COMMISSION STAFF WORKING DOCUMENT Accompanying the document Proposal for a COUNCIL RECOMMENDATION On adequate minimum income ensuring active inclusion
Date: 2022-09-28
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU employment policy, European social policy, integration into employment, labour market, marginalisation, poverty, social assistance, social integration, social security, subsistence level income

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.9.2022  SWD(2022) 313 final  COMMISSION STAFF WORKING DOCUMENT   Accompanying the document Proposal for a COUNCIL RECOMMENDATION  On adequate minimum income ensuring active inclusion         {COM(2022) 490 final}  
 
 
Table of Contents 
1. Policy context ............................................................................................................................................ 2 

2. Poverty trends and impact of social protection on income ...................................................................... 5 

3. Challenges related to the effectiveness of minimum income ................................................................ 11 

3.1 Challenges related to the adequacy of income support ................................................................... 11 

3.2 Challenges related to the coverage and take-up of minimum income ............................................ 24 

3.3 Challenges related to inclusive labour markets and social inclusion ................................................ 31 

3.4. Challenges related to effective access to enabling and essential services ...................................... 38 

3.5 Challenges related to governance mechanisms ............................................................................... 40 

4. Why should the EU act? .......................................................................................................................... 44 

5. The effect of hypothetical policy reforms on adequacy and coverage .................................................. 45 

5.1 Reform scenario 1: Increased adequacy to the 2/3 of the poverty threshold for current 
beneficiaries ............................................................................................................................................ 48 

5.2 Reform scenario 2: Increased adequacy to the 2/3 of the poverty threshold for current 
beneficiaries plus increased coverage by 10 percentage points ............................................................ 49 

5.3 Reform scenario 3: Increased adequacy to the 2/3 of the poverty threshold with full coverage 
(‘Extreme poverty elimination’) .............................................................................................................. 50 

5.4 Reform scenario 4: Increased adequacy to the poverty threshold for current beneficiaries .......... 51 

5.5 Reform scenario 5: Increased adequacy to the poverty threshold for current beneficiaries plus 
increased coverage by 10 percentage points ......................................................................................... 52 

5.6 Reform scenario 6: Increased adequacy to poverty threshold with full coverage (‘Poverty 
elimination’) ............................................................................................................................................ 53 

6. Monitoring at Union level ....................................................................................................................... 56 

7. Use of EU funds ....................................................................................................................................... 58 

Annexes ....................................................................................................................................................... 60 

1 

 
 
 
 
1. Policy context 

The  fight  against  poverty  and  social  exclusion  and  the  right  to  adequate  minimum 
income  plays  a  key  role  in  the  European  Pillar  of  Social  Rights.  The  Commission 
proposal for a Council Recommendation on adequate minimum income implements principle 
14  of  the  Pillar,  which  states  that:  “Everyone  lacking  sufficient  resources  has  the  right  to 
adequate minimum income benefits ensuring a life in dignity at all stages of life, and effective 
access  to  enabling  goods  and  services.  For  those  who  can  work,  minimum  income  benefits 
should be combined with incentives to (re)integrate into the labour market”.  

On  4  March  2021,  the  Commission  adopted  the  European  Pillar  of  Social  Rights  Action 
Plan, which was welcomed by the Union leaders at the Porto Summit on 8 May 2021. The 
Action Plan sets  ambitious  headline targets  in  the areas of employment, skills,  as  well as 
poverty.  By  2030,  the  number  of  people  at  risk  of  poverty  or  social  exclusion  should  be 
reduced  by  at  least  15  million,  including  at  least  5  million  children,  while  at  least  78%  of 
people  aged  20  to  64  should  be  in  employment  and  60%  of  adults  should  participate  in 
training every  year.  In June 2022, Member States presented their national targets along this 
ambition.  In  its  conclusions  of  12  October  20201,  the  Council  invited  the  Commission  to 
initiate an update of the Union framework to effectively support and complement the policies 
of Member States on national minimum income protection. 

The proposed initiative aims at combating social exclusion by promoting adequate income 
support,  in  particular  through  minimum  income,  effective  access  to  enabling  and  essential 
services  for  people  lacking  sufficient  resources  and  labour  market  integration  of  those  who 
can work. In doing so, the initiative also aims at supporting high levels of employment.  

The proposal builds on the ambition of the Council Recommendation 92/441/EEC of 24 
June 1992 on common criteria concerning sufficient resources and social assistance in social 
protection systems2 and extends its scope to provide a more holistic and concrete guidance to 
Member  States  on  how  to  improve  the  effectiveness  of  minimum  income  (hence  also 
proposing  to  replace  Recommendation  92/441/EEC).  It  complements  the  Commission 
Recommendation 2008/867/EC of 3 October 2008 on the active inclusion of people excluded 
from  the  labour  market3.  The  latter  sets  out  a  comprehensive  strategy  to  facilitate  the 
integration  into  sustainable,  quality  employment  of  those  who  can  work  and  to  provide 
resources which are sufficient to live in dignity, together with support for social participation 
for those who cannot. The proposal takes into account the content and key messages of the 
first joint report of the Social Protection Committee (‘the SPC’) and the Commission4, which 
delivers an analysis and overview of national minimum income. 

1  Council Conclusions of 12 October 2020 ‘Strengthening Minimum Income Protection to Combat Poverty and 

Social Exclusion in the COVID-19 Pandemic and Beyond’. 

2 Council Recommendation 92/441/EEC on common criteria concerning sufficient resources and social 

assistance in social protection systems (OJ L 245, 26.8.1992).  

3  Commission  Recommendation  2008/867/EC  of  3  October  2008  on  the  active  inclusion  of  people  excluded 

from the labour market (OJ L 307, 18.11.2008). 

4 Joint Social Protection Committee – Commission report on minimum income, 2022. 

2 

 
 
                                                           
Minimum income brings together three mutually reinforcing strands  – i) minimum income 
benefits, ii) measures fostering social inclusion and provision of quality services, iii) tailored 
assistance and incentives to access to inclusive labour markets. This comprehensive approach 
is particularly important for people furthest from the labour market facing complex barriers to 
employment and participation in society. In this way, minimum income are not a passive tool 
but should act, to the extent possible, as a springboard to improve inclusion and employment 
prospects. 

Income  support  consists  of  a  spectrum  of  monetary  benefits  addressing  different  needs, 
complemented,  where  relevant,  with  access  to  essential  services,  enabling  services  and 
activation  measures.  Such  monetary  benefits  may  include,  for  instance,  child  and  family 
allowances, housing benefits, unemployment benefits, disability benefits, old-age benefits or 
in-work benefits and also the minimum income benefits.  

Minimum income benefits play a special role within overall income support as they aim at 
filling the gap to reach a certain overall level of income in a given household. They are non-
contributory  benefits  of  last  resort,  when  other  sources  of  income  or  benefits  have  been 
exhausted or are not adequate to ensure a life in dignity. 

Well-designed  minimum  income  help  reduce  social  inequalities  and  disparities  within 
Member States, thus enhancing upward social convergence. Ensuring that persons lacking 
sufficient resources have access to adequate minimum income is essential for a life in dignity 
and supporting sustainable and inclusive growth. 

While minimum income exist in all Member  States, their design differs  markedly with 
regard to the coverage and take-up of benefits, the adequacy of income support, and the links 
of these to labour market activation measures and enabling services. This, in turn, leads to a 
heterogeneity in social and employment outcomes. While some Member States have recently 
introduced  new,  or  modernised  their  already  existing  minimum  income,  in  other  countries 
implementation  of  reforms  has  been  slow,  as  reflected  by  long-standing  country-specific 
recommendations issued in the European Semester process. In addition, thematic discussions 
under  the  Open  Method  of  Coordination5  have  highlighted  mutual  challenges,  in  particular 
related  to  the  non-take-up  of  benefits  and  the  need  to  further  support  beneficiaries  in 
participating in the labour market and integrating in the society. 

The  COVID-19  pandemic  has  highlighted  the  key  role  and  the  effectiveness  of  social 
protection  systems  to  cope  with  economic  shocks.  Some  gaps  in  the  coverage  of  social 
safety  nets  have,  however,  become  more  visible.  While  the  Union  and  the  Member  States 
took decisive actions to mitigate the socio-economic impact of the crisis, most of the adopted 
support  measures  was  temporary  and  many  responses  focused  on  policies  targeting  people 
already in employment. Confinement measures had a disproportionate impact on women and 
people in vulnerable situations, notably in terms of the higher burden of informal care work 
and more limited access to healthcare, education and other social services, also aggravating 
pre-existing  limitations  in  access  to  employment.  The  consequences  of  the  pandemic 

5 Link: https://eur-lex.europa.eu/EN/legal-content/glossary/open-method-of-

coordination.html#:~:text=The%20open%20method%20of%20coordination,introduce%20or%20amend%20th
eir%20laws.  

3 

 
 
                                                           
highlighted the critical role of minimum income to protect individuals and their families, to 
prevent them from falling into poverty and to preserve a proper standard of living in times of 
crisis.  

Furthermore, following Russia’s illegal and unjustified aggression against Ukraine, the sharp 
increase in energy prices and hiking inflation is affecting low- and lower middle-income 
households  and  risks  aggravating  energy  poverty.  This  is  likely  to  put  more  people  into 
precarious  circumstances  and  further  aggravate  the  situation  of  the  most  vulnerable.  Social 
protection systems of Member States are thus under strain and require that any gaps in social 
safety nets are sealed.  

Globalisation,  the  digital  and  green  transitions  and  demographic  change  have  driven 
changes in European labour markets for the last two decades and will continue to do so 
in the future. While those trends bring new opportunities, they also accelerate the rhythm of 
labour market  transitions.  In this context,  strengthening  minimum  income can contribute to 
ensure that everybody is protected from being at risk of poverty or social exclusion, including 
through providing sufficient support and incentives to (re)enter the labour market for people 
who can work.  

