reform programme and 
convergence programme for Hungary and Latvia, SWD(2012) 317 final, SWD(2012) 320 final. . 

84   The recently adopted Youth Employment Package aims to tackle the phenomenon of NEET at 

Member State level. For more information see: COM(2012) 727 final. 

85   In Frazer, H. and Marlier, E. (2012). Assessment of the implementation of the European Commission 

recommendation on active inclusion, Synthesis report. 

36 

 
 
 
 
                                                 
4.2.3.  Income support and work incentives 

For  Member  States,  designing  social  benefits  without  eroding  incentives  to  take  up 
work  is  a  key  concern.86  Schemes  are  increasingly  designed  to  avoid  creating 
unemployment and inactivity traps, as well as low wage traps for people in work and 
in receipt of MI benefits. Member States have, for instance, adopted measures to reduce 
the tax wedge (direct labour taxation plus social security contributions) on lower wages, 
to raise minimum wages, to offer in-work benefits, and they have reviewed the design of 
out-of-work benefits, including social assistance.87 

Back-to-work benefits and earnings disregards make participation in the labour market 
more  viable.  Several  countries,  CY,  DE,  LT,  FR,  PT,  RO,  SI,  SE  and  IE  make  use  of 
various  forms  of  back-to-work  or  tax  allowances,  with  gradual  phasing  out  of  SA 
payments. Similarly, earning disregards are a common practice in CY, DE, AT, BE, LU, 
MT, NL, SK, CZ, DK and LT. In many cases, around 30 % of earnings are disregarded 
when  calculating  social  benefits.  In  addition,  special  allowances,  e.g.  for  single  parents 
and  children  (MT)  and  compensation  payments  for  voluntary  work  (NL)  can  top  up 
incomes. 

Specific factors in the design of MI schemes might result in disincentives to take up 
work. These include:88 

1.  high  benefit  withdrawal  rates89  (also  with  regard  to  secondary  benefits 

providing access to key services such as health care and childcare); 

2.  lack  of  systematic  mechanisms  to  adjust  the  value  of  earnings  disregards90 

over time so as to avoid their erosion; 

3.  regulations requiring former beneficiaries to refund benefits. 

4.3.  Access to quality services 

The  Recommendation  invited  Member  States  to  enable  access  to  quality  services, 
essential  to  support  people’s  inclusion  in  the  labour  market  and  more  generally  their 
resilience  and  participation  in  society,  making  sure  such  services  are  available  across 
territories,  physically  accessible  and  financially  affordable.  Such  services  should 

86   The  Employment  package  (COM(2012)  173  final),  launched  in  April  2012,  is  a  set  of  policy 
documents looking into how EU employment policies intersect with a number of other policy areas in 
support  of  smart,  sustainable  and  inclusive  growth.  It  identifies  the  EU’s  biggest  job  potential  areas 
and the most effective ways for EU countries to create more jobs. Measures are proposed in the areas 
of  supporting  job  creation,  reforming  labour  markets,  investing  in  skills,  improving  EU  governance, 
etc. 

87   See  also  European  Commission  (2009)  ‘Recent  reforms  of  the  tax  and  benefit  systems  in  the 

framework of flexicurity’ European Economy Occasional Papers 43, Feb 2009. 

88   EU Network of Independent Experts, 2009. 

89   As a result of taking up work, benefits are reduced significantly. 

90   Earnings  disregards  are  the  part  of  income  that  is  not  taken  into  account  when  assessing  whether 

eligibility conditions are met by the applicants. 

37 

 
 
 
                                                 
emphasise solidarity, equal opportunities for users and employees, quality investment in 
in  a 
human  capital  and 
comprehensive and coordinated manner. 

infrastructures,  while  being  designed  and  delivered 

This  review  shows  that  the  potential  to  improve  access  to  services  seems  to  be  very 
considerable, as few Member States report better access to housing or to childcare, and 
access to social assistance and health services has not improved much either.  

Access  to  services  is  reviewed  according  to  indicators  reflecting  access  to  childcare, 
housing costs, adult participation in education and training, and social gradient91 in 
unmet need for health care (see Table 3 from the Annex). Differences among Member 
States  are  most  significant  on  two  indicators:  access  to  childcare  and  participation  in 
education and training for those with a low level of education. Group A and B countries, 
mostly  in  northern  and  western  Europe)  tend  to  have  high  childcare  use  and  high 
participation  in  education  and  training.  Group  C,  D,  and  E  (eastern  and  southern 
European countries plus Ireland) tend to have low childcare use and low participation in 
education and training. 

A recent OECD study on publicly provided services has confirmed that better access to 
specific  services  such  as  healthcare,  childcare,  housing  and  care  for  the  elderly  can 
contribute  significantly  to  reducing  inequality  in  society  and  thus  reduce  the  level  of 
poverty across various groups.92 The impact of such services can be particularly relevant 
for 

(1) children and the elderly because of their higher use of education and health services 
respectively; 

(2) single parents, and couples with children, because of their higher use of education 
and childcare services; and 

(3) households with high work intensity. 

Reduced  rent  tenants  and  people  with  a  lower  level  of  skills  may  also  benefit,  albeit 
less  so.  Regarding  service  delivery,  there  is  evidence  that  universal  service  provision 
generates  fewer  problems  related  to  stigmatisation  or  discrimination  compared  to 
traditional, targeted social assistance benefits.93 

4.3.1.  Access to services in the Member States94 

Most  Member  States  report  that  the  poor  now  have  better  access  to  employment  and 
training, but the potential of other services to lift people out of poverty remains relatively 

91   Social gradient reflects the position of an individual or population group in society and the variations 
in  their  access  to  and  security  of  resources  such  as  education,  employment  and  housing,  as  well  as 
different levels of participation in civic society. 

92   OECD-European Commission (2011): The impact of publicly provided services on the distribution of 

resources. 

93   Marx, I. (2010). Minimum income protection in post-industrial economies: on getting the balance right 
between incrementalism and innovation, in Social protection for a post-industrial world, ed. Kemp, P. 
A., International Studies on Social Security, vol. 15. 

94   This section is based on Country Surveys on Active Inclusion unless stated otherwise. 

38 

 
 
 
                                                 
underexploited.  Several  Member  States  report  better  access  to  housing,  but  few  report 
improvements  in  access  to  childcare.  Better  access  to  social  assistance  and  health 
services ranks below the others. 

Self-reported improvements in access to employment and training opportunities may 
be  linked  to  Member  States’  increased  use  of  labour  market  ‘activation’  approaches, 
tougher  conditionality  on  taking  up  work,  compulsory  participation  in  public  works 
programmes and growing sheltered employment.95 
According  to  independent  EU  experts  on  social  inclusion,96  only  a  small  number  of 
Member States have taken steps to improve services essential to support active social and 
economic inclusion policies since 2008. 

Six have focused on those who can work, AT, BE, EE, DE, LU, MT, and four on those 
who  cannot,  BE,  EE,  LU,  MT.  Such  services  include  social  assistance  services, 
employment and training services, housing support and social housing, childcare, long-
term care services and health services. 

Reported improvements in access refer to such services being set up for these groups in 
the first place, rather than specifically addressing the obstacles disadvantaged groups face 
when trying to access services. There has yet to be more attention to designing services 
to reach out, through e.g. ‘peer’ inclusion, developing effective mixtures of targeted and 
universal services, reducing adverse effects of stigmatisation or removing administrative 
burdens. 

Table  3.  Areas  in  which  Member  States  have  improved  access  to  services  for  the 
most disadvantaged 

a. employment and training  AT; BE; BG; CY; CZ; DK; EE; FI; FR; DE; EL; IE; IT; 

LV; LU; MT; NL; PL; PT; RO; SK; SI; ES; SE; UK 

b. social assistance 

DK; FI; LT; LU; RO 

c. health 

LV; LT; RO; SI;  

d. transportation  

BE; AT 

e. housing 

f. childcare 

g. banking 

AT; BE; BG; DK; FR; LT; LU; RO; SI; ES;  

AT; CY; HU; LU; MT; PL; 

CZ; DK; 

h. other ______________ 

EE  (in-kind  benefits  (varies  by  municipality));  IE 
(education);  IT  (social  card);  PT  (in  kind  benefits/ 
associated rights (local level in response to the crisis)); 
UK (school meals for children).  

Source: Country Surveys on Implementation of Active Inclusion Strategies 2008-2011 

95   Sheltered employment refers to jobs that provide a certain level of supervision and guidance, usually 

designed for people with disabilities. 

96   Frazer,  H.  and  Marlier,  E.  2012.  Assessment  of  the  implementation  of  the  European  Commission 

recommendation on active inclusion. 

39 

 
 
 
                                                 
Among countries reporting better access to housing, BE has set up a national framework 
to reimburse housing-related costs, funded by the autonomous Committee for Regulation 
of Electricity and Gas. Those on social benefits automatically get ‘social’ rates (equalling 
the lowest rate on the market), and there are ceilings on the maximum rates for gas and 
electricity. Beneficiaries can also claim fixed-price heating allowances (stookoliefonds). 

In AT, the new means-tested social assistance scheme (BMS) also assesses housing needs 
and  costs.  Previously,  there  was  a  separate  procedure  to  request  a  housing  allowance. 
Since 2009, RO has a lower eligibility threshold for heating allowances, which benefits 
low-income  households.  For  households  on  social  assistance,  heating  and  gas  expenses 
are fully covered by the state. In its NRP, BG allocates funds to expand modern social 
housing  for  the  most  vulnerable.  Housing  allowances  are  provided  on  a  very 
discretionary  basis  and  access  depends  on  the  municipality.  In  2009,  there  was  a  shift 
from  means-tested  in-kind  heating  allowances  (e.g.  coal  blocks)  to  in-cash  heating 
allowances paid directly to electricity providers. 

Six  Member  States  (AT,  CY,  HU,  LU,  MT  and  PL)  report  better  access  to  childcare 
services  for  the  poor.  In  2009,  AT  introduced  compulsory  pre-school  education  (on  a 
half-day basis) at federal level. In 2011, the government decided to create an additional 
5000 early childhood education and care institutions between 2012 and 2014. In Vienna, 
childcare  for  children  up  to  the  age  of  six  is  free  of  charge.  Since  2009,  LU  has  run  a 
‘cheque service’ (child-care service voucher) system, reducing childcare costs, especially 
for low-income families and SA recipients. 

MT, PL and HU report commitments to increasing the number of childcare and toddler 
institutions (‘Maluch’ Programme in PL). Using the ESF, CY planned a 2011 reform of 
its  care  system,  providing  partial  reimbursements  of  costs  associated  with  care  for 
children,  the  disabled  and  older  people.  However,  the  reform  is  intended  primarily  to 
further women’s participation in the labour market, rather than to improve the situation 
of the poor in general. 

In a number of countries (PT, SK, SI, UK, LT) not reporting better access to childcare 
services, there are nevertheless more in-kind services, such as subsidised transportation, 
school supplies and free school meals for children of SA recipients. 

Box 2. Client input into service delivery: Belgium — Expert by Experience 

(cid:131) 

Involvement  of  26  ‘Experts  by  Experience’  who  are  experiencing  or  have 
experienced  poverty,  spread  over  22  administrations,  to  improve  access  to 
social  services  for  all  citizens  (including  the  poor  and  those  most  detached 
from the labour market) 

(cid:131)  Problem: legislation and practices are designed by and for middle class — > 
use  of  ‘Experts  by  Experience’  aims  to  improve  accessibility  and  to  make 
known the views of users, so as to improve tailored services 

(cid:131)  Support to experts: training and mentoring system 

(cid:131)  Challenges: dissemination of information about the role of EbyE, define/build 
up  profile  of  EbyE,  make  sure  there  is  effective  communication  with 
colleagues about EbyE, improve support systems for coaches and mentors 

Source:  SPC  Multilateral  surveillance  on  active  inclusion,  MS  presentation, 

40 

 
 
 
 
February 27 2012 

As for healthcare  services, a number of countries provide full cover for SA recipients 
(CY,  LU,  MT,  LV,  CZ,  UK,  SI,  ES).  BE  did  not  report  improvements,  but  grants  SA 
recipients  the  automatic  right  to  substantial  reimbursements  of  medical  costs  and  a 
guarantee that health expenses do not exceed a certain threshold. In BG, PL and PT, the 
coverage of SA recipients’ health expenses is heavily discretionary and depends on the 
municipality. 

With  regard  to  social  assistance  services,  some  governments  provide  a  wide  range  of 
services  at  national  level.  These  comprise  psycho-social,  alcohol  and  drug  counselling 
and  family  assistance  (e.g.  DE,  SE).  In  the  UK,  counselling  services  are  delivered  by 
voluntary organisations (Citizens Advice Bureaux). In EE and IT, the availability of such 
services  depends  on  the  municipality.  Since  reforms  in  2008,  FI  has  a  thorough  social 
assistance  service,  linking  assessments  of  the  individual’s  capacity  to  work  with  job-
seeking  assistance  and  the  setting  up  of  employment  plans  with  rehabilitation.  The 
delivery  of  cash  and  in-kind  social  assistance  is  spread  across  agencies,  social  workers 
and other professionals. 

Banking  and  transport  services  were  reported  by  a  few  Member  States.  CZ  has 
introduced financial literacy courses at secondary school level and is planning versions 
for primary schools, and may be one of the most innovative service providers. Analysis 
of  country  surveys  shows  that  banking  services  (debt,  mortgage,  counselling  and  legal 
assistance) are not confined to reporting countries (CZ and DK), but can also be found in 
DE, HU, NL, UK, SI, EE, IT, LV. The same applies to free public transport. AT grants 
free access to public transport to SA recipients, as do CY and LU, as well as FR, at least 
partially. Subsidised public transport is available to SA recipients in BG and PT. 
The  EU  social  inclusion  experts97  provide  examples  of  measures  that  improve  the 
inclusiveness  of  education  and  training  opportunities.  BE  is  reforming  tertiary  and 
secondary education systems to widen access and is improving transitions from education 
to  work  through  better  career  guidance  and  partnerships  with  enterprises.  DK  is 
developing  effective  lifelong  learning  strategies  and  increasing  the  number  of  young 
unemployed people being trained through apprenticeship schemes. It is developing jobs 
and  skills  development  packages  for  young  people  who  are  academically  weak.  In  the 
Estonian NRP, a lot of attention is paid to preventing and reducing youth unemployment 
by providing high-quality education, reducing school drop-out rates and preparing young 
people more effectively for working life. 

In  a  number  of  Member  States,  food  aid  is  available  in  various  forms.  In  EE  and  IT, 
‘social cards’ make people on low incomes eligible for food aid. In PL and PT, food aid 
was introduced as an immediate response to the social consequences of the crisis. RO has 
increased the number of social canteens in urban areas. They provide two hot meals a day 
for  SA  recipients  and  families  on  low  incomes.  In  SI,  NGOs  provide  free  packages  of 
food,  vaccination  and  clothing.  In  the  UK,  those  on  income  support  or  jobseeker 
allowance  can  apply  for  ‘healthy  start  vouchers’  to  be  spent  on  milk,  fresh  fruit  and 
vegetables or infant formula. 

97   Frazer,  H.  and  Marlier,  E.  2012.  Assessment  of  the  implementation  of  the  European  Commission 

recommendation on active inclusion. 

41 

 
 
                                                 
Especially non-EU migrants face difficulties when accessing certain enabling services. In 
particular,  migrants  face  obstacles  when  it  comes  to  access  to  education  (especially 
higher  education),  employment  services  (including  information  on  job  vacancies), 
financial  services,  and  family  and  child  benefits.  These  obstacles  are  often  due  to 
problems  related  to  the  transferability  of  the  rights  to  access  social  assistance, 
unemployment  benefits  or  other  related  services,  the  appropriate  recognition  of 
qualifications and the long contribution periods required to use some of these benefits 
(unemployment benefits, social assistance).98 

4.3.1.1.Focus on childcare 

The availability and affordability of childcare has a crucial influence on parents’ access 
to the labour market. This holds true particularly for second earners and single parents on 
low  incomes.  The  availability,  quality  and  affordability  of  childcare  remain  an  issue  in 
many  countries,  as  highlighted  in  nine  of  the  country-specific  recommendations  the 
European Council adopted in July 2010 (CZ, DE, IT, SK, UK, MT, PL, AT, and HU). 
The challenge is even greater for households on a low income. 

Persisting low access to childcare for households on low income 

The latest information from EU-SILC shows that most Member States are lagging behind 
EU targets for childcare set in 2002, the so-called Barcelona targets. In 2010, there was 
provision for 28 % of children below the age of three and 83 % of children between the 
ages  of  three  and  six.  Access  appears  to  be  most  difficult  for  households  with  low 
incomes. Those on low incomes make far less use of childcare. This is also the case in 
countries  close  to  achieving  the  target,  with  a  few  exceptions,  such  as  Denmark  or 
Sweden.99 This gradient shows the additional obstacles that households on low incomes 
face when they seek childcare, which include: 

•  employment status — the more hours one or both parents work, the greater their 

need for childcare; 

•  eligibility criteria — e.g. places may be reserved for parents that are employed; 

• 

• 

lack of services, particularly in disadvantaged or rural areas; 

lack of affordable services. 

Affordability remains a major challenge 

98   Institute  for  the  Study  of  Labour  and  the  Economic  and  Social  Research  Institute  (2011).  Study  on 

active inclusion of migrants,  

99   The  unequal  benefits  of  activation:  an  analysis  of  the  social  distribution  of  family  policy  among 
families with young children, Joris Ghysels and Wim Van Lancker, 2011 Journal of European Social 
Policy. 

42 

 
 
                                                 
Chart 9: Public expenditure on early child care and education by income quintile 

Source: M. Vaalavuo 

Despite the redistributive effects of government support, the cost of childcare is still an 
obstacle  for  families  on  low  incomes,  as  it  can  significantly  reduce  disposable  income. 
Even  after  deducting  government  support,  out-of-pocket  expenses  for  two  preschool 
children can add up to 20 % or more of a family budget.100 Single parents are least able to 
afford childcare. 

The cost of childcare can be an obstacle to parents wanting to go back to work, especially 
for  single  parents  and  second  earners  on  a  low  income.  These  costs  appear  to  create 
significant  inactivity  traps  in  a  number  of  EU  countries,  by  reducing  net  income  gains 
from  employment  to  such  an  extent  that  parents  are  better  off  caring  for  their  children 
themselves101  at  home.  The  pattern  of  such  disincentives  varies  in  different  countries: 
high childcare costs (IE and MT), low earning prospects (in CZ, SI) or a combination of 
both (BG, LV). 

These  barriers  could  be  addressed  if  government  assistance  to  reduce  the  cost  of 
childcare targeted low-income families more effectively. 

5.  COMPREHENSIVE  POLICY  DESIGN,  INTEGRATED  IMPLEMENTATION,  VERTICAL 

COORDINATION, AND ACTIVE PARTICIPATION OF RELEVANT ACTORS 

5.1. 