This  Staff  Working  Document  accompanies  the  Commission  proposal  for  a  Council 
Recommendation  on  adequate  minimum 
replacing  Recommendation 
92/441/EEC.  It:  (i)  presents  the  challenges  addressed  by  the  initiative;  (ii)  reviews  the 
responses  to  these  challenges;  and  (iii)  discusses  the  likely  impact  of  a  series  of  reform 
scenarios  as  potential  further  responses  to  the  challenges.  A  summary  of  the  stakeholder 
consultations is included in Annex 11 to this document. 

income  and 

4 

 
 
 
 
2. Poverty trends and impact of social protection on income 

In  spite  of  some  progress  over  the  last  decade,  poverty  and  social  exclusion  remain  a 
persistent  challenge  in  the  Union.  The  number  of  persons  at-risk-of-poverty  or  social 
exclusion  had  steadily  declined  for  seven  consecutive  years  until  2019.  However,  the 
COVID-19 pandemic and its socio-economic impacts might have put this positive trend to a 
halt.  In  2020,  the  number  of  persons  at  risk-of-poverty  or  social  exclusion  reached  94.7 
million  (or 21.5% of the total  population), reflecting stability in  most Member States while 
breaks in data series were recorded in a few Member States6. The at-risk-of-poverty or social 
exclusion  is  more  prevalent  among  women  than  men  (22.3%  vs  20.6%)7,  people  with 
disabilities,  as  well  as  people  from  Roma  communities.  While  preliminary  information 
indicates  that  support  measures  and  automatic  stabilisers  enabled  to  prevent  increases  in 
poverty and inequalities in the pandemic,  we are yet to see the impact of the pandemic and 
the impact of the current spike in inflation and energy prices. 

While until 2020 the Union economy continued to expand, employment reached the highest 
level  ever  recorded  and  unemployment  returned  to  the  pre-2008  levels,  the  COVID-19 
pandemic put a halt to those positive trends. As the economy recovers, not all jobs are likely 
to be reinstated, and support to job transitions is becoming particularly important. Given the 
uneven impact of the crisis on different groups, tailor-made active labour market policies are 
important to ensure an inclusive recovery. The consequences of the war in Ukraine are likely 
to further exacerbate the challenges ahead. 

Overall,  the  relative  income  situation  of  people  in  vulnerable  situations  has  not  been 
improving  over  the  past  decade,  indicating  gaps  in  the  effectiveness  of  Member  States’ 
social safety nets. The at-risk-of-(monetary) poverty rate for those who live in quasi-jobless 
households  had  increased  for  five  consecutive  years  until  2018  and  remained  persistently 
high  (around  62%  in  the  Union,  with  some  Member  States  above  75%)  in  2019  and  2020. 
The relative median income poverty  gap (which measures the intensity  of poverty, in  other 
words  how  poor  the  poor  are),  stood  at  24.8%  in  2020,  showing  an  overall  deterioration 
between 2008 and 2020. It has been accompanied with a similar trend in persistent poverty 
(which measures how likely a poor person is to stay poor).  

Regarding  trends  in  deprivation,  the  severe  material  and  social  deprivation  rate 
improved  substantially  between  2015  and  2019  (by  3  percentage  points,  from  9.7%  to 
6.7%). However, it remained broadly stable between 2019 and 2020, with a 0.1 percentage 
point increase. The highest proportions of people who were severely materially and socially 
deprived in 2020 were recorded in Romania (25%) and Bulgaria (22%).  On the other hand, 
the  proportion  was  less  than  5%  in  15  of  the  27  Member  States,  which  points  to  large 
variation in terms of deprivation across the Union. 

Poverty  is  likely  to  remain  broadly  stable  in  the  coming  years  unless  Member  States 
strengthen  their  social  protection  and  social  inclusion  systems.  Projections  of  the  Joint 

6 DK, DE, IE, FR, LU. 
7 Source: Eurostat ilc_peps01, year: 2020. 

5 

 
 
                                                           
Research Centre’s (‘the JRC’)8 indicate that structural trends are expected to increase market 
income inequality in the period from 2019 to 2025. If no policy change is implemented, the 
tax-benefit  systems  of  most  Member  States  are  projected  to  be  able  to  partly  cushion  the 
distributional consequences of structural changes, including those related to skills structures 
and ageing. However, poverty is projected to remain stable at the currently high levels (with 
only 700,000 less people projected to be at-risk-of-poverty in 2025 than in 2019).  

There are large differences between the Member States in the capacity (or effectiveness) 
of  social  protection  systems  to  cope  with  economic  shocks  and  provide  for  adequate 
social  protection.  While  the  impact  of  social  transfers  (excluding  pensions)  in  reducing 
poverty was in 2020 above or close to 50% in Ireland, Finland and France, it remained below 
25% in Romania, Bulgaria, Croatia, Malta, Italy and Latvia. Specifically, there are substantial 
differences in the adequacy, coverage and take-up, of income support to households.  

Box: Main concepts and definitions 

1)  Income  support  means  the  total  of  all  types  of  monetary  benefits  provided  to  the 
household, including minimum income benefits. 

2) Minimum income benefits play a special role within overall income support as they aim at 
filling the gap to reach a certain overall level of income in the a given household. They are 
non-contributory benefits of last resort, when other sources of income or benefits have been 
exhausted or are not adequate to ensure a life in dignity. Minimum income benefits are means 
tested  and  financed  by  taxes.  Various  forms  of  social  assistance  benefits  are  identified  as 
minimum  income  benefits  in  the  Member  States  (composed  by  one  single  or  a  cluster  of 
benefits).  Minimum  income  benefits  are  typically  national,  but  can  be  complemented  or 
substituted  by  regional  or  local  schemes.  The  granted  amounts  of  the  benefits  generally 
depend  on  household  composition.  Minimum  income  benefits  are  usually  not  time-limited, 
but  available  for  as  long  as  the  eligibility  is  maintained.  Finally,  they  might  be  linked  to 
activation  conditions,  requiring  beneficiaries  who  are  able  to  work  to  participate  in  active 
labour  market  measures  and  to  actively  seek  employment.  The  list  of  minimum  income 
benefits in Member States used for this document is in Annex 1.  

3) Minimum income refers to non-contributory and means-tested safety nets operating within 
social protection systems. 

4) Coverage means the entitlement to participate in minimum income schemes, as defined by 
the national legislation. 

5)  Take-up  means  the  proportion  of  persons  entitled  to  participate  in  minimum  income 
schemes who actually take part in them. 

8 Christl M., Livanos I., Papini A.: ‘Use of EUROMOD microsimulation - Modelling of Fairness and Resilience 
of Tax and Social Benefits Systems and Reforms’; Assessment of minimum income scenarios, March 2022. 
Note that the analysis uses EUROMOD, the microsimulation model for the European Union, and it is based on 
Cedefop  skills  forecast  data,  projections  of  pension  expenditures  from  the  2021  Ageing  Report  and 
EUROSTAT population projections. 

6 

 
 
                                                           
Data  used:  Cross-country  quantitative  comparisons  are  primarily  based  on  data  from  the 
income  year  2019  (in  particular  EU-SILC  2020;  OECD  2019;  Eurostat  2019),  which  were 
the  latest  available  at  the  time  of  drafting  this  Staff  Working  Document  and  also  ensure 
consistency with the 2022 Joint Social Protection Committee – European Commission report 
on minimum income and the latest update of the benchmarking framework developed by the 
Social  Protection  Committee9.  This  also  relates  to  the  EUROMOD  simulations  on 
hypothetical reform  scenarios, prepared by the JRC10, as described in Chapter  5. Although 
2020-2021 policy years are already released in EUROMOD, it was decided that 2019 would 
be  the  main  policy  year  for  two  main  reasons.  First,  the  simulations  aim  at  capturing  the 
main  structural  elements  of  minimum  income  benefits,  leaving  aside  the  exceptional 
circumstances induced by the COVID-19 pandemic in terms of labour market conditions and 
temporary  policy  responses.  Second,  as  the  availability  of  administrative  data  comes  also 
with delay, information was not fully available for the very latest policy years at the time the 
simulations were run. When the analysis is less quantitative by nature (i.e. information on the 
provision  of  services)  and/or  focuses  on  the  overall  Union  average  for  which  more  recent 
data  is  available (i.e. overall trends in  poverty),  then more recent  information may also  be 
used.  

9 Link: 

https://ec.europa.eu/social/main.jsp?advSearchKey=bench_fram_minincom&mode=advancedSubmit&catId=2
2&doc_submit=&policyArea=0&policyAreaSub=0&country=0&year=0#navItem-1  

10  Almeida  V.,  De  Poli  S.,  Hernández  A.  (2022).  The  effectiveness  of  Minimum  Income  Schemes  in  the  EU, 

JRC Working Papers on Taxation and Structural Reforms, forthcoming. 

7 

 
 
                                                           
While overall, the impact of social transfers (excluding pensions) on poverty reduction 
in the Union has declined since 200811, a mild convergence across Member States over time 
is  observed.  It  is  evident  that  social  transfers  are  a  key  tool  for  addressing  poverty. 
Improvements  took  place  for  some  countries  where  the  impact  was  relatively  low  in  2008 
(Estonia,  Greece  and  Latvia),  while  in  some  of  those  Member  States  where  the  indicator 
stood  previously  at  a  relatively  high  level,  there  has  been  a  significant  deterioration 
(Hungary, the Netherlands, Sweden). At the same time, upwards convergence was hindered 
by  Member  States  where  the  indicator  has  worsened  from  an  already  low  level  (e.g. 
Romania).  

Figure 1: Impact of social transfers on poverty (population aged 18-64)  

Note: EU-27 was estimated for 2008 and 2009. There is a break in DE data for 2020 and in BE data for 2019 – and thus also 
in EU-27 data. Source: DG EMPL computation based on Eurostat EU-SILC. 

It also appears that the specific impact of minimum income benefits on poverty varies a 
lot  across  the  Union12.  The  impact  of  minimum  income  benefits  on  the  at-risk-of-poverty 
rate tends to be low (the impact is significant in Ireland, Cyprus, France and Slovenia only). 
This is not surprising given that the adequacy of minimum income benefits is at or below the 
poverty  threshold  in  most  Member  States13.  Considering  the  impact  on  the  share  of  people 
below  two-thirds  of  the  poverty  threshold  (40%  of  the  country-specific  equivalised  median 
income),  the  impact  of  minimum  income  benefits  shows  a  large  variety.  While  in  Ireland, 

11 Joint Social Protection Committee–European Commission report on minimum income, 2022. 
12 Almeida V., De Poli S., Hernández A., Technical note on a calibrated EUROMOD baseline for assessing the 

effectiveness of minimum income schemes in the EU, Joint Research Centre, 2022. 

13 Country-specific results in this respect are shown in Annex 3a. 

8 

 
 
 
                                                           
France,  Cyprus,  Slovenia,  Germany,  Belgium  the  impact  of  minimum  income  benefits  is 
larger, in many other countries, it remains relatively low.  

However, the impact of minimum income benefits on the relative at-risk-of-poverty gap 
is  generally significant, though it is  very small in some  Member States. This  highlights 
that minimum income benefits reduce the shortfall in income, as shown in Figure 2.  At the 
same time, there is significant heterogeneity in the performance of Member States, with a few 
countries  reducing  significantly  at-risk-of-poverty  gap  with  their  minimum  income  benefits 
(for  instance  Ireland,  Cyprus,  France,  Slovenia,  Finland),  whereas  others  achieve  only 
marginal  or  no  significant  reductions  (for  instance  in  Hungary,  Bulgaria,  Latvia,  Estonia, 
Poland)14. 

Figure 2: Depth of poverty measured against the poverty threshold before and after minimum income benefits (MIS)  

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Notes: Figure 2 shows relative at risk of poverty gaps before and after income support for all EU Member States, using the 
standard  poverty  criterion.  This  indicator  measures  the  intensity  of  poverty,  i.e.,  the  mean  shortfall  in  income  from  the 
poverty  threshold,  in  percentage  of  the  latter.15  In  countries  where  two  minimum  income  benefits  are  considered  in  this 
assessment,  the  joint  impact  of  both  benefits  is  reflected  in  the  graph.  The  poverty  threshold  is  anchored  to  the 
counterfactual scenario where no minimum income benefits are in place. Source: JRC elaboration using EUROMOD. 

Finally, it appears that existing designs of minimum income benefits do not contribute to 
the convergence of disposable incomes of the poorest citizens across the Union. Figure 3 
illustrates that the best-performing countries in terms of increasing the disposable income of 
their  population  at-risk-of-poverty  are  those  countries  where  the  disposable  income  of  this 
population is relatively higher before minimum income benefits. This pattern can be observed 
when focusing on individuals with an income below two-thirds of the poverty threshold (see 
Annex 4), and remains significant, although to a lesser extent, for all individuals in poverty 
(Figure  3).  The  minimum  income  benefit  provided  by  Ireland,  the  Netherlands,  France  and 
Luxembourg seem to be significantly more effective in improving the income conditions of 

14 Result using 2/3 of the standard poverty are shown in Annex 3b. 
15  Note  that  this  measure  of  the  poverty  gap  differs  from  the  median  at-risk-of-poverty  gap  used  by 
EUROSTAT.  For  detailed  methodologies,  see  Almeida  V.,  De  Poli  S.,  Hernández  A.,  Technical  note  on  a 
calibrated EUROMOD baseline for assessing the effectiveness of minimum income schemes in the EU, Joint 
Research Centre, 2022. 

9 

 
 
 
                                                           
 
 
 
 
 
 
 
 
their poorest  citizens, whereas in  Bulgaria,  Latvia, Poland and Romania the impact  appears 
very low. 

Figure 3: Disposable income of people who are at-risk-of poverty, before and after minimum income benefits (MIS)  

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Notes:  Figure  3  depicts  the  mean  annual  equivalised  disposable  income  of  people  at-risk-of-poverty  before  and  after 
minimum income benefits are provided. Results are presented using Purchasing Power Parities (PPPs) to ease comparability 
across countries. The averages are calculated for all poor individuals, regardless of whether they receive minimum income 
benefits or not. This approach suggests that the results can be interpreted by differences across countries both in terms of 
the adequacy, coverage and take-up of the different minimum income benefits. In countries where two minimum income 
benefits are considered in this assessment, the joint impact of both is reflected in the graph. For this graph, people at-risk-
of-poverty  are  those  who  are  at-risk-of-poverty  in  absence  of  minimum  income  benefits.  Source:  JRC  elaboration  using 
EUROMOD and Eurostat data on PPPs (2019). 

10 

 
 
 
 
 
 
 
 
 
 
 
 
3. Challenges related to the effectiveness of minimum income  

The  key  role  of  minimum  income  is  to  ensure  that  everybody  has  a  sufficient  level  of 
resources to ensure a life in dignity and be able to participate in the economic and social life, 
including the labour market. From this perspective, the effectiveness of minimum income can 
be assessed through the analysis of five main dimensions, which are presented in more detail 
in this Chapter: (i) adequacy of income support, including the regularity and timeliness of the 
revision  of  benefit  levels;  (ii)  coverage  and  take-up  of  minimum  income;  (iii)  the  extent  to 
which  minimum  income  promote  access  to  inclusive  labour  markets  or  facilitate  social 
inclusion; (iv) effective provision of services indispensable for supporting labour market and 
social integration; and (v) sound governance mechanisms.  

3.1 Challenges related to the adequacy of income support 

The analysis of the adequacy of income support is based on overall income support provided, 
and is typically related to at-risk-of-poverty thresholds16. Available evidence highlights that 
income support is largely insufficient to protect non-working households of active age from 
poverty,  including  multiple-person  households  of  active  working  age  with  dependents,  as 
their net disposable income is generally below the poverty threshold17. 

Income support is considered adequate when the level of cash benefits ensures a decent 
standard  of  living.  Adequacy  needs  to  be  assessed  on  the  basis  of  all  available  income 
support  that  contribute  to  income  security  of  minimum  income  beneficiaries  and  their 
households (i.e. minimum income benefits and all other monetary benefits such as child and 
family  benefits  or  housing  benefits).  Adequate  income  support  can  be  achieved  -  while 
ensuring  incentives  to  work  -  by  lifting  all  persons  above  the  national  at-risk-of-poverty 
threshold  or  allowing  the  purchasing  of  a  nationally  defined  basket  of  goods  and  services 
(that need to reflect the standards of living in a given Member State). While setting structural 
levels  of  benefits  it  is  instrumental  that  reference  values  used  (such  as  measures  linked  to 
national at-risk-of-poverty thresholds), are calculated over a longer time period (for example, 
3-year  running  average)  to  smooth  potential  volatilities  resulting  from  economic  cycles. 
Conversely,  the  regular  updating  of  benefit  levels  could  be  based  on  other  indicators 
reflecting the current changes in price levels and standards of living. 

16  See  e.g.:  Cantillon,  B.,  Parolin,  Z.  and  Collado,  D.,  2018. Rising  inequalities  and  welfare  generosity: 
Structural  constraints  on  the  adequacy  of  minimum  incomes  in  European  and  American  welfare  states. 
Working  Papers  1809,  Herman  Deleeck  Centre  for  Social  Policy,  University  of  Antwerp.  Available  at: 
https://ideas.repec.org/p/hdl/wpaper/1809.html; OECD (2019), "Left on your own? Social protection when 
labour  markets  are  in  flux",  in OECD  Employment  Outlook  2019: The  Future  of  Work,  OECD  Publishing, 
Paris, https://doi.org/10.1787/bfb2fb55-en;  and  Penne,  T.,  Cornelis,  I.  and  Storms,  B.,  2020.  All  we  need 
is…. Social Indicators Research, 147(3), pp.991-1013. 

17  See  e.g.:  Immervoll,  H.  and  Scarpetta,  S.,  2012.  Activation  and  employment  support  policies  in  OECD 
countries. An overview of current approaches. IZA Journal of Labor Policy, 1(1), pp.1-20; Nelson, K. (2012). 
Counteracting  material  deprivation:  The  role  of  social  assistance  in  Europe.  Journal  of  European  Social 
Policy,  22(2),  148-163;  and  Wang,  J.  and  Van  Vliet,  O.,  2016.  Social  assistance  and  minimum  income 
benefits:  Benefit  levels,  replacement  rates  and  policies  across  26  OECD  countries,  1990–2009. European 
Journal of Social Security, 18(4), pp.333-355.  

11 

 
 
                                                           
  
 
The adequacy of the overall income support provided to minimum income beneficiaries is 
low in about half of the Member States.  

The adequacy of income support has been eroding in almost all Member States over the 
recent  years18.  For  the  latest  available  income  years  (2017-2019),  the  adequacy  of  income 
support was stable overall in the Union (measured against the at-risk-of-poverty threshold), 
but it slightly eroded if measured against the income of a low-wage earner19. This reflects an 
erosion of adequacy in most Member States and an increase in only two Member States (with 
a  very  significant  increase  in  Italy),  highlighting  that  the  income  of  minimum  income 
beneficiaries  was  generally  lagging  behind  overall  income  developments  that  took  place  in 
the recovery before the COVID-19 crisis.  

The  income  of  a  minimum  income  beneficiary  (living  in  a  single  adult  household)  lies 
generally  at  a  level  between  20%  and  100%  of  the  poverty  threshold.  The  minimum 
income benchmarking framework20 analyses the adequacy of benefits based on the total net 
disposable  incomes  received  by  minimum  income  recipient’s  households.  Net  disposable 
income  is  then  compared  to  the  national  poverty  threshold  (as  an  indication  of  the  income 
poverty  alleviation  effect)  and  with  the  income  of  a  low-wage  earner21  (also  providing  an 
indication  of  the  monetary  incentives  to  work  for  beneficiaries).  Results  regarding  both 
aspects  of  adequacy  are  shown  in  Figure  422.  The  adequacy  was  the  highest  in  the 
Netherlands, Ireland and Italy, where the level of benefits of single-adult households in 2019 
exceeded  or  was  very  close  to  90%-100%  of  the  national  poverty  threshold  level.  At  the 
lower end of the adequacy scale, the minimum income in Romania, Bulgaria, and Hungary 
was  around  or  below  20%  of  the  poverty  threshold.  In  terms  of  linking  adequacy  to  wage 
levels, it appears that the income support provided to single adult households is below 80% of 
the net income of a low wage earner in all Member States, which guarantees that monetary 
disincentives to work are not in place. 

a 

benchmarking 

18 Joint Social Protection Committee–European Commission report on minimum income, 2022. 
19 Low-wage earner is defined as a person earning 50% average  wage (30% average wage corresponding to a 
person working part time). 
20 In 2018, the Social Protection Committee agreed to assess the adequacy of minimum income benefits based 
framework. 
on 
https://ec.europa.eu/social/main.jsp?advSearchKey=bench_fram_minincom&mode=advancedSubmit&catId=22
&doc_submit=&policyArea=0&policyAreaSub=0&country=0&year=0#navItem-1 
21 Low-wage earner is defined as a person earning 50% average  wage (30% average wage corresponding to a 
person working part time). Estimates of the level of low wages as a share of average wages from the Structure 
Earnings Survey (SES) which is produced every four years, covering firms with more than 10 employees, show 
that for full time employment it appears that the level of  wages at the  first decile is ranging between 40-60% 
AW. In addition, for countries with a statutory minimum wage, estimates of the level of minimum wages as a 
share  of  average  wages  (for  full  time  employment)  are  produced  by  Eurostat  and  range  from  around  35%  to 
around 50% AW. Moreover, a reference to low wage defined as 2/3 of the median can be derived from the fact 
that generally the median wage represents around 80% of the average, which corresponds then to close to 50% 
of the average (53%). 
22 Joint Social Protection Committee–European Commission report on minimum income, 2022. 