Integrated Approaches 

The 2008 Recommendation advocated an integrated approach to active inclusion which 
should have yielded a one-stop-shop approach, delivering on all pillars in an integrated 
manner that could reduce the administrative burden on both customer and provider. An 
integrated, comprehensive approach should be based on: 

•  comprehensive policy design, 

• 

integrated implementation, 

•  vertical coordination, 

•  participation of relevant stakeholders. 

100   ‘Can parents afford to work? Childcare costs, tax-benefit policies and work incentives’, OECD Social, 

Employment and Migration Working Papers, No 31, 2006, available at: 
http://www.oecd.org/dataoecd/58/23/35862266.pdf. 

101   ‘Report on childcare costs — Can parents afford to work? An update’ OECD, 2011. 

43 

 
 
                                                 
 
Assessment  of  the  effectiveness  of  active  inclusion  strategies  requires  further  analysis 
based  on  adequate,  up-to-date  data.  Limited  evidence  available102  shows  that  Member 
States have not yet developed fully-fledged integrated, comprehensive strategies, though 
several  have  taken  encouraging  steps.  This  may  be  due  to  the  greater  fiscal  and 
administrative burden of implementing such a strategy. 

A fully comprehensive policy has to define the right mix of the three strands of active 
inclusion, taking into account their joint impact on the social and economic integration of 
disadvantaged people and their possible interrelationships, including synergies and trade-
offs. 
According  to  the  independent  experts’  analyses,103  such  a  strategy  is  only  evident  in 
about a quarter of Member States (DK, FI, FR, MT, NL, PL, SE) for those who can work 
and in just two Member States (NL, SI) for those who cannot. Only six Member States 
(BE,  DK,  FR,  MT,  SI,  SE)  have  developed  effective  systems  for  integrated 
implementation of active inclusion policies for those who can work and only three (LU, 
MT, SI) for those who cannot. 

The  extent  to  which  there  is  effective  policy  coordination  among  local,  regional, 
national  (and  EU)  authorities  in  the  light  of  their  particular  roles,  competences  and 
priorities varies significantly across countries. Five (BE, DK, FI, LU, NL) are assessed as 
having such coordination arrangements for active inclusion measures both for those who 
can  work  and  for  those  who  cannot.  The  results  of  the  full  analysis  are  summarised  in 
Table 5 in the Annex. 

The  assessment  of  the  country  surveys  on  active  inclusion  shows  that  most  Member 
States  report  a  fully-integrated  strategy.  Only  six  countries  report  a  partially-integrated 
strategy, and IT and EL report a non-integrated approach. A closer analysis of the active 
inclusion  policies  reported104  reveals  what  Member  States  understand  by  an  integrated 
strategy. 

Table 4. Integrated active inclusion strategy among the Member States 

fully 

integrated: 
a.) 
minimum income scheme 
is 
labour 
activation  measures  and 
access to services 

linked 

to 

AT; BE; CY; DK; FI; DE; HU; LV; LU; MT; NL; PL; PT; 
SK, SI; SE; UK; CZ; RO 

b.)  partially 
integrated: 
minimum income scheme 
labour 
with 
linked 
activation measures 

BG; FR; IE; LT; ES; EE 

e.) not integrated  

EL; IT 

102   Based on the informal consultation (carried out in April-May 2012) of civil society organisations and 

the Country reports on active inclusion. 

103   Frazer,  H.  and  Marlier,  E.  2012.  Assessment  of  the  implementation  of  the  European  Commission 

recommendation on active inclusion. 

104   Based on cross-analysis of Questions 15 and 16 (Describe the specific programme(s) that integrate (s) 
any of the three pillars by providing the starting date of the programme). It should be noticed that most 
Member States did not report any specific programmes under Q16. 

44 

 
  
                                                 
Source:  Country  Surveys  on  Implementation  of  Active  Inclusion  Strategies 
between 2008-2011 

For countries classifying themselves as providers of fully-integrated strategies, e.g. AT, 
BE,  UK,  an  integrated  strategy  means  minimum  income  recipients  have  an  ‘automatic 
right’ (enshrined in law) to services and to participation in ALMPs. 

However,  as  in  the  case  of  the  UK,  policies  are  often  designed  to  strengthen  the  link 
between MI and ALMPs rather than linking MI-ALMPs-Services, and services are often 
focused mostly on childcare. 

Countries report significant obstacles to a full-fledged strategy. These involve problems 
with  implementation  at  local  level,  e.g.  due  to  coordination  problems  between  public 
employment  services  (PES)  and  social  agencies;  policy  competences  scattered  across 
policy levels; restricted access to services due to lack of funding (e.g. in PT) and lack of 
political prioritisation. 

Countries classifying themselves as providers of partially-integrated strategies report the 
following  obstacles.  In  FR,  RSA  recipients  registered  with  the  public  employment 
services do not automatically receive support in training and education; access to services 
depends heavily on the financial situation in a region. In BG, few employment services 
are  specifically  targeted  to  minimum  income  recipients.  In  LT,  not  all  recipients  of 
minimum  income  benefit  from  their  right  to  a  housing  allowance.  The  situation  varies 
substantially by municipality. 

Civil  society  organisations  report  a  different  picture.  There  is  consensus  that  fully-
fledged integrated and comprehensive strategies have not yet been developed by Member 
States,  and  that  there  has  been  too  much  emphasis  on  the  employment  pillar.  Civil 
society organisations refer to various reasons for the lack of fully-fledged integrated and 
comprehensive  strategies:  lack  of  political  will,  coordination  problems,  competences 
fragmented across policy levels, the economic crisis and austerity measures. 
This is partly echoed by researchers105 on poverty and social exclusion, who note that 
the  European  agenda  on  combating  poverty  and  social  exclusion  appears  to  be  moving 
towards  a  largely  employment-focused  analysis  of  poverty.  They  make  a  claim  for 
greater clarity on concepts and objectives within a coherent, multidimensional model of 
social and economic disadvantage. 

5.2. 

Participation of relevant actors 

No  involvement  or  very  limited  involvement  of  all  relevant  actors106  in  the 
development, implementation and evaluation of active inclusion strategies is reported by 
larger  social  networks  (EAPN,  Eurodiaconia,  and  Cities  for  Active  Inclusion  -
EUROCITIES). 

105   Working  Paper  ‘Political  Implications  of  the  Current  Debate  on  Poverty,  Deprivation  and  Social 
Exclusion in Europe’ by Bjørn Hvinden & Rune Halvorsen (NOVA), October 2012. This theoretical 
paper is the first deliverable of the FP7 Research project COPE: ‘Combating Poverty in Europe: Re-
organising  Active  Inclusion  through  Participatory  and  Integrated  Modes  of  Multilevel  Governance’ 
(COPE) — http://cope-research.eu/wp-content/uploads/2012/04/Paper_Political_implications.pdf . 

106   Including  those  affected  by  poverty  and  social  exclusion,  civil  society  organisations,  non-

governmental organisations and service providers. 

45 

 
 
                                                 
Whilst  EAPN  members  can  highlight  no  current  examples  of  participation  of 
stakeholders  in  the  design  and  delivery  of  an  explicit  AI  strategy,  they  highlight  active 
participation in the National Action Plans/Social Reports under the Social OMC (2000-
2010)  and/or  NRPs,  often  promoting  strong  proposals  on  Active  Inclusion..  In  the  first 
NRPs  of  Europe  2020,  whilst  13  National  Networks  were  invited  to  participate  in  the 
NRP  process  (AT,  BE,  BG,  DK,  EE,  FR,  DE,  IE,  LU,  NL,  PT,  ES,  SE),  the  level  of 
meaningful stakeholder participation was scored very low (2.38 of 10), with most scoring 
very  low  (AT,  BG,  CZ,  DK,  EE,  IE,  IT,  MT,  NL,  PL,  RO,  SK,  SE,  UK),  with  only 
Belgium and Spain giving a positive rating (7 and 8). However, even in these countries, it 
was  difficult  to  get  proposals  taken  on  board,  and  in  the  case  of  Spain,  to  get 
implementation. 

Eurodiaconia  confirms  that  its  members  in  DE,  SE,  DK  were  not  involved  in  the 
development, implementation and evaluation of the strategies, with the exception of CZ 
which had been consulted via EAPN. 

CfAI-EUROCITIES reports that involvement of relevant actors differs between cities. At 
local  level,  cities  rely  largely  on  involving  relevant  stakeholders  such  as  NGOs. 
However,  the  extent  to  which  cities  are  consulted  at  national  level  is  not  always 
satisfactory.  As  AGE  Platform  Europe  reports,  in  several  (BE,  FR,  ML,  SI)  of  its 
member countries, AGE organizations are involved in regular consultation processes on 
social policy and can comment on draft reports upon request. 

5.3.  Case studies –Recent developments at national level 

RSA (revenue de solidarite active) in France107 

The  Revenu  de  Solidarité  Active  (RSA)  can  be  seen  as  a  cornerstone  of  France’s  current 
antipoverty  policy,  in  combination  with  the  minimum  wage  and  employment  subsidies.  The 
declared  objectives  are  to  integrate  and  simplify  existing  benefit  schemes,  to  combat  poverty 
more efficiently and to foster the transition into work. 

The RSA itself integrates several pre-existing schemes: 

• 

• 

Revenu Minimum d’Insertion (RMI ― the mainstream guaranteed minimum income); 

Allocation de Parent Isolé (API ― single parent benefit); and to some extent; 

Prime Pour l’Emploi (PPE ― a large-scale tax credit scheme designed to encourage part-

• 
time or low-paid employment and affecting 9 million households). 