12 

 
 
                                                           
Figure  4  –  Net  income  of  minimum  income  recipients  (single  adult)  as  %  of  the  at-risk-of-poverty  threshold  and  of  the 
income of a low wage earner (2019) 

income of a low-wage earner 

l

d
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Source: Joint SPC-Commission minimum income report. Note: EU27 computed as a simple average. Data for IT is for income 
year  2020  (instead  of  2019).  For  DE,  there  is  a  break  in  the  SILC2018-2020  AROP  thresholds  used  to  compute  the  AROP 
threshold  smoothed  over  3  years  for  the  income  year  2019.  Housing  costs  are  assumed  to  be  of  11%  of  average  wage. 
Source: DG EMPL elaboration using data from Eurostat and OECD tax-ben.  

With  existing  levels  of  income  support,  the  income  of  a  minimum  wage  earner  is  also 
higher in all Member States than that of a (single adult) minimum income beneficiary 
thus ensuring incentives to work.  The net  income of a minimum  income beneficiary  as a 
share of the net income of a minimum wage earner ranges between 10% in Romania to 80% 
in  the  Netherlands.  These  results,  together  with  similar  results  related  to  low  wages  shown 
above, illustrate that the indicator of the net income of a low wage earner is a relatively good 
proxy for reflecting upon the incentives to work with relation to minimum wage levels.23  

Furthermore, it appears that in most Member States incentives to work for minimum 
income beneficiaries would also be maintained with higher levels of income support, as 
the  net  income  of  a  minimum  wage  earner  (single  adult)  is  at  or  higher  than  the  poverty 
threshold  in  most  Member  States  with  a  statutory  minimum  wage24  (in  2019)25.  The  net 

23  In  addition  the  comparison  to  the  income  of  a  low  wage  earner  allows  a  more  consistent  approach  that  is 
independent of the relative level of minimum wages in the various Member States relative to overall wages. 
24  Analysis  is  based  on  the  Directorate-General  Employment,  Social  Affairs  and  Inclusion  calculations  using 
data from OECD tax-benefit model. The income year 2019 is used to align the income year with related findings 
from the Joint Social Protection Committee-European Commission report on minimum income.  

13 

 
 
 
 
                                                           
 
 
income of a minimum wage earner seems to fall marginally below the poverty threshold in 
only  three  Member  States  (Czechia,  Slovenia  and  Germany),  which  also  highlights 
inadequate levels  of  the minimum  wage in  these  Member States. From the countries where 
the net income of a minimum wage earner is below the poverty threshold, Germany has just 
passed  legislation  on  increasing  Germany’s  minimum  wage  to  12  euros  per  hour  from 
October 1, 2022, which will bring the net minimum wage above the poverty threshold. In the 
remaining two countries, these results suggest that their minimum wages are not adequate and 
the tax-benefit systems do not seem to support minimum wage earners sufficiently to ensure 
that work pays. As also emphasized in the Impact Assessment accompanying the proposal for 
a  Directive  on  adequate  minimum  wages  in  the  European  Union26,  a  low  adequacy  of 
minimum  wages  entails  the  risk  that  work  does  not  pay.  In  particular,  adequate  minimum 
wages and tax incentives for low-wage earners are complementary policies to maintain high 
employment and support the income of low-wage workers. 

Figure 5: Net income of minimum income beneficiary and net income of minimum wage earner as % the poverty threshold, 
single earner (2019) 

200%

180%

160%

140%

120%

100%

80%

60%

40%

20%

0%

EL

IE

EE

RO MT

FR

ES

LV NL

PT

BE

LT

LU HR

SK

BG PL HU DE

SI

CZ

Net income of minimum income beneficiary as % of AROP threshold

Net income of min wage earner as % of AROP threshold

AROP threshold

Note: For DE, there is a break in the SILC 2018-2020 AROP thresholds used to compute the AROP threshold smoothed over 3 
years for the income year 2019. Housing costs are assumed to be of 11% of average wage. Only MS are shown where there 
is a statutory minimum wage in place. Source: own computation on Eurostat data and OECD data. DE result is temporary 
due to the announced policy change from October 2022.  

25 Note that minimum wages were raised cautiously in most Member States from 2020 to 2021, with the median 
country  recording  an  increase  of  3%  (Eurofound  (2021), Minimum  wages  in  2021:  Annual  review,  Minimum 
wages in the EU series, Publications Office of the European Union, Luxembourg). 
26 Commission Staff Working Document, Impact Assessment  accompanying the proposal for a Directive of the 
European Parliament and of the Council on adequate minimum wages in the European Union {COM(2020) 682 
final} - {SEC(2020) 362 final} - {SWD(2020) 246 final}. 

14 

 
 
 
 
                                                                                                                                                                                     
The  level  of  income  support  is  generally  more  adequate  when  other  household  types27 
are  considered  than  single  adult  households.  The  adequacy  of  the  income  of  minimum 
income  beneficiaries  is  generally  slightly  more  favourable  when  considering  different 
household types than single adult households  (as outlined by the benchmarking framework 
on minimum income).28 For example, the level of minimum income support is around 15-20 
percentage points higher on average in the Union for single parent households and around 5-
10 percentage points higher for couples with two children. However, in all household types 
observed,  the  income  of  households  benefiting  of  minimum  income  remains  generally  well 
below the poverty threshold (see charts in Annex 8 and 9).  

While with current levels of benefits monetary incentives to work are generally ensured 
in  all  Member  States,  the  extent  to  which  this  might  hold  with  income  support  at  the 
level of the poverty threshold also depends on the work intensity of the household and 
the  number  of  dependent  children.    Overall,  the  level  of  work  intensity  and  wage  levels 
that allow to reach the poverty threshold depends on household types and Member States. All 
things being equal, the adequacy of household income, in equivalised terms, tends to increase 
with the work intensity of the household and tends to decrease with the number of dependent 
children in the household. For instance, the net income of households with two low-wage (or 
minimum wage) earner adults and two dependent children is above the poverty threshold in 
all Member States. This means that two earner households with two children are in principle 
not at risk of poverty when both parents are working full time. Still, this may not always be 
the case for lower work intensity households. For instance, the income of a couple with two 
children where only one adult is at work on a low wage or a minimum wage is lower than the 
poverty threshold in around half of the Member States (Figure 6 below)29.  

The  link  between  poverty  risk  and  work  intensity  is  further  reflected  by  the  general 
pattern  that,  on  average,  in-work  poverty  increases  as  the  work  intensity  of  the 
household decreases. In-work poverty ranges from 5% for high work intensity households to 
around  20-25%  for  medium  work  intensity  households  and  around  40%  for  low  work 
intensity  households.  This  highlights  the  need  for  further  reforms  in  some  Member  States’ 
tax-benefit  systems  to  ensure  that  work  pays,  either  relating  to  the  design  of  tapering  of 
minimum  income  (or  other  benefits  including  in-work  benefits)  with  higher  income  from 
work, or also in some instances in relation to the level of the minimum wages (see Chapter 
3.3 for further details).  

27 Adequacy of larger household is measured based on equivalised income using OECD’s equivalence scales. 
28 Joint Social Protection Committee-European Commission report on minimum income, 2022. 
29  The  income  year  2019  is  analysed  to  align  methodology  with  the  benchmarking  framework  on  minimum 
income and the Joint Social Protection Committee–European Commission report on minimum income, 2022. 

15 

 
 
                                                           
Figure 6 – Net income of minimum income recipients (two adult household with 2 children) as % of the poverty threshold 
(2019) depending on work intensity and wage levels 

Source: Data for IT is for income year 2020 (instead of 2019). For DE, there is a break in the SILC2018-2020 AROP thresholds 
used to compute the AROP threshold smoothed over 3 years for the income year 2019. Housing costs are assumed to be of 
19%  of  average  wage.  Source:  DG  EMPL  elaboration  using  data  from  Eurostat  and  OECD  tax-ben.  The  dotted  line  is  the 
poverty threshold. 

While  it  is  key  to  ensure  that  work  pays,  it  should  be  underlined  that  transition  rates  to 
employment  of  minimum  income  beneficiaries  appear  to  equally  depend  on  other 
factors  than  the  potential  income  gain  from  work.  Research30  has  shown  that  the 
likelihood  of  entering  employment  increases  with  the  availability  of  active  labour  market 
programmes, including job counselling, social assistance services and enabling services, such 
as childcare, as well as by preferable macroeconomic circumstances. Other personal factors 
that play a role include age and educational attainment. On the other hand, the likelihood to 
take up employment is lower for people with health limitations and for adults in households 
with  many  dependent  children.  While  once  all  these  other  factors  are  taken  into 
consideration, the expected net income gain from work does not, on average, seem to have a 
significant  impact  on  the  probability  to  take  up  a  job  (for  minimum  income  beneficiaries), 
there are specific recipient groups and situations where this impact can be significant.   

There  is  a  high  dispersion  in  the  nominal  values  of  minimum  income  benefits  across 
Member States. 

Looking at the nominal values of minimum income benefits in each Member State, it appears 
that  the  nominal  value  of  the  minimum  income  benefit  is  more  than  50-fold  between  the 
worst  performing  Member  State  (Romania  for  a  single  adult  household  and  Poland  for  a 

30 Study about the Methodology to Measure the Returns on Investment from Integrated Social Assistance 
Schemes Final report VC2018-0711, prepared by Ecorys / Budapest Institute in August 2020. 

16 

 
 
 
 
                                                           
couple with  one child) and the best  performing Member State (Denmark).  It  must be noted 
that comparison of Figures 7a and 7b below should be taken with a caveat due to slight time 
lag between the data used in 7a (which shows benefit levels based on most recent information 
from Country fiches31) while 7b is based on SILC 2019 Eurostat data. 

When relating the values of minimum income benefits with the at-risk-of-poverty threshold, 
it  appears  that  only  in  Denmark  the  level  of  the  minimum  income  benefit  reaches  the 
poverty threshold. In other three cases (the Netherlands, Belgium and Slovenia), the benefit 
level  seems  to  reach  about  70-80%  of  the  poverty  threshold.  Furthermore,  while  benefit 
levels are around half of the poverty threshold in many Member States, the Eastern and some 
Southern European  countries as well as the Baltic states seem  to  provide minimum  income 
benefits  in  the  amount  that  is  less  than  50%  of  the  poverty  threshold  (for  single  adult 
households with no children). 

Figure 7a: Nominal monthly level of minimum income benefit(s), single adult households, (EUR) 

Minimum income benefits (maximum amount)

h
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1600

1400

1200

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200

0

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Source: Country fiches on minimum income published by SPC 2022 and Eurostat, DG EMPL elaboration; Notes: HR benefit 
based  on  a  single  person  capable  of  work;  DK  based  on  a  single  person  over  30  years  of  age;  LT  based  on  the  benefit 
provided in the first six months; NL benefit calculated for a single person between 21 years and retirement age; PL benefit 
corresponds to the minimum the social assistance office is obliged to grant; BE the value for the integration income (revenu 
d’intégration sociale – RIS) is used. 

31 Country fiches on minimum income – Joint report of the Social Protection Committee and Commission on minimum 
income, 2022 

17 

 
 
 
 
                                                           
Figure 7b: Nominal monthly level of at-risk-of-poverty threshold (EUR), single adult households

At-risk-of-poverty threshold (income year 2019)

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Adequacy  is  discussed  above  for  the  total  income  support,  taking  into  consideration  all 
monetary  benefits,  but  excluding  in-kind  benefits.  This  is  done  so  because  it  is  difficult  to 
calculate  the  monetary  value  of  such  in-kind  benefits  available  to  minimum  income 
beneficiaries  as  they  depend  on  individual  costs,  take-up,  and  they  might  include  the 
provision  of services for which cost  calculations are not  available.  Data on the value of in-
kind benefits remains limited and is not available for cross-country comparisons.32 Therefore, 
the analysis included in this Staff Working Document on the adequacy of income support and 
minimum  income  benefits  does  not  take  into  consideration  the  monetary  value  of  in-kind 
benefits.  While  the  provision  of  in-kind  benefits  remains  important  to  contextualize  the 
assessment  of  adequacy,  the  proposal  aims  at  achieving  adequate  levels  of  income  support 
only.  

Adequacy of income support could be based also on a reference budget. 

Reference budgets are illustrative priced baskets of goods and services that represent an 
acceptable standard of living for a hypothetical household within a given Member State. 
It  can  be  designed  in  various  ways,  taking  into  account  household  composition,  disposable 
income,  and  other  aspects  such  as  housing  or  transport  needs.  Absolute  needs-based 
measurement  of  poverty  is  rarely  used  in  a  cross-country  comparable  manner,  as  reference 
budgets  are  created  independently  from  one  another,  using  different  methods  (to  allow 
reflecting  the  specificities  of  Member  States)  and  results  that  are  not  comparable  across 
countries. 

According to the findings of a pilot project on reference budgets33, such methodologies have 
been developed in most of the Member States in the past but with various purposes and use. 

32  Neither  does  the  information  provided  by  the  Member  States  in  MISSOC  nor  in  the  OECD  country  fiches 
offer sufficient detail on the design of services that minimum income beneficiaries can access (aside from those 
linked to activation). 
33 Goedemé, T., Storms, B., Penne, T. and Van den Bosch, K. (eds.) (2015), The development of a methodology 
for comparable reference budgets in Europe – Final report of the pilot project, Brussels: European Commission. 

18 

 
 
 
                                                           
They can serve as a benchmark upon which the adequacy of social benefits (or eventually a 
given  national  poverty  threshold)  can  be  assessed.  By  doing  so,  Member  States  could 
contextualise  the  poverty  threshold  to  the  specificities  of  their  country  including  living 
conditions of different household types. Most of them are based on country-level data, while 
some have a local geographical focus and use their capital city or another large city as a point 
of  reference.  Almost  all  are  constructed  for  one  or  more  model  families,  most  frequently, 
couples  with  children  of  various  ages  and  single  people,  with  specific  assumptions  made 
about  the  health  and  living  environment  of  those  concerned.  While  it  is  clear  that  these 
methodologies  require  regular  adjustment  and  updating,  it  seems  that  the  frequency  with 
which these are performed and the methods used differ greatly across Member States. Among 
those  where  such  methodology  exist  for  various  purposes,  approximately  half  of  them  are 
adjusted in line with price changes as measured by the Consumer Price Index34 (CPI). 

Building  up  reference  budgets  requires  agreements  on  a  set  of  assumptions  and 
methodologies,  including  decisions  on  some  normative  considerations.  The  methodological 
approaches  to  constructing  reference  budgets  vary  across  national  practices:  while  some  of 
them  define  living  standards  in  terms  of  a  ‘minimum  living  standard  for  full  social 
participation’,  others  use  more  limited  standards  of  living  concepts,  closer  to  ‘minimum 
subsistence’.  A  key  challenge  in  modelling  absolute  poverty  across  countries  consists  in 
finding the right balance between the requirements of cross-country comparability and local 
validity, and to  account  for the country-specific  definition of minimum  needs  expressed by 
reference  budgets.  A  recent35  JRC  project  explores  the  technical,  methodological,  and  data 
requirements of developing a cross-country comparable absolute poverty measure for Union-
wide  use.36  It  highlights  the  complexity  of  such  exercises  and  that  they  require  a  complex 
underlying analysis and a set of assumptions.  

Currently37,  eight  Member  States  –  one  way  or  another  -  use  the  value  of  a  basket  of 
essential goods and services to assess or determine the level of the benefit to be provided 
as  part  of  their  minimum  income  schemes:  Cyprus,  Estonia,  Germany,  Lithuania, 
Luxembourg, Poland, Slovenia, and Sweden.  

Luxembourg  recently  reformed  its  minimum  income  system  with  a  view  to  ensure  basic 
means of subsistence for its recipients. It is determined in relation to the essential items and 
corresponding  amounts  of  the  reference  budget  calculated  by  the  Statistical  Institute  of 
Luxembourg. This reference budget is defined as a priced basket of goods and services that 

34 Storms, B., Goedemé, T., Van den Bosch, K., Penne, T., Schuerman, N. and Stockman, S. (2014), Review of 
current  state  of  play  on  reference  budget  practices  at  national,  regional,  and  local  level,  Brussels:  European 
Commission. 
35 Published report: Menyhért, B., Cseres-Gergely, Zs., Kvedaras, V., Mina, B., Pericoli, F., Zec, S. Measuring 
and monitoring absolute poverty (ABSPO) – Final Report, EUR 30924 EN, Publications Office of the European 
Union, Luxembourg, 2021, ISBN 978-92-76-45227-0, doi:10.2760/787821, JRC127444.  
36  For  the  implementation  of  the  project,  three  main  input  sources  were  used:  cross-country  comparable 
reference  budgets  produced  by  previous  literature,  the  applied  methodology  of  the  Italian  Statistics  Office 
(ISTAT)  for  the  measurement  of  absolute  poverty  in  Italy,  and  the  theoretical  literature  on  the  statistical 
measurement of poverty in developing countries based on household budget survey data.  
37 Additional information on national practices is available in the Joint Social Protection Committee–European 
Commission report on minimum income, in particularly its annex presenting country fiches.  

19 

 
 
                                                           
ensures a decent standard of living in society38. While the law establishing the benefit has no 
explicit  mention  of  the  reference  budget,  the  indexation  of  the  minimum  income  benefit  is 
made according to the evolution of consumer prices in the reference budget. In Lithuania, the 
threshold for the income test is defined annually based on the state supported income (SSI), 
which is linked to minimum consumption needs (MCN). The calculation of the MCN is based 
on  national  statistical  data  on  household  expenditure  and  on  minimum  food  requirements. 
The  amount  of  social  assistance  is  indexed  to  the  MCN,  which  in  turn  is  indexed  to  price 
changes  and  in  principle  updated  annually.  In  Cyprus,  the  guaranteed  minimum  income 
scheme  was  introduced  in  201439.  The  level  of  the  basic  amount  was  calculated  using 
reference  budget  methodology,  depending  on  the  size  and  age  structure  of  the  recipient 
household. The monthly amounts can be adjusted every two years, after taking into account 
the actual prices of items included in the reference budgets. 

Member States’ expenditure on minimum income benefits varies to a large degree.  

A contextual indicator on adequacy derives from the budgetary expenditure that is spent on 
minimum  income  benefits  in  each  Member  State  and  in  the  Union  overall.  The  ranking  of 
Member  States  in  this  respect  is  similar  to  their  performance  in  terms  of  the  adequacy  of 
minimum income benefits.  

Eurostat  reports  that  overall  in  2019,  the  total  expenditure  on social  protection  benefits in 
the Union amounted  to  EUR 3 761 billion,  which  was  equivalent  to  26.9 %  of the  Union 
GDP. An analysis by function reveals that the highest levels of expenditure in the Union were 
recorded  for  the  old  age  and  survivors  function  (largely  composed  of  pensions),  which 
accounted for close to half (46.3 %) of the total expenditure on social protection benefits in 
2019.  The  next  highest  share,  accounting  for  almost  three  tenths  (29.5 %)  of  the  Union’s 
expenditure  on  social  protection  benefits,  was  for  the  sickness/health  care  function,  while 
each  of  the  remaining  four  functions  accounted  for  single-digit  shares.  Among  these,  the 
highest proportion was recorded for the family/children function (8.4 % of total expenditure 
on  social  protection  benefits),  followed  by disability (7.6 %), unemployment (4.5 %)  and 
housing and social exclusion (3.7 %).40  

Regarding expenditure on minimum income benefits, the JRC estimates that Member States 
together  spend  about  0.42  %  of  the  yearly  GDP  of  the  Union.  In  absolute  value,  this  was 
equal to approximately EUR 59.3 billion in 2019. 

to  data:https://statistiques.public.lu/en/methodology/methodes/social-conditions/Cond-vie/reference-

38  Link 
budgets/index.html.  
39 The adoption of the GMI was linked to the ‘Memorandum of Understanding’ under the economic adjustment 
programme for Cyprus. 
40  Eurostat  link:  https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Social_protection_statistics_-
_social_benefits#Means-tested_benefits. 

20 

 
 
                                                           
Figure 8: Expenditure on minimum income benefits (% of GDP)

0,90

0,80

0,70

0,60

0,50

0,40

0,30

0,20

0,10

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

Note:  In  countries  where  two  minimum  income  benefits  are  considered  in  this  assessment,  the  joint  impact  of  both  is 
reflected in the graph. Source: JRC elaboration using EUROMOD and Eurostat data on GDP (2019). 

As  Figure  8  illustrates,  national  expenditure  on  minimum  income  benefits  varies 
significantly across Member States, from 0.02% of GDP in Latvia to 0.78% of GDP in 
France.  In  the  six  countries  with  the  highest  expenditure  on  minimum  income  benefits 
(France,  Cyprus,  the  Netherlands,  Slovenia,  Germany  and  Denmark),  the  expenditure  on 
minimum  income  benefits  amounts  to  at  least  0.5%  of  their  respective  GDPs.  At  the  other 
end  of  the  scale  stands  Latvia,  Poland,  Bulgaria,  Czechia,  Romania,  Estonia  and  Hungary, 
where the budgetary expenditure on minimum income benefits is equal or less than 0.06% of 
their respective GDPs. 