The  RSA  encourages  the  take-up  of  work  by  exempting  62 %  of  any  earnings  in  calculating 
benefit.  Experiments  have  been  conducted  in  34  ‘départements’;  the  scheme  has  been 
mainstreamed as from June 2009. 

The following parameters sketch an overall picture of the scheme: 

• 
The RSA scheme is equivalent to a negative income tax. A basic benefit of € 410 (for a 
single adult) or € 590 (for a couple with no children) applies to claimants who do not work; for 
those who work, earnings are topped up by an in-work RSA supplement in such a way that 62 % 
of their net earnings are exempted. The implicit tax rate is set so as to make the benefit expire as 
the  claimant’s  earnings  approach  the  poverty  threshold  (SMIC  =  approx.  €  1 200  gross/  €  950 

107   Ides Nicaise (2011): Building the tools to fight in-work poverty, Synthesis report, France. Available at: 

www.peer-review-social-inclusion.eu. . 

46 

 
 
 
                                                 
net). In comparison with the pre-existing schemes, the RSA focuses more on the lowest income 
group and, above all, strengthens the work incentive component. 

• 
0.8 million households are expected to receive just the basic RSA (at zero earnings level) 
each trimester, while 1.8 million others would receive the RSA in-work supplement. Among the 
latter, 400 000 households would earn less than the basic benefit and would therefore receive both 
the basic and the in-work RSA. Overall, 6.9 million persons will be covered. 

• 
As the basic RSA will just replace existing schemes, the additional cost of the RSA will 
be attributable entirely to the (extra) in-work benefit payments, which will amount to € 1.5 billion 
per  year.  Savings  on  unemployment  benefits  because  of  increased  employment  have  not  been 
estimated. 

One of the explicit aims of the law is also to strengthen the activation pillar of social assistance. 
The issue of the access to RSA for citizens of other EU Member States demonstrating a real link 
with the French labour market is under assessment. Evaluations of the RMI system had revealed 
that  only  a  minority  of  beneficiaries  held  a  reintegration  contract.  An  objective  of  the  RSA 
reform is to assign a personal adviser to each household, to adopt a ‘rights and duties’ strategy 
from day one, and to transfer individuals more effectively into work or other activities.  

UK: administrative simplification and stronger work incentives through the universal credit108 

To  tackle  administrative  complexity  whilst  increasing  incentives  to  work,  the  UK  will 
progressively introduce from 2013 to 2017 a single Universal Credit. Most means-tested benefits 
and  tax  credits  for  working  adults  (including  Income  Support,  income-related  Jobseeker’s 
Allowance  and  Employment  and  Support  Allowance)  will  be  replaced  by  a  single  benefit. 
Claimants will receive just one monthly payment, paid into a bank account in the same way as a 
monthly salary. Support with housing costs will also go directly to the claimant as part of their 
monthly payment. 

The  principal  aim  of  Universal  Credit  is  to  simplify  the  system,  making  it  easier  for  people  to 
understand, and easier and cheaper for staff to administer. Claimants in need of various forms of 
support  will  spend  less  time  claiming  multiple  benefits  and  can  receive  one  single  streamlined 
payment. People can apply through their local authorities or online, and can manage their claim 
through  an  online  account.  By  eliminating  multiple  benefit  applications  and  improving  access, 
this system is expected to improve take-up of benefits by those who are entitled to them. 

As  the  Universal  Credit  integrates  both  in-  and  out-of-work  benefits,  it  seeks  to  smooth  the 
transitions  into  and  out  of  work  and  reduce  disincentives  to  entering  the  labour  market.  The 
reform also aims to increase work incentives through a lower withdrawal rate (65 %) and stricter 
rules  on  benefit  loss  if  an  individual  refuses  a  job  offer.  From  May  2012,  lone  parents  will  be 
required to actively seek work when their youngest child begins full-time education. A cap on the 
total amount of benefit that can be claimed could boost incentives to work and generate savings, 
however declining benefit levels could also translate into increased risk of poverty for claimants. 
High housing costs will also still mean that households in many areas will continue to face high 
marginal withdrawal rates up to a relatively high point in the income distribution. 

Universal Credit has the  potential of improving the accessibility of benefits to those entitled to 
them, though the success of this strategy will depend on its successful administration and proper 
response to the above challenges. Progress will be monitored on the national and EU level in the 
framework of the European Semester. 

108   SWD(2012) 309 final, Commission Staff Working Document, Assessment of the 2012 national reform 

programme and convergence programme for the United Kingdom. 

47 

 
 
 
                                                 
Iceland: Monitoring the Welfare System109 

Early  in  2009,  the  government  set  up  a  new  body  to  monitor  welfare  developments  during  the 
crisis,  aiming  to  provide  early  warning  of  issues  of  concern  as  well  as  providing  guidelines  to 
administrators, government and social organisations in the third sector. 

is 

body 

called  Welfare  Watch 

website: 
The 
http://www.velferdarraduneyti.is/velferdarvaktin).  It  is  based  at  the  Ministry  of  Social  Affairs 
(later the Ministry of Welfare) and composed of representatives from government (ministries and 
institutes), municipalities, social organisations and unions. Various subgroups were also formed 
with the aim of focusing on special areas of concern. It was thus primarily a consultative body 
with powers to issue guidelines and have influence on detailed policy decisions. 

(WW  — 

see 

The WW has been quite active. It has commissioned reports and assessments of various policy 
areas,  sent  out  recommendations  to  targeted  actors  and  reported  regularly  to  government.  The 
WW has focused mainly on the following: 

•  Welfare of children 

•  Problems of young individuals, aged 16-25 

•  Employment issues and job search 

•  Rationalisation  measures  of  municipalities  (esp.  related  to  provision  of  welfare  to  the  most 

needy — concerning the last stop in the welfare system) 

•  Social services of local communities 

• 

Issues  of  disabled  pensioners  (a  group  traditionally  subject  to  financial  hardship  and  social 
exclusion) 

•  Position of the elderly 

• 

Issues concerning immigrants 

Welfare  Watch  has  been  an  important  and  interesting  innovation  to  emerge  during  the  crisis, 
directly addressing crisis-related issues. Iceland has a tradition of allowing grassroots voices to be 
heard and one of WW’s valuable roles has been to channel these voices into bigger awareness-
raising movements, with pressure to get issues of local importance aired more generally.  

BMS (Bedarfsorientierte Mindestsicherung) in Austria 

The BMS, a nationwide means-tested minimum income scheme, replaced former Austrian social 
assistance programmes on 1 September 2010. Its aim is to prevent social exclusion and poverty, 
strengthen support for those returning to work and to harmonise to a certain degree the various 
social  assistance  programmes  of  the  Länder.  Today,  the  nine  Länder  define  minimum  income 
schemes according to the BMS, which may, however, be supplemented by additional regionally 
defined benefits. The Länder are responsible for the administration and financing of the scheme. 

In 2012, the gross social assistance rate (including a basic housing subsidy of 25 %) for a couple 
in Vienna was €1 159.88, a slight increase from 2011 when it was €1 129.42. The BMS functions 
as  a  social  protection  scheme  of  last  resort,  based  on  ‘help  for  self-help’.  It  focuses  on  getting 
people back into employment by granting a  minimum income, social services  and job training. 
The  city  of  Vienna’s  Step2Job  project  is  a  good  example  of  an  integrated  activation  approach. 
Designed  as  a  case  management  project,  BMS  recipients  receive  personalised  qualification 
measures  or  in-job  training  alongside  psychological,  social  and  indebtedness  advisory  services. 
Internships are also available, set up especially for BMS recipients, during which job coaching is 

109   Stefan Ollafson (2012). Iceland’s way out of the crisis, Social protection, redistribution, stimulus, and austerity, A 

study of national policies. Available at: www.peer-review-social-inclusion.eu. 

48 

 
 
                                                 
available. There are German language courses for BMS recipients with a migrant background. 

Conditionality  is  tight.  To  be  eligible  for  the  minimum  income,  Austrian  citizenship  or  equal 
status on grounds of EU law is required, or refugee status under the Geneva Convention. There is 
strict means-testing and recipients are regularly checked for their willingness and ability to work. 
Employment and social agencies have started sharing data on recipients to make checking faster 
and more efficient. Recipients are obliged to accept job offers; otherwise, their benefits may be 
partially  or  —  in  exceptional  cases  —  fully  withdrawn.  Sanctions  should  prevent  long-term 
dependence on social welfare, which reduces earnings over a lifetime and affects pensions. 

5.4.  Budgetary effects of active inclusion strategies 

There is no specific financial data on active inclusion strategies implemented at Member 
State level. Spending on social assistance rose in the first years of the crisis as part of a 
stimulus  of  the  overall  economy  (including  the  increase  in  the  number  of  social 
assistance recipients). From 2010, with the deepening of the sovereign debt crises and in 
the  framework  of  the  exit  strategies  from  the  temporary  measures  taken  since  2008, 
Member States reduced spending and pursued a more stringent fiscal policy. 

Spending  on  social  protection  varies  across  Member  States  (see  Chart  10).  It  is  lowest 
relative to GDP in Member States such as LV, RO and BG (around 17 % in 2010), and 
highest  in  DK,  FR  and  NL  (above  32 %  in  2010).  At  EU  level,  social  protection 
expenditure reached slightly less than 30 % of GDP. All EU-15 countries except for LU 
spent at least 25 % of their GDP on social protection in 2010 (ES slightly more than 25 % 
of  GDP,  followed  by  PT,  UK  and  EL).  All  EU-12  countries  spent  less  than  this.  The 
highest spending was recorded in DK, FR, DE and NL. 