National  mechanisms  for  setting  and  indexing  the  level  of  minimum  income  benefit(s) 
show shortcomings.  

While the majority of Member States have some mechanisms for establishing and adjusting 
the level  of benefits  in  place,  mechanisms  in  place differ across Member States  in terms  of 
parameters  and  the  frequency  of  adjustments.  In  a  few  Member  States  no  dedicated 
mechanism is applied and the level of benefits is set or adjusted on a subjective or arbitrary 
basis. Currently eight Member States use the calculation of the value of a basket of essential 
goods  and  services  as  a  reference  value  for  the  level  of  benefits  to  be  provided41.  Some 
Member States  use wages or income levels  as  reference parameters, others use pensions or 
pension index as reference. 

Ten  Member  States  have  automatic  indexation  systems  that  adjust  the  amount  of  the 
minimum  income  benefits  on  a  regular  basis  to  account  for  changes  in  the  costs  of 
living. Most of these automatic indexation systems are based on the inflation rate/variation of 
the consumer price index (CPI), as is the case in Belgium, France, Slovenia42 and Romania as 

41 Joint Social Protection Committee-European Commission report on minimum income, 2022. 
42 In Slovenia the minimum costs of living is estimated every six years. If the newly determined level of short-
term minimum costs of living is 15% (or more) higher than that the existing index, a new must be set.  

21 

 
 
 
 
                                                           
 
 
 
 
 
 
of  2022,  while  other  less  common  parameters  used  for  indexation  are  wages  (used  in 
Slovakia,  Denmark,  Netherlands).  Germany  implements  an  indexation  system  based  on  a 
weighted index including both prices and wages. Overall, the automatic indexation systems 
operate annually, with the exception of the Netherlands where minimum income benefits are 
updated  twice  a  year.  In  Luxembourg  a  raise  of  the  minimum  income  benefits  is  triggered 
when the CPI varies by 2.5% in relation to the figure triggering the previous adjustment. In 
Sweden, the adjustment is based on movements in consumer prices and living costs. 

As  the  academic  literature  highlights43,  Member  States  that  implement  indexation 
mechanisms to protect minimum income recipients against inflation perform better  in terms 
of  adequacy  compared  to  Member  States  who  do  not  implement  statutory  indexation 
mechanisms, especially  prior to the economic downturn beginning in 2007. However, these 
mechanisms  are  still  insufficient  in  bridging  the  gap  between  minimum  income  recipients’ 
disposable income, on the one hand, and prevailing poverty thresholds and living standards, 
on  the  other.  Even  in  Member  States  that  tie  their  indexation  to  the  average  wage  (which 
could  be considered  as  a form  of indexation leading to  higher adequacy), the benefits  were 
not  in  line  with  living  standards.  Overall,  academic  studies  have  found  that  even  though 
benefit  levels  have  increased  across  Member  States  in  real  terms,  there  is  a  decline  in  the 
benefit levels relative to living standards for minimum income beneficiaries44. 

Regular  indexation  of  minimum  income  benefits  based  on  predefined  indicators  is 
important to avoid further erosion of the adequacy of benefits.  

Sound and transparent methodology for adjusting income support at regular intervals, 
informed  by  relevant  indicators,  and  reviews  of  incentives  and  disincentives  resulting  from 
tax and benefit systems are necessary to keep the benefits in line with inflation and the cost of 
living. Member States also vary widely in the regularity with which they revise benefit levels 
and the criteria used.  

In  the  majority  of  the  Member  States,  the  levels  of  minimum  income  benefits  are  revised 
periodically  or  ad  hoc  to  ensure  that  the  level  of  benefits  reflect  the  changes  in  the  cost  of 
living. The frequency of reviews and the mechanisms in place, including the parameters used 
for the revision, differ substantially across Member States.  

Periodical  revisions  are  either  applied  on  an  annual  basis  as  part  of  the  state  budget 
preparation  or  other  less  frequent  political  activities.  The  revisions  are  linked  to  different 
parameters across Member States and the mechanisms are not automatically applied, which 
results  in  varying  levels  of  benefits.  Estonia,  Cyprus,  Lithuania  and  Poland  use  the  same 
basket of goods and services as used to establish the level of the benefits. Spain, Hungary and 
Austria use pensions or pension index (Finland) as reference. Some Member States use wages 

43  Mechelen,  Natascha  Van,  and  Sarah  Marchal.  "Struggle  for  life:  Social  assistance  benefits,  1992–
2009." Minimum income protection in flux. Palgrave Macmillan, London, 2013. 28-53.   
44  Nelson,  K.  (2012).  Counteracting  material  deprivation:  The  role  of  social  assistance  in  Europe.  Journal  of 
European Social Policy, 22(2), 148-163; and  Mechelen, Natascha Van, and Sarah Marchal.  "Struggle  for life: 
Social assistance benefits, 1992–2009." Minimum income protection in flux. Palgrave Macmillan, London, 2013. 
28-53. 

22 

 
 
                                                           
 
or income levels as reference parameters. The inflation rate/CPI is also a common parameter, 
as adopted in Cyprus (every 2 years) and Czechia (the benefits can be revised if the growth of 
the CPI for sustenance and personal needs exceeds 5 %). In Slovenia the minimum costs of 
living  is  estimated  every  six  years.  In  Sweden,  the  government  updates  the  national  scale 
rates  yearly,  based  on  movements  in  consumer  prices  and  calculations  of  reasonable  living 
costs  published  by  the  Swedish  Consumer  Agency,  but  ad  hoc  adjustments  may  also  occur 
for other reasons, for example to align benefits to movements in living standards in society as 
a whole, also made in close correspondence with the calculations of reasonable living costs. 

In a few cases, the adjustment of the level of minimum income benefits depends on political 
cycles  and  priorities,  and  availability  of  resources.  In  Bulgaria,  updates  follow  political 
cycles,  as  the  general  minimum  income  is  fixed  by  the  government,  based  on  available 
budgetary resources. In Greece, the regularity of reviews is not stipulated by the law, while in 
Hungary the amount of the benefit has remained virtually unchanged since 2008. In Italy, the 
amounts  have  not  been  reviewed  since  the  introduction  of  the  citizenship  income  in  2019. 
Similarly, the level of Portugal’s social insertion income was last updated in 2019. In some 
other countries, revisions to the minimum income level occur sporadically, such as the 2012 
and 2020 revisions in Czechia or the 2014 revision in Croatia.  

Adequacy of income support may be decreasing in real terms with increasing energy, food 
and housing prices. 

After  decades  of  price  stability,  the  Union  has  been  experiencing  steeply  increasing 
consumer prices from early 2021 onwards. Most recent Eurostat figures indicate that, as of 
March 2022, headline annual HICP inflation in the Union has reached 7.8%45. This level is 
much higher than former inflation levels and is similar – from a quantitative point of view – 
to  the  inflationary  episodes  of  the  1970s  (in  EU-15  countries)  and  1990s  (in  many  Central 
and Eastern Europe countries) that were the source of considerable social distress. Much of 
the current inflation is driven by increasing energy prices: these latter have risen by 40.2% at 
the  Union  level  between  March  2021  and  March  2022,  and  are  fueled  additionally  by  the 
Russian unjustified war in Ukraine and its collateral effects. Food represents another product 
category  that  exhibits  a  strongly  increasing  price  trend  (6.7%  annual  increase),  while  the 
costs  of  non-energy 
industrial  goods  (3.9%)  and  services  (3.3%)  have  remained 
comparatively stable so far. 

These trends are likely to disproportionately affect vulnerable consumers, lower income 
households and minimum income beneficiaries as the share of energy and food consumption 
in their overall incomes is generally higher than for the average population. The actual impact 
on  the  income  of  minimum  income  beneficiaries  will  very  much  depend  on  the  indexation 
features and on additional support that will be made available to the beneficiaries. 

Income  support  might  not  be  adequately  distributed  among  household  members,  as  the 
right to claim benefits is often limited to the head of the household. 

45 HICP - annual data (average index and rate of change) [PRC_HICP_AIND]. 

23 

 
 
                                                           
Solutions  facilitating  the  receipt  of  income  support  by  individual  members  of  the 
household can contribute to economic independence and income security of women and 
young  adults.  In  certain  Member  States,  the  right  to  benefit  receipt  is  an  individual  right 
(Belgium,  the  Netherlands,  Denmark  and  Austria),  while  in  some  others  the  receipt  of  the 
benefit  by  individuals  in  the  household  is  possible  (but  the  eligibility  remains  to  be 
determined at the household level). In Belgium, the right to social integration is an individual 
right, each cohabiting person can claim this right. When there is at least one minor child in 
the household,  the benefit is  adjusted by the dependent  family rate and each spouse is  paid 
half in  their own right.  In Cyprus, the spouse or  an adult child under the  age of 2846 could 
receive separately a proportion of the total benefit. In Denmark, social assistance is provided 
to an individual and not to a household, though the benefit level is affected by the income of 
the spouse. In the Netherlands, benefits are granted to individuals, and while the level of the 
benefit is adjusted to the living situation/family status, the income and assets of other adult 
members of the household do not affect it. In Finland, in certain situations, social assistance 
can  also  be  paid  separately  to  cover  individual  expenses.  In  Ireland,  the  minimum  income 
provisions are paid to individual claimants, while in case of couples they are based on a joint 
income assessment.  In  Malta, couples who have custody of  children can be paid  separately 
and the parent having the care and custody of the children will benefit from a higher weekly 
payment.  In  Sweden,  social  assistance  may  in  exceptional  cases  be  paid  to  children  –  for 
example,  where  there  is  domestic  violence  or  sexual  assault  in  the  household.  In  Austria, 
household members over 18 years of age are entitled to apply for benefits for themselves.  

3.2 Challenges related to the coverage and take-up of minimum income  

Minimum  income  benefits  are  provided  on  the  basis  of  administrative  criteria  and  means 
testing.    Member  States  typically  use  several  main  eligibility  criteria  for  their  minimum 
income  benefits,  with  the  most  frequent  combination  being  means-tested  income,  age, 
residency, receipt of/eligibility for other benefits, and employment activation.  

Gaps in the coverage by monetary benefits of people at-risk-of-poverty remain significant. 