Chart  10:  Social  protection  expenditure  as  share  of  GDP  in  EU  Member  States 
(2010, percentage of GDP) 

Source: ESSPROS 

A  further  examination  (see  Chart  11)  of  expenditure  by  function  shows  that  most 
spending  on  social  protection  is  not  necessarily  linked  to  active  inclusion  and  goes 
namely  on  invalidity  allowances,  old  age  and  survivors’  pensions,  and  certain  parts  of 
sickness/healthcare benefits). 

49 

 
 
 
 
 
 
 
Chart 11: Social protection expenditure by function (2010, percentage of GDP) 

Source: ESSPROS 

Evidence  on  the  effectiveness  of  active  inclusion  strategies  requires  further  analysis 
based  on  adequate,  up-to-date  data.  A  recent  evaluation  of  the  French  RSA  shows  a 
minor improvement in terms of poverty reduction: 78, 000 households have risen above 
the threshold of low income (due to the ‘active’ RSA), that is, 145 000 persons or 0.2 % 
of  those  on  low  incomes.110  This  seemingly  modest  impact  was  achieved  against  the 
backdrop of the economic crisis. An examination of the impact of the Hartz reforms in 
Germany  on  benefit  dependency  suggests  there  has  been  no  significant  change  in 
‘structural’  dependence  on  state  support,  i.e.  that  the  prospects  of  recipients  did  not 
improve with the reforms.111  

The  results  of  a  recent  EUROFOUND  report  on  the  active  inclusion  of  young  people 
with  disabilities  and  health  problems112  underline  that  much  needs  to  be  improved  to 
achieve an effective and tailored implementation of active inclusion strategies. It reports 
an increase in the take-up of disability benefits, debt as a risk factor, the negative impact 
of increasing work intensity for this specific group, as well as the absence of pathways 
from education to the labour market and social inclusion. 

6.  COORDINATING  EUROPEAN  SOCIAL  POLICIES:  THE  ROLE  OF  THE  EUROPEAN 

UNION IN PROMOTING THE ACTIVE INCLUSION STRATEGY 

The European Commission has been working closely with Member States, in the context 
of the Social Protection Committee and its Indicators Subgroup, on identifying the most 
appropriate indicators for assessing the country-specific challenges and progress related 

110   Based on the SPC multilateral thematic surveillance on active inclusion (27 February 2012). 

111   Konigs, S. (2012): The dynamics of social assistance receipt in Germany, OECD country study for the 

European Commission. 

112   See at http://www.eurofound.europa.eu/areas/socialcohesion/illnessdisabilityyoung.htm. . 

50 

 
 
                                                 
to the implementation of the active inclusion strategy and its evaluation in the context of 
the European Semester. As outlined in the analysis above, for some aspects there is a lack 
of up to date, harmonised and cross-country comparable data. Work is ongoing both in 
terms of further improving the set of indicators used to monitor the strategy and on data 
collection to make more data available. 
According  to  the  Commission’s  proposal  on  instruments113  for  cohesion  policy  for  the 
next  programming  period  (2014-2020),  the  European  Social  Fund  would  step  up  its 
support for social inclusion policies, including active inclusion. In line with the Europe 
2020 strategy of reducing poverty by 20 million people by 2020, it proposes that: 

•  at  least  25  per  cent  of  the  cohesion  policy  envelope  be  dedicated  to  ESF 

investments 

•  at least 20 per cent of all national ESF allocations be earmarked to support social 

inclusion policies. 

Accordingly,  in  the  2014-2020  financing  period,  active  inclusion  will  be  one  of  the 
investment  priorities  of  the  ESF  with  the  objective  of  promoting  social  inclusion  and 
combating  poverty.  In  order  to  ensure  that  the  co-financed  programmes  succeed  in 
promoting  active  inclusion,  funding  will  be  conditional  on  putting  in  place  national 
strategies  for  poverty  reduction.  Such  strategies  should  aim  at  the  active  inclusion  of 
people excluded from the labour market. More specifically, it is required that the national 
active inclusion strategy is in accordance with the poverty and social exclusion target of 
the  country  concerned,  involves  the  relevant  stakeholders  and  provides  a  sufficient 
evidence base to monitor developments. 

If the fund’s interventions are to be successful, they will need to be underpinned by an 
integrated  response,  addressing  the  different  needs  of  the  specific  target  groups  facing 
labour  market  exclusion.  In  this  respect,  it  will  be  necessary  to  put  in  place  (i)  a 
combination  of  tailor-made  support  measures  to  improve  the  employability  of  the 
individual, (ii) initiatives to help the individual to access different services necessary for 
re-integration and (iii) better functioning social and unemployment benefit systems and 
minimum income and pension schemes that provide adequate and incentivising support 
in  a  cost-effective  manner.  The  actions  of  the  European  Social  Fund  can  be 
complemented  by  the  European  Regional  Development  Fund  with  investment  in 
childcare infrastructure, education infrastructure, healthcare infrastructure, long term care 
services and housing to provide better access to services for the most disadvantaged.114 

113   COM(2011) 615 final: Proposal for a Regulation of the European Parliament and of the Council laying 
down common provisions on the European Regional Development Fund, the European Social Fund, 
the  Cohesion  Fund,  the  European  Agricultural  Fund  for  Rural  Development  and  the  European 
Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general 
provisions on the European Regional Development Fund, the European Social Fund and the Cohesion 
Fund  and  repealing  Council  Regulation  (EC)  No  1083/2006;  and  COM(2011)  607:  Proposal  for  a 
Regulation of the European Parliament and of the Council on the European Social Fund and repealing 
Council Regulation (EC) No 1081/2006. 

114   See European Commission Staff Working Document - Social Investment through the European Social 

Fund, SWD(2013)44. 

51 

 
 
                                                 
6.1.  On-going monitoring and evaluation through the Europe 2020 Strategy 

Member  States  continue  to  state  their  commitment  to  fighting  social  exclusion  and 
poverty in their 2012 National Reform Programmes (NRPs). All of them mention policy 
measures from the active inclusion strategy. However, these are not always identified as 
such. Compared to 2011,115 the NRPs, in general, do not reflect the integrated nature of 
the strategies. 

FI,  UK,  FR,  CY,  DK,  EE,  DE,  IT,  LT,  NL,  PL,  RO,  SK,  ES,  SE,  LV  and  CZ  do  not 
explicitly mention the concept of active inclusion in their 2012 NRPs. HU, LU, PT, AT, 
BE,  BG,  EL,  IE  and  MT  explicitly  mention  it.  However  none  of  the  latter  set  gives  a 
definition of its active inclusion strategy or elaborates on its content. 

The nine countries explicitly mentioning the concept of active inclusion can be located 
on a continuum indicating different degrees of engagement with the strategy. 

Some countries mention active inclusion, but there is no evidence of actual policy behind 
it. BG, for example, only lists ‘active inclusion’ in the Annex of its NRP in relation to a 
Country Specific Recommendation on labour market reform. 

HU  describes  active  inclusion  as  a  policy  separate  from  policies  to  improve  access  to 
services, suggesting incomplete understanding of the strategy, which has not been fully 
applied. Active inclusion initiatives in EL narrowly focus on providing basic services and 
creating ‘safety nets’. 

At the other end of the continuum are countries that give specific examples of how the 
concept  translates  into  concrete  policy.  Examples  are  the  Flemish  w²  work-welfare 
programme  to  foster  job  seekers  from  vulnerable  groups  by  strengthening  coordination 
between  policy  domains  (social  economy,  work  and  welfare),  and  public  employment 
services (PES) plus social assistance services. AT defines active inclusion as a guiding 
principle  for  inclusion  policies  (there  is  evidence  that  the  recent  reform  of  the  social 
protection system116 has many elements of the active inclusion strategy). 

LU, on the other hand, focuses on labour market activation approaches. IE is keeping up 
efforts to develop the one-shop model (‘National Employment and Entitlements Service’) 
to cut the administrative costs of services for both client and provider. 

FR  and  the  UK  are  among  those  that  do  not  refer  to  the  concept  of  active  inclusion  in 
their  NRPs,  despite  having  reformed  their  social  protection  systems  and  modernised 
employment  policies 
the  2008 
Recommendation. 

in  accordance  with  some  of 

the  elements 

in 

In terms of the National Social Reports (NSRs) twelve Member States (out of the total of 
twenty one that submitted a report by late 2012)117 do not mention the concept of active 
inclusion  (AT,  DK,  EL,  FR,  HU,  LV,  NL,  PL,  RO,  SI,  SK,  UK).  Nine  Member  States 
mention the concept of active inclusion explicitly in their NSRs (BE, BG, CY, CZ, ES, 
FI, LU, MT, PT). Countries mentioning active inclusion in their NRPs do not necessarily 
overlap with countries mentioning it in NSRs (namely CY, FI, CZ). 

115   EU  Network  of  Independent  Experts  on  Social  Inclusion.  (2011).  Assessment  of  progress  towards  the 
Europe  2020  social  inclusion  objectives,  Synthesis  Report.  Available  at:  www.peer-review-social-
inclusion.eu. 

116   See section 5.3 of this paper. 

117   See: http://ec.europa.eu/social/main.jsp?catId=758&langId=en.  

52 

 
                                                 
Member  States  mentioning  the  concept  of  active  inclusion  differ  in  the  kinds  of  active 
inclusion  initiatives  they  prioritise.  The  Belgium  NSR  presents  a  number  of  active 
inclusion-related  measures  focusing  on  changes  in  the  tax  and  child  benefit  system  to 
counter  in-work  poverty.  For  2013,  it  is  planned  to  raise  the  tax-exempted  income  of 
low- and middle income persons by € 200. Additionally, the Brussels Capital Region has 
set up a plan to improve the integration of migrants (‘Anti-Discrimination and Diversity 
Plan’) and a Roma Strategy. Belgium is tackling the adequacy of social benefits through 
a linking of the social benefits to the development of the general standards of living 
(‘well-being envelope’). Since 2008, single parent households have been granted higher 
child allowance and since 2010 they also have practically free healthcare.  

LU’s  comprehensive  policy  includes  higher  investment  in  the  quality  of  the  pre-school 
system,  in  children  and  parent  pre-school  learning.  Moreover,  it  focuses  on  targeted 
policies  to  reduce  the  number  of  young  NEETs  by  expanding  the  capacity  of  the 
‘Voluntary Guidance Program’ which is to be evaluated through a qualitative study this 
year. Additionally, information centres for minimum income recipients are planned and 
since  2011,  more  funding  has  been  allocated  to  social  aid  and  a  strategy  against 
homelessness and social exclusion has been developed.  

The Spanish NSR refers explicitly to the active inclusion recommendation and states that 
active  inclusion  is  the  intellectual  framework  within  which  Spain’s  NRP  objectives  are 
defined  since  the  2011  NRP.  The  social  inclusion  measures  are  structured  around  the 
three pillars of active inclusion with a long list of initiatives, including the combination 
of income support with ALMPs. 

FI  describes  active  inclusion  as  a  ‘major  challenge  and  future  priority’  pointing  to  the 
importance of enhancing employment and income security, well-being and health issues. 
However, few concrete active inclusion initiatives can be identified in its NSR.  

PT,  LU  and  CZ  explicitly  refer  to  the  importance  of  an  integrated  active  inclusion 
strategy. However, in the PT and particularly in the CZ case, where reforms of the social 
benefit  system  have  not  been  aligned  with  ALMPs  targeting  the  unemployed,  there  is 
little evidence that policies are actually interlinked. 

the  most  disadvantaged  have  concentrated  on 

Various  active  inclusion-related  measures  can  be  found  in  the  NSRs  of  those  Member 
States that do not explicitly refer to the concept of active inclusion. NL presents a wide 
range  of  original  measures  across  the  three  pillars.  Efforts  to  promote  labour  market 
improving 
participation  among 
coordination between employers, municipalities and sheltered employment organisations, 
using social return investments and providing support to lone-parents by exempting them 
from the obligation to work until the child reaches the age of five. Since January 2012, 
the government has been able to check on whether municipalities comply with the new 
regulations  entailed  in  the  Work  and  Social  Assistance  Act  (WWB).  Since  February 
2012,  municipalities  have  had  a  legal  obligation  to  provide  debt  counselling. 
Additionally,  the  2008  ‘Municipal  Compass’  programme  addressing  homelessness  has 
been  expanded  to  more  municipalities.  Finally,  investments  have  been  increased  to 
enhance  the  quality  of  pre-school  education  through  smaller  pre-school  groups  and 
better-qualified personnel. 

The  concept  of  active  inclusion  is  not  mentioned  in  the  Austrian  NSR,  however,  the 
‘Bedarfsorientierte  Mindestsicherung(BMS)’  seems  quite  close  to  the  idea  of  active 
inclusion.  Since  its  start,  more  than  29000  BMS  recipients  have  found  a  job.  A  study 
about the employment careers of BMS recipients reveals also that after 9 months one out 
of four persons were considered as integrated into the labour market and noted a decrease 
from 89 % to 70 % of those recipients which have no income sources other than the BMS. 

53 

 
The French NSR announces efforts to fight in-work poverty, promote the social economy 
and the ‘Work in Station’ programme targeting the homeless, a follow up initiative to the 
2009 ‘Hope in Station’ programme.  

The UK presents its new ‘Work Programme’ offering a more personalised job coaching 
system  bound  to  tighter  conditionality.  Furthermore,  the  ‘Youth  Contract’  will  offer  a 
voluntary work experience place for every unemployed 18-24 year old who wants one to 
give them real, valuable experience of work. It will also offer 160,000 Wage Incentives 
for  employers  who  recruit  an  18-24  year  old  from  the  Work  Programme  and  at  least 
20,000 extra incentive payments for small employers to take on apprentices aged 16-24.  

BG  presents  policy  reforms  targeting  the  employability  of  the  unemployed  through 
expanded training and education programs. It further refers to the 2012 approval by the 
Council  of  Ministers  of  a  National  Concept  for  the  Social  Economy.  HU’s  objectives 
focus  on  activating  the  labour  market  and  boosting  the  employability  of  the  long-term 
unemployed through subsidies for employers and public employment programmes.  

Active  inclusion  was  a  priority  in  the  monitoring  of  key  policies  during  the  European 
Semester within the Europe 2020 Strategy. In June 2012, the European Council adopted 
Country  Specific  Recommendations  directly relevant  to  the  Recommendation  on  active 
inclusion for AT, CZ, DE, HU, IT, SK, UK, MT, PL. 

Some  CSRs  called  for  income  support  to  be  made  more  efficient  to  protect  against 
poverty (LV, BG). 

Many addressed the issue of the inclusive labour market, by: 

•  combating labour market segmentation and in-work poverty (PL), 

• 

tackling work disincentives for workers on low income, including women and the 
elderly (AT, BE, DE, NL), 

•  strengthening the activation capacity of public employment services, stepping up 
efforts  related  to  long  term  unemployed,  jobless  households  or  disadvantaged 
groups (DE, HU, UK), 

•  boosting the activating capacity of public work schemes (HU), 

•  better targeting subsidised employment (DK), 

• 

improving the labour market position of the long term unemployed (FI) and those 
with a migrant background (DK). 

The focus of CSRs related to services has been on quality, availability and affordability 
of childcare (AT, CZ, DE, HU, IT, PL, MT, SK, UK). The UK’s CSR specifically 
mentioned affordable housing. 

Other CSRs mention integrated approaches, calling for links between social assistance 
reform and activation measures to be strengthened (LT). 

6.2.  Other relevant initiatives 

The  European  Platform  against  Poverty  and  Social  Exclusion  has  called  for  social 
objectives to be mainstreamed into sectoral policies. The Commission has adopted a 
Recommendation on rights to basic bank account.118. Furthermore, the Commission is 

118   See: http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2011/c_2011_4977_en.pdf. 

54 

 
 
                                                 
working on a legislative package on bank accounts. This initiative, which is part of the 
Commission’s 2013 Work programme and has also been announced in the Single Market 
Act  II  (key  action  12),  aims  to  (1)  facilitate  access  for  every  consumer  to  payment 
accounts with basic features in the Union for free or at a reasonable charge, (2) enhance 
transparency  and  comparability  of  bank  fees  by  developing  common  tools  allowing 
consumers to compare and choose the best product for their needs, and (3) facilitate bank 
account switching both at national level and at cross-border level.  
The new directive on energy efficiency119 also takes into account the specific needs of 
disadvantaged groups by giving new rights to consumers as regards access to information 
from metering and billing of individual energy consumption and by encouraging Member 
States to include socially-oriented requirements in their national schemes, to ensure that 
vulnerable customers can reap the benefits of higher energy efficiency. 

The Commission has also proposed the creation of a Fund for European Aid to the most 
Deprived,120 with a total budget of € 2.5 billion (October 2012). The Fund would support 
Member  State  schemes  providing  food  to  the  most  deprived  and  clothing  and  other 
essential goods to homeless people and materially-deprived children. 

Social entrepreneurship, and more broadly the social economy, is an important element 
the  highly  competitive  social  market  economy.121  Social  businesses  are 
of 
demonstrating  resilience  to  the  crisis  and  the  capacity  to  generate  sustainable 
employment for disadvantaged people. Their promotion was one of the levers of the first 
Single  Market  Act  (SMA)122  and  remains  a  priority  in  SMA  II.123  The  Commission’s 
‘Social Business Initiative’124 which followed the SMA, set out a comprehensive strategy 
to  develop  a  favourable  environment  for  social  entrepreneurship  including  measures  to 
improve access to finance, visibility and awareness-raising, as well as a more appropriate 
regulatory  framework.  Given  that  a  proactive  involvement  of  workers  in  their 
companies  has  a  strong  impact  on  their  societal  responsibility  and  productivity,  the 
Commission  will  also  focus  its  attention  on  the  issue  of  cooperatives  and  employee 
share-ownership. 

Several Member States contribute significantly to supporting the further development of 
social  enterprises  and  the  social  economy  in  general  through  specific  legislation  (ES, 
FIN, PT), national strategies (BG, UK, RO) or statistics (FR, ES, PT). 

119   Directive 2012/27/EU of the European Parliament and of the Council on energy efficiency, amending 

Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC. 

120   Proposal  for  a  Regulation of  the  European Parliament  and  of  the  Council  on  the  Fund for  European 

Aid to the Most Deprived, COM(2012) 617 final. 

121   See  the  section  on  social  economy  in  European  Commission  Staff  Working  Document  -  Social 

Investment through the European Social Fund, SWD(2013) 44.. 

122   COM(2011) 206 final ‘Single Market Act’ See: 

http://ec.europa.eu/internal_market/smact/index_en.htm. 

123   COM(2012) 573 final ‘Single Market Act II’. 

124   COM(2011)  682  final  ‘Creating  a  favourable  climate  for  social  enterprises,  key  stakeholders  in  the 

social economy and innovation’. 