In  the  Union,  around  34%  of  the  working  age  population  (18  –  64  years)  at-risk-of-
poverty  is  not  covered  by  any  social  benefits47  (including  minimum  income  benefits  and 
also other types of social benefits such as housing, child benefits and others). The coverage 
rate (benefit recipient rate) of social benefits among those who are at-risk-of-poverty ranges 
across  Member  States,  from  below  50%  in  Spain  and  Croatia  to  approximately  90%  in 
Denmark,  Finland,  France  and  Ireland.  This  means  that  in  the  worst  performing  Member 
States, around 50% of people at risk-of-poverty do not receive any monetary social benefits.   

Around  20%  of  those  who  are  at-risk-of-poverty  and  live  in  quasi–jobless  households 
(in the age group of 18 – 64) do not receive any monetary benefits48. Although this share 

46 In Cyprus, the age limit is 28 for eligibility of minimum income. 
47 Benefit recipient rate (minimum income benchmarking by the Social Protection Committee): 
https://ec.europa.eu/social/main.jsp?advSearchKey=bench_fram_minincom&mode=advancedSubmit&catId=22
&doc_submit=&policyArea=0&policyAreaSub=0&country=0&year=0#navItem-1 . 
48  All  data  included  in  this  paragraph  is  sourced  from  the  Joint  Social  Protection  Committee-European 
Commission report on minimum income, 2022. 

24 

 
 
                                                           
is  lower  than  among  those  who  are  at-risk-of-poverty,  it  suggests  that  minimum  income 
support  does  not  reach  a  significant  proportion  of  those  who  are  in  the  most  vulnerable 
situations. Since 2015, the coverage  rate of social  benefits  among those  who are at-risk-of-
poverty and live in quasi-jobless households has gradually increased, but heterogeneity across 
Member States in this respect remained high. Coverage remained below 60% in Romania and 
Croatia, while it has reached 95% in Ireland, Finland, France and Denmark.  This highlights 
that in  some Member States, close to  40% of people at-risk-of-poverty  and living in  quasi-
jobless households are not covered by any monetary benefit. Due to the recent introduction of 
national level minimum income in Greece, Italy and Cyprus, it should be noted that this share 
has potentially improved further since 2019 in some of these countries49. 

The  coverage  of  those  who  are  at  risk  of  poverty50  by  minimum  income  benefits51 
appears  even  more  heterogeneous  across  Member  States,  varying  from  2%  to  63%. 
Overall,  most  national  schemes  fail  to  cover  most  of  their  population  at-risk-of-poverty 
through  minimum  income  benefits,  with  only  four  countries  reaching  coverage  rates  above 
50%.  Countries  showing  the  highest  coverage  by  minimum  income  benefits  of  their 
population at-risk-of-poverty are France, Cyprus, Ireland, Slovenia and Finland, whereas the 
lowest coverage is observed in Poland, Estonia, Bulgaria and Latvia. In the worst performing 
countries, up to 90% of people at-risk-of-poverty do not receive minimum income benefits. 

Imperfect  targeting  of  minimum  income  benefits  might  be  indicated  by  two  different 
outcomes in terms of coverage. On one hand, not all people at-risk-of-poverty and in quasi-
jobless  households  are  covered  by  monetary  benefits.  Sometimes  this  relates  to  conscious 
policy  choices,  sometimes  it  reflects  undesirable  side-effects  of  difficulties  in  accessing 
minimum  income.  On  the  other  hand,  in  some  cases  (for  example  in  Cyprus,  Ireland  and 
Finland)52, minimum income benefits might reach a group of people who are not at-risk-of-
poverty.  This  could  reflect  some  imperfect  targeting  of  benefits,  but  it  could  as  well  be 
legitimate  in  some  cases,  e.g.  if  the  adequacy  of  benefits  is  close  to  the  poverty  threshold 
and/or that there  are  rules in  place allowing for  a  gradual  tapering of benefits  when people 
take up a job.  

The  extent  to  which  minimum  income  benefits  are  complemented  by  other  monetary 
benefits  (including  by  housing  benefits,  child  benefits  and  other  complementary 
benefits) varies to a great degree across Member States. One cluster of countries might be 
characterised  by  very  low  coverage  of  minimum  income  benefits  but  relatively  higher 
coverage  of  other  benefits  (for  example,  Malta  and  the  Baltic  states);  while  another  cluster 
might  be  characterised  by  relatively  high  coverage  of  both  (for  example  Finland,  Ireland, 
France). For more details see Annex 5. 

Additional  in-kind  benefits  and  services  might  be  provided  to  minimum  income 
beneficiaries,  depending  on  the  design  of  national  social  protection  systems.  These, 
among  others,  might  include  social  housing,  energy  supplements  (such  as  temporary 

49 It has also improved in Spain, though the indicator does not fully reflect the impact of the recent reforms. 
50 Almeida V., De Poli S., Hernández A., Technical note on a calibrated EUROMOD baseline for assessing the 
effectiveness of minimum income schemes in the EU, Joint Research Centre, 2022. 
51 As listed in Annex 1. 
52 For more details on each MS, see Annex 6. 

25 

 
 
                                                           
exemption from electricity price surcharge or heating checks), improving energy efficiency of 
housing,  contributions  to  out  of  pocket  payments  and  vouchers  for  healthcare,  public 
transport  (e.g.  travel  to  school),  food,  free  school  meals  or  childcare  (see  Chapter  3.4.  for 
more  details).  Among  such  in-kind  benefits  and  services,  the  most  common  ones  are  the 
various housing benefits. Some are targeted at persons with low income regardless of whether 
they  are  minimum  income  beneficiaries,  while  in  other  Member  States,  specific  housing 
allowances  are  available  for  minimum  income  scheme  beneficiaries/households.  In  a  few 
countries,  housing  schemes  are  set  up  at  local  level  following  criteria  of  eligibility  that  are 
more discretionary.  

A long duration of the application process might reduce coverage.  

The time needed to process the application provides an indication on how fast potential 
applicants  can  access  minimum  income.  In  seventeen  Member  States,  a  decision  on 
applicants’  eligibility  for the minimum  income benefits  is  assessed within 30 days from its 
submission. Examples for very short waiting time highlight that the administrative procedure 
can facilitate rapid access to benefits, such as within five working days in Estonia, 5-7 days in 
Finland, 10 days in Ireland and in general less than two weeks in Sweden. However, longer 
waiting  times  might  discourage  people  from  applying  for  benefits  and  in  five  countries 
(Austria, Hungary, the Netherlands, Slovenia, Spain) the maximum legal waiting period for a 
decision is longer than one month. In five other countries, the information on the length of the 
procedure  is  either  not  readily  available  or  appears  to  be  non-regulated  (Croatia,  Portugal, 
Cyprus), or it may vary due to local provision of the benefits (Germany, France).  

Some of the eligibility criteria based on income are likely to exclude groups of people at-
risk-of-poverty from minimum income benefits.  

Means  testing  conditions  have  a  direct  impact  on  the  coverage  by  minimum  income 
benefits.  Means  testing  assess  resources  (be  it  income,  assets,  real  estate  or  movable 
property)  of  all  household  members.  Typically,  the  income  threshold  varies  based  on 
household  size  and  whether  household  members  are  adults  or  children53.  The  underlying 
assumption  is  that  multi-person  households  share  their  resources  and  costs  (e.g.  housing 
space,  heating  bills)  equally  between  members.  When  earned  incomes  (or  other  benefits) 
increase, the additional income of the person/household is (partly) in principle deducted from 
the maximum amount due. Another important aspect of means testing relates to the type of 
incomes  which  are  taken  into  account–  the  more  incomes  are  excluded  from  the  means 
testing, the more likely it is that the adequacy improves and thus the coverage of the scheme 
increases.  

Countries  may  disregard  a  certain  amount/share  of  income  from  employment  when 
minimum income beneficiaries work, to support their transition to the labour market. 
Countries where such disregards are in place are Austria, Cyprus, Czech Republic, Denmark, 
Finland, Germany, Greece, Ireland, Lithuania, Luxembourg, Portugal, Slovakia and Sweden. 

53 Although when a household member is considered a “child” differs between Member States (also see  further 
on the threshold changing for more detailed children’s age brackets and overaged children typically above the 
age of 21 or 25). 

26 

 
 
                                                           
In these countries, the disregard for income from employment ranges between 20% and 35% 
of income from employment.  

In most Member States, it is possible for minimum income beneficiaries to combine very 
marginal  income from  work with minimum income benefits.  However, in  four Member 
States, the marginal incomes are not exempted when setting the benefit level of the household 
(Bulgaria,  Czechia,  Hungary  and  Romania).  In  these  cases,  income  from  work,  even  if 
marginal, results in withdrawal of the benefit54.  

Member  States  differ  in  whether  complementary  or  universal  social  benefits  are 
included as income in the means testing. There are fourteen Member States, which include 
income  from  social  benefits  in  the  means  testing  (though  there  are  exceptions  for  some 
specific cases). There are thirteen Member States in which social benefits are not disregarded, 
especially family allowances and child benefits.  

The time-span that is considered as the reference period for income or resources plays 
an important role in the extent to which ad-hoc and temporary income plays a role in 
the  means  testing.  Most  Member  States  consider  one  to  three  months  of  labour  income 
preceding  the  application.  Furthermore,  academic  research  shows  that  in  about  a  quarter  of 
cases  examined  in  Germany,  the  means  testing  do  not  accurately  represent  resources  for 
households  with  fluctuating  incomes,  including  from  self-employment.55  Such  challenges 
might  be  due  to  seasonal  variations  in  work  and  the  notion  that  taxes  are  based  on  the 
previous year rather than current income.  

Eligibility based on assets can be a point of friction in the application process.  

In  ten  Member  States,  owner-occupied  housing  is  explicitly  taken  into  account  in  the 
means  testing  (Austria,  Bulgaria,  Croatia,  Denmark,  France,  Greece,  Hungary,  Lithuania, 
Luxembourg, Sweden). In Portugal, Slovakia and Germany, this is up to a maximum value of 
the property.  In all other Member States, owner-occupied housing is not  taken into account 
by default, but in many cases, the decision whether taking into account the value of owner-
occupied property is at the discretion of the implementing authorities. When owner occupied 
housing is considered to exceed a specific value, applicants may be required to sell assets or 
take out a loan with these as security before receiving income support. To avoid such issues, 
in  some countries,  consideration is  given as to  whether it is  a  reasonable and proportionate 
request  to  liquidate  assets.  Applicants  for  Swedish  income  support  may  be  required,  for 
instance,  to  sell  their  house  and  move  to  a  less  expensive  place.  However,  the  general 
principle is that if the need for assistance is temporary, benefits are paid without considering 
this condition. In Denmark, to incentivise the sharing of living space, the means test for social 
assistance excludes rental income if the owner shares the property with a tenant. 