55 

 
 
                                                 
7.  FOLLOW-UP 

7.1.1.  Follow-up at national level 

•  Safeguard the integrated approach, building on all three pillars of the active 
inclusion strategy, without unduly prioritising any of them. In a context of strict 
austerity,  Member  States  might  be  tempted  to  focus  on  measures  such  as 
activation  (less  costly)  over  providing  an  adequate  livelihood  (more  costly). 
However,  the  fight  against  poverty  and  providing  long-term,  sustainable,  stable 
employment opportunities and growth can only be effective if all three pillars are 
taken into consideration. An integrated active inclusion strategy can also prevent 
people from losing their accumulated human capital. 

•  Mainstream the active inclusion strategy in the monitoring and evaluation of 
National Reform Programmes in the area of social inclusion. Active inclusion 
contains the mix of policy interventions needed to fight poverty successfully. To 
improve monitoring and evaluation, Member States could report on the way they 
have implemented the strategies in their NSRs. 

•  Roll  out  local  active  inclusion  pilot  projects  at  national  level.  There  is 
evidence of successful active inclusion strategies at local level. Moreover, social 
experimentation125  can  help  test  policies  at  local  level,  and  if  successful,  these 
can be rolled out nationally. Bottom-up implementation would be of benefit and 
guarantee effectiveness. 

•  Focus  on  household  characteristics  as  potential  drivers  of  effective  social 
policy. The period since the adoption of the recommendation on active inclusion 
has been instrumental in identifying the major challenges facing active inclusion. 
Now it is time to move towards understanding the deeper causes of the problems. 
A  better  understanding  of  the  institutional  environment  that  shapes  labour 
market  and  social  policies  for  disadvantaged  groups  can  help  in  designing 
appropriate  policies.  Tailored  support  for  the  disadvantaged  through  more 
childcare for families, especially single parents, better access to services, with due 
consideration  for  the  specific  needs  of  the  low  skilled,  long-term  unemployed, 
disabled, migrants, the homeless, the elderly, and the Roma community, can 
help active inclusion strategies to succeed. 

•  Engage relevant actors more vigorously in the development, implementation, 
and assessment of policies. Active inclusion is a joint responsibility in European 
societies.  Efforts  to  engage  the  relevant  actors  need  a  boost.  The  actors  include 
those  affected  by  poverty  and  social  exclusion,  civil  society  organisations,  non-
governmental  organisations,  local  administrations  and  the  private  sector.  They 
should  get  involved  in  designing  strategies  that  help  those  furthest  from  the 
labour  market  to  get  jobs,  thus  bringing  valuable  human  capital  to  national 
economies.   

7.1.2.  Follow-up at European level 

125   The Commission has recently endorsed and decided to support projects that use social experimentation 
to  implement  innovative  policies  through  the  PROGRESS  programme.  See:  Call  for  Proposals  for 
Social Policy Experimentations (VP/2012/007). 

56 

 
 
                                                 
•  Provide 

explicit,  policy-oriented, 

evidence-based  monitoring126  and 
guidance127  to  Member  States  to  ensure  better  implementation  of  the  active 
inclusion  strategy  at  national  level.  The  2008  Commission  recommendation  has 
been  interpreted  in  a  variety  of  ways,  and  this  has  led  to  piecemeal 
implementation of the strategy, reducing its potential to make a difference. 

•  Further develop active inclusion indicators in the Social Protection Committee, 
Indicators  Sub-Group.  The  work  on  indicators  for  access  to  quality  services 
should be further developed. The most relevant indicators, those on healthcare, 
child care, and access to quality housing can be fine-tuned in collaboration with 
other  policy  initiatives  in  subfields  such  as  the  child  poverty  recommendation, 
development  of  a  strategy  on  homelessness  (2013  onwards),  etc.  Work  should 
also focus on coverage of benefits and services. 

•  Mainstream the active inclusion strategy in the monitoring and evaluation of 
Europe 2020 headline targets in the area of social inclusion. Active inclusion 
contains  the  mix  of  policy  interventions  needed  to  fight  poverty  successfully. 
Progress  towards  achieving  the  targets  can  be  better  achieved  through  active 
inclusion.  In  this  context,  support  for  active  inclusion  in  the  next  multiannual 
financial framework is essential. 

•  Strengthen  administrative  capacity  and  policy  coordination  of  the  three 
pillars  through  targeted  support  (e.g.  with  ESF  funds).  The  report  suggests 
that  many  countries  face  challenges  when  it  comes  to  implementing  integrated 
active  inclusion  strategies.  These  difficulties  often  arise  from  a  lack  of 
administrative  capacity,  or  a  lack  of  vertical  and  horizontal  coordination  of  the 
three pillars. 

126   Social Protection Performance Monitor, Council of the European Union, 13723/12. 

127   The Commission plans to develop an analysis for each individual country that would map the policy 
areas most in need of help if they are to deliver effective integrated active inclusion. These analyses 
could  be  used  to  justify  ESF  support  on  specific  aspects  of  administrative  capacity  building  or  to 
highlight the need for streamlining to provide one-stop shops. . 

57 

 
                                                 
8.  ANNEX 

Table  1.  1st  pillar:  first  level  of  safety  nets.  Main  characteristics  of  the  unemployment 
benefit systems 

Coverage rate in % (1)

3 months

4-6 
months

7-12 
months

Total

Net 
replacement 
rates
in % (2)

Max 
duration 
of UB 
in months 
(3)

Unemployment trap 
(2)

Single

Second 
earner

At-risk 
poverty 
rate - 
unempl. 
In %(4)

Group A

Group B

Group C

Group D

Group E

EU27
AT
CY
CZ
FR
NL
SE
SI
BE
DE
DK
FI
UK
IE
HU
BG
IT
MT
PL
RO
EE
EL
ES
LT
LV
PT
SK
LU

65.5
88.5

na

na

63.7
68.6
82.2

74.3
75.0
89.5

u

na

61.7
85.7

64.2
69.8
78.7

27.2
73.1
86.5
88.3

50.2
62.3

37.3
67.3
29.3

23.0
93.7
84.1
91.8

53.5 na
71.3

na

na

47.1
68.0
42.1

28.5
89.0
84.8
91.4

21.0

35.0

40.8

38.6

na

na

na

na

68.4
31.2
75.7
32.1
36.7

61.7
56.2
64.8

53.3
48.2
49.6
63.9

na

65.8
26.5
66.5
60.7
31.7
60.5
50.0
50.8
69.5

na

na

53.6
36.1
40.6
56.1

55.5
15.9
25.9
39.6
18.4
22.8
44.8
19.4
51.4

36.8
43.8
25.6
48.4

na

59.4
18.9
33.9
41.7
23.3
29.1
47.5
31.2
55.5

40.7
42.6
29.5
52.7

na

na

na

63.4

56.2
58.4
72.2
64.9
64.7
66.2 na
61.5
71.4
69.4
61.1
82.5
37.7
42.1
9.1
56.6
46.5
28.2
41.4
24.7
47.7
62.6
43.3
58.8
40.1
72.0

12.0
5.0
12.0
36.0
60.0
20.0
24.0

18.0
48.0
17.0
6.0
13.0
9.0
12.0
10.0
5.0
12.0
12.0
12.0
12.0
24.0
9.0
9.0
30.0
6.0
12.0

0.67

0.83

0.80
0.77
0.84
0.75
0.83
0.93
0.75
0.89
0.72
0.50
0.78
0.82
0.81
0.78
0.59
0.82
0.71
0.63
0.61
0.83
0.70
0.90
0.79
0.68
0.86

0.77
0.73
0.85
0.88
0.82
0.79
0.78
0.94
0.93
0.52
0.92
0.82
0.81
0.73
0.66
0.72
0.67
0.57
0.75
0.77
0.97
0.90
0.78
0.58
1.00

45.0
41.2
39.7
40.6
33.5
31.8
36.3
44.1
30.4
70.3
36.3
45.3
47.4
26.8
44.8
48.4
43.6
40.1
45.4
45.4
46.7
38.5
38.7
55.6
47.9
36.4
41.1
43.3

(1) EU-SILC Social Situation Observatory calculation for DG EMPL 
(2) OECD Tax benefit Model 
(3) MISSOC Database 
(4) Eurostat, EU SILC 
(5) Eurostat, LMP database 

58 

 
 
 
 
Table  2:  1st  pillar:  second  level  of  safety  nets:  Main  characteristics  of  other  safety  nets 
available to people on low income (social assistance, housing benefits, etc.) 

COVERAGE
% of people receiving any benefit
 including unemployment benefits (1)

ADEQUACY
Net income of people living on social 
assistance relative to the median 
equivalised income (incl. cash housing 
assistance) (2)

Financial DISINCENTIVE
Inactivity trap (2)

Group A

Group B

Group C

Group D

Group E

3 months

4-6 months 7-12 months

Total

90.7

88.2

70.6

77.4

72.9
77.5

86.8
76.5
89.5

u

69.2
81.0

62.0
76.2
87.4
90.3

56.0
84.9

69.6
95.4
89.8
94.3

61.2
83.4

68.7
90.9
89.4
93.5

37.2

48.6

70.1

63.8

73.7
43.0
79.0
72.8
45.5
71.1
67.8
58.7
67.1

63.0
49.4
63.0
81.7
71.3

76.7
34.5
69.3
83.6
40.9
71.0
59.0
60.3
72.3

62.9
38.4
51.3
63.4
68.7

66.4
35.9
33.6
70.2
30.2
54.2
48.6
42.9
56.5

47.9
54.0
55.6
73.0
63.3

69.8
36.1
40.6
72.3
34.2
57.2
52.9
49.1
60.0

51.3
50.7
55.1
71.7
64.9

AT
CY
CZ
FR
NL
SE
SI
BE
DE
DK
FI
UK
IE
HU
BG
IT
MT
PL
RO
EE
EL
ES
LT
LV
PT
SK
LU
EU27

single 
person

lone parent 
with 2 
children

Second 
earner

Single

One earner couple 
with 2 children

49

50
41
74
56
30
45
47
71
57
66
77
31
14

59
31
17
32
0
35
27
36
26
23
51

50

45
42
64
48
53
55
60
73
56
76
71
39
26

54
41
27
34
9
33
77
50
42
33
54

46

42
36
52
43
44
39
53
71
50
65
70
29
22

44
33
26
31
2
25
56
46
43
30
51

0.65

0.62
0.61
0.82
0.70
0.60
0.67
0.66
0.87
0.69
0.50
0.79
0.50
0.38
0.24
0.59
0.51
0.37
0.46
0.06
0.45
0.44
0.59
0.36
0.40
0.70

0.83

0.77
0.68
0.82
0.88
0.82
0.67
0.78
0.96
0.93
0.52
0.92
0.48
0.58
0.00
0.67
0.57
0.43
0.57
0.04
0.48
0.92
0.90
0.71
0.58
0.86

(1) EU-SILC Social Situation Observatory calculation for DG EMPL; Benefits include: sickness, disability and social exclusion 
benefits and education allowances 
(2) OECD Tax benefit Model 

59 

 
 
 
 
Table 3: 2nd pillar: Main characteristics linked to the inclusiveness of the labour market 

Net income of full 
time minimum 
wage earner

91.0
107.5

131.3

77.0

108.3

128.9
125.0

84.5

88.8

69.1
102.8
91.7

105.4
83.0
87.0

Involuntary part-time 
employment as 
percentage of the total 
part-time employment 
(1)
26.1
18.5
30.8
49.4
7.2
10.1
8
27.5
10.4
16.1
17
28.8
18.9
37.7
57.6
54.5
39.4
16.1
24.8
53
22
60.5
55.5
42.1
37.4
45.8
24.4
9.9

Transitions from 
temporary to 
permanent 
employment (2)

Transitions in/out of poverty (2)

Low-wage trap

into poverty (%)

 out of poverty (%)

Single

Second earner

25.9
37
10.6
22.1
20
40.5
31.8
43.9
36.1

41
48.7
72.1

36.7
25
39.2
10
22.4
61
17.2
18
16.4
35.3
46.3
29.6
39.9
26

2.8
5.6
4.3
2.3
5.3
2.8

4.4
3.4

3.8
7.4
5.8
7.4
6.2
5.3
8.1

6.5
7.9
8.8
8.7
7.0

3.5

40.5
45.6
43.0
36.2
49.9
31.1

38.8
38.9

38.1
51.8
40.2
36.6
33.6
40.9
32.1

33.1
31.6
43.6
32.5
33.6

29.0

0.44

0.44

0.32
0.33
0.23
0.30
0.30
0.54919226
0.52
0.47
0.35
0.31
0.23
0.20890136
0.42
0.27
0.32
0.52
0.35
0.41
0.16
0.29
0.39
0.26
0.30
0.29
0.39

0.53
0.33
0.34
0.38
0.13
0.476741272
0.29
0.73
0.22
0.90
0.23
0.208901359
0.95
0.93
1.07
0.85
0.11
0.99
0.16
0.06
0.39
0.62
0.33
0.61
0.54

Activation-Support 
(LMP participants per 
100 persons wanting 
to work) 2010 ex UK 
(5)
:
9.9
45.1
19
45.4
28
15.9
26.9
95.5
50.7
30
26.7
1.5
25.7
4.1
21.4
20.3
6.9
20.1
3.2
3.8
12.4
47.6
8.5
4.7
28.7
21.2
62.4

Expenditure on ALMP 
(services and 2-7) as 
% of GDP  (5)

:
0.2
0.8
0.2
0.8
0.7
0.3
0.8
1.3
1.4
0.6
0.9
0
0.8
0.1
0.4
0.5
0
0.6
0
0.1
0.2
0.7
0.5
0.2
0.6
0.2
0.4

Group B

Group A

EU27
CZ
FR
CY
NL
AT
SI
SE
BE
DK
DE
FI
UK
Group C IE
BG
IT
HU
MT
PL
RO
EE
EL
ES
LV
LT
PT
SK
LU

Group D

Group E

(1) Eurostat LFS Survey 
(2) Eurostat EU SILC Survey DG EMPL calculation 
(3) OECD Tax benefit Model 
(4)  OECD  Tax  benefit  Model  —  Median  net  household  incomes  are  before  housing  costs  (or  other  forms  of  ‘committed’ 
expenditure). Results are shown on an equivalised basis and account for all relevant cash benefits (social assistance, family benefits, 
housing-related cash support as indicated). Income levels are net of any income taxes and social contributions and account for all cash 
benefit  entitlements  of  a  family  with  a  working-age  head  employed  full-time  at  the  minimum  wage.  Annual  minimum  wages  as 
reported on OECD.stat. Calculations for families with children assume two children aged 4 and 6 and neither childcare benefits nor 
childcare costs are considered. Poverty threshold set at 60 % of the national median income. 

(5) LMP database 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 4: 3rd pillar: indicators of access to services 

Use of formal 
childcare more 
than 30 hrs/week, 
children less than 
3 (1)
14

EU27

Group A

Group B

Group C

Group D

Group E

CZ

FR

CY

NL

AT

SI

SE

BE

DK

DE

FI

UK

IE

HU

BG

IT

MT

PL

RO

EE

EL

ES

LV

LT

PT

SK

LU

0

26

13

6

3

33

33

19

68

13

20

4

8

8

6

16

4

2

3

19

5

18

15

11

32

3

19

(1) Source EU SILC 
(2) EU SILC 18-64 population 
(3) EU SILC 18-44 population 
(4) Source LFS 

Participation in 
education and 
training for low 
educated  
in % (4)
11
24.8
7.1
3.8
19.4
16.3
15.9
28.2
8.1
36.4
22
23.5
9.6
6.9
11.6
9.3
5.7
5.4
22.4
6.6
24.5
2.6
7.8
18.4
28.2
10.1
22.6
18.7

Housing cost 
overburden rate 
among AROP 
population(2)

Unmeet need for care  
(3)

40.4
44.9
25
11.2
51.3
31.4
25.8
47.4
43
79.8

20.3
60.9
28.5
43.7
18.5
31.1
12.6
37.6
23.4
34.1
72.4
46
41.4
38.2
30.7
37.4
27.2

4.3
1
5.9
7.8
0.8
2
0.2
4.1
2.3
3.7
4
3.4
1.8
2.3
2.8
22.7
7.2
1.5
7.5
7.5
6.3
5.6
0.4
23.7
1.4
3.7
2
1.7

61 

 
 
 
 
Table 5. Individual experts’ assessments of the extent to which an integrated 
comprehensive active inclusion strategy has been developed in their Member State (for 
those who can/ cannot work) 

DK, FI, 
FR, 
MT, 
NL, PL, 
SE 

EE, EL, 
IT, LT, 
LV 

Yes 

No 

Comprehensive policy 
design 
Some-
what 
AT, BE, 
BG, 
CY, 
CZ, 
DE, 
ES, 
HU, IE, 
LU, PT, 
RO, SI, 
SK, UK 
AT, 
BG, 
CY, 
CZ, 
DK, 
ES, FI, 
FR, 
HU, 
LU, 
MT, 
PT, 
RO, 
SK, UK 

BE, 
DE, 
EE, EL, 
IE, IT, 
LT, LV, 
PL, SE 

NL, SI 

For 
those 
who 
can 
work 

For 
those 
who 
cannot 
work 

Integrated implementation 

No 

Yes 

No 

Yes 

BE, 
DK, 
FR, 
MT, SI, 
SE 

LU, 
MT, SI 

Some-
what 

AT, 
BG, 
CY, 
CZ, 
DE, FI, 
HU, IE, 
LU, NL, 
PT, 
RO, UK 

AT, BE, 
CY, 
CZ, 
DK, FI, 
FR, 
HU, IT, 
NL, PT, 
RO, UK 

Vertical policy 
coordination 
Some-
what 
AT, ES, 
CY, 
CZ, 
DE, IE, 
IT, LV, 
MT, 
PL, 
RO, SI, 
SK, 
SE, UK 

No 

Yes 

Active participation of 
relevant actors 
Some-
what 
AT, 
CY, 
CZ, 
DE, 
FR, IT, 
LV, 
MT, 
PL, PT, 
RO, 
SK, UK 

BE, 
BG, 
DK, 
ES, FI, 
LU, NL, 
SI, SE 

EE, EL, 
HU, IE, 
LT 

EE, EL, 
ES, IT, 
LV, LT, 
PL, SK 

BE, 
DK, FI, 
LU, NL 

EE, EL, 
FR, 
HU, LT, 
PT 

BG, 
DE, 
EE, EL, 
ES, LV, 
LT, PL, 
SK, SE 

BE, 
DK, FI, 
LU, NL 

AT, 
CY, 
CZ, 
ES, IT, 
LV, 
MT, 
RO, 
SE, SI, 
SK, UK 

DE, 
EE, EL, 
FR, 
HU, IE, 
LT, PL, 
PT 

BE, 
CY, 
DK, FI, 
NL, SI 

AT, 
BG, 
CZ, 
ES, 
FR, IT, 
LU, LV, 
MT, 
PL, PT, 
RO, 
SE, 
SK, UK 

DE, 
EE, EL, 
HU, IE, 
LT 

Source:  EU  Network  of  Independent  Experts  on  Social  Inclusion  (Frazer,  H.  and  Marlier,  E. 
2012). Assessment of the implementation of the European Commission recommendation on active 
inclusion. 

62