54  ERGO  Network,  Nov  2021,  Roma  access  to  adequate  minimum  income  schemes  in  Bulgaria,  the  Czech 
Republic,  Hungary,  Romania  and  Slovakia.  A  contribution  to  reducing  Roma  poverty  and  social  exclusion, 
accessed at: ergonetwork.org. 
55  Becker,  Irene  (2011):  Bewertung  der  Neuregelungen  des  SGB  II,  Methodische  Gesichtspunkte  der 
Bedarfsbemessung  vor  dem  Hintergrund  des  „Hartz-IV-Urteils“  des  Bundesverfassungsgerichts,  in:  Soziale 
Sicherheit Extra, Sonderheft September 2011.  

27 

 
 
                                                           
Moveable  assets  (jewellery,  vehicles,  art,  etc.),  as  opposed  to  non-moveable  ones,  are 
taken into account in almost all Member States; though the types of these included in the 
means testing differ. A car or other vehicle, for example, can be given considerable weight in 
some  means  testing.  The  inclusion  of  a  vehicle  in  the  means  testing  can  be  a  barrier  to 
employment and social inclusion, especially in rural areas. Financial assets, pension plans or 
accumulated  rights  to  a  pension  are  included  in  the  means  testing  in  some  countries  but 
exempted  in  others  (in  seven  Member  States  at  least,  these  are  taken  into  account). 
Accumulated  savings  are  also  considered  in  nearly  all  cases,  with  certain  minimum  level 
excluded.  At  the  same  time,  debt  is  equally  taken  into  account  in  many  (for  example  in 
Belgium and Croatia), but not all Member States.  

In  some  countries,  the  interactions  between  thresholds  for  the  total  value  of  assets, 
thresholds  for  specific  types  of  assets,  and  the  asset  disregard  are  complex,  making  it 
difficult  for  potential  applicants  to  judge  the  outcome  of  the  (often  lengthy)  application 
procedure. For example, in Portugal there are absolute thresholds for property and total assets 
including  moveable  assets  such  as  saving  bonds).  Benefits  are  not  paid  if  the  value  of  the 
property  owned  by  the  household  exceeds  60  times  the  reference  social  support  index 
(indexante dos apoios sociais, IAS), nor if the total value of assets exceeds this by 240 times. 
In addition, owner-occupied housing is  taken into account  only if its  total  net  market  value 
exceeds 450 times the IAS. If it does so, a relative threshold of 5% of the difference between 
the value of the property and the IAS is applied in the means testing. 

In some Member States, eligibility criteria based on age exclude young and elderly people. 

Minimum  income  benefits  can  be  granted  to  all  adults  in  eleven  Member  States,  while  the 
other sixteen Member States apply additional age restrictions for their  main minimum 
income benefits. It is worth emphasizing here that applying an age criterion may not mean 
that  a  specific  age  group  is  excluded  from  income  support  as  such,  but  rather,  that  other 
support (often dedicated complementary schemes at youth) are applicable. Out of the sixteen 
Member  States,  in  eleven,  the  minimum  age  is  18  or  lower  (Belgium,  Germany,  Greece, 
Hungary,  Ireland,  Malta,  Netherlands,  Poland,  Portugal,  Romania  and  Slovakia.)  In  five 
countries,  the  minimum  age  to  apply  for  the  minimum  income  benefit  is  higher  than  18 
(Cyprus,  Denmark,  France,  Luxembourg  and  Spain).  In  Denmark  the  minimum  age  is 
relatively  high  (30)  because  a  separate  scheme  for  younger  people  exists.  Cyprus  applies  a 
minimum  age of 28  years, while France and  Luxembourg of 25  years.  Finally, the Spanish 
general  minimum  income  benefit  and  other  regional  benefits  apply  a  minimum  age  of  23 
years.  

Regarding  maximum  age  requirements,  in  ten  Member  States  the  eligibility  criteria 
linked  to  the  maximum  age  of  the  applicant  refers  to  the  legal  retirement  age.  This 
means  that,  unless  categorical  schemes  are  at  place,  people  reaching  the  retirement  age  are 
not covered by last resort type of minimum income benefits in these Member States. 

Young adults (18-30 years) may be in a relatively disadvantaged position vis-à-vis older 
cohorts of the working age population. Even if they comply with the age criterion, young 
adults  are  less  likely  to  be  heads  of  households  and  thus  receive  benefits  directly.  Only  in 
some circumstances eligibility criteria are relaxed in this respect, such as in case of marriage 

28 

 
 
(Belgium,  Cyprus,  Spain),  single  parenthood  (Cyprus,  France),  caring  responsibilities  for 
(disabled)  child/children  (Belgium,  Luxembourg,  Spain),  other  caring  responsibilities 
(Luxembourg,  Spain),  pregnancy  (Belgium,  Luxembourg),  orphanage  (Cyprus,  Spain), 
disability or illness (Cyprus, Luxembourg), or victims of certain crimes such as gender-based 
violence (Spain).  

Eligibility requirements based on nationality and residency are stringent in some Member 
States. 

third  country  nationals  coming  from  outside 

In all Member States, national citizens and citizens of other Member States (depending 
on general rules for acquiring permanent residence) are eligible for minimum income. 
the 
The  residency  requirements  for 
Union/European  Economic  Area  vary  to  a  large  degree.  There  are  two  groups  of  Member 
States in this respect, one applies only permanent legal residency requirements to eligibility 
for  minimum  income  benefits  and  the  other  requires  a  qualifying  residency  period  beyond 
acquiring permanent legal residency. There is such a minimum length of additional residency 
requirement in twelve Member States (Austria, Belgium, Bulgaria, Cyprus, Denmark, France, 
Germany,  Italy,  Latvia,  Luxembourg,  Portugal,  Spain),  with  the  maximum  such  residency 
requirement being of ten years. This means that these countries require, in addition to having 
acquired permanent and legal residence status, a qualifying period of residence. In particular, 
Denmark  and  Italy  apply  the  most  stringent  residence  requirements  of  nine  and  ten  years, 
respectively.  In  Austria,  Bulgaria,  Cyprus,  France,  Luxembourg,  an  additional  qualifying 
period of five years is applied. Spain and Portugal require one year of additional qualifying 
period  of  residence  for  third  country  nationals.  For  Belgium,  Germany  and  Latvia,  the 
additional qualifying period of residence is three months.  

Asylum  seekers,  who  do  not  have  refugee  status  yet,  and  undocumented  migrants  are 
generally  not  eligible  for  minimum  income  benefits,  but  are  subject  to  categorical 
measures  (providing  typically  lower  levels  of  support).  Importantly,  the  residency 
requirements can also affect homeless people as although they may be eligible, they may face 
problems to demonstrate their residence. Since 24 February 2022, Russia’s military invasion 
of Ukraine has  created  a situation of flows  of displaced people fleeing from  Ukraine. On 4 
March  2022,  the  Council  unanimously  adopted  the Decision  giving  those  fleeing  war  in 
Ukraine the right to temporary protection, including a residence permit  and access to social 
welfare or means of subsistence if necessary. 

In  most  Member  States,  a  large  share  of  potential  beneficiaries  do  not  take  up  social 
benefits.  

The  non-take-up  of  benefits  appears  to  be  high  in  all  Member  States.  Low  actual 
coverage  rates  within  the  group  of  people  at-risk-of-poverty  can  be  explained  partly  by 
restrictive rules on eligibility, partly also due to low actual take-up rates within the population 
who would be eligible.  

29 

 
 
Available  estimates  of  non-take-up  typically  range  around  from  30%  to  50%  of  the 
eligible  population.  Eurofound56  (2015)  estimates  that  non-take-up  of  monetary  social 
benefits  ranges  between  approximately  25%  to  80%  in  fifteen  Member  States.  A  recent 
comparative  study57  provides  estimates  of  the  non-take-up  of  minimum  income  benefits  in 
four  Member  States  (Germany,  Belgium,  Finland,  the  Netherlands).  It  corroborates  results 
from  Eurofound  in  showing  that  non-take-up  of  minimum  income  benefits  typically  ranges 
around 30% to 50% of the eligible population.  

As part of their social safety nets and in addition to monetary benefits, Member States also 
provide services or benefits in-kind. While minimum income beneficiaries are likely to profit 
from those, they are not always integrated with minimum income and are not taken up by all 
minimum  income  beneficiaries.  Evidence  shows  that  the  take  up  of  some  services  (e.g. 
childcare) is lower for low-income households in spite of the additional support provided58. It 
is  key  that  access  to  benefits  and  services  is  ensured  within  the  comprehensive  design  of 
minimum income to avoid different levels of take-up of such in-kind benefits across regions, 
schemes and groups of beneficiaries.  

Non-take-up  of  benefits  might  be  explained  by  several  factors,  such  as  fragmented 
institutional systems of various benefits, lack of trust in institutions, lack of information, lack 
of  awareness  (or  misperceptions  about  the  entitlement  or  application  procedures),  long 
waiting period,  complexity of access (ability to find one’s way through the system, or ability 
to  travel  to  the  welfare  or  employment  office),  issues  in  access  to  digital  communications 
(inability to afford them or lack of skills to use them) to apply online to benefits and social 
barriers (stigma or perception of stigma – sometimes linked to the conditions tied to a benefit 
or to the application procedure). Additional barriers might be due to fragmented institutional 
systems,  language  barriers  and  potential  financial  resources  demanded  by  the  (sometimes 
long) application process. Finally, those that perceive the pay-off as uncertain, or their need 
for support to be temporary, may be more likely not to claim benefits.  

During the application process  vulnerable groups can face difficulties in obtaining the 
required  documentation  and  recognition  of  their  status.  In  addition,  complexity  may 
increase due to additional administrative requirements in the application process such as face-
to-face meetings and on-site reviews by social workers (home visits, or formal interviews in 
administrative  office)59.  Finally,  some  of  the  channels  of  communication  used  for 
administering the support (through telephone or only online, for example) are not necessarily 
best fit for use of people in vulnerable situations.   

When assessing the complexity of the application process, two factors need to be considered: 
the type of language used in the application form (how far it is legalistic in nature) and the 

56 https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1536en.pdf.  
57 Université Paris-Est Créteil / Université Gustave Eiffel - Direction de la recherche, des études, de l'évaluation 
et des statistiques (DREES). 
58  See  Commission  Staff  Working  Document  accompanying  the  document  Proposal  for  a  Council 
Recommendation establishing a European Child Guarantee, SWD (2021) 62 final. 
59 Visits at the applicant’s home is the case in Czech Republic and Poland, for example.  

30 

 
 
                                                           
number  of  supporting  documents  that  need  to  be provided60.  In  sixteen  Member  States,  the 
number  of  supporting  documents  requested  for  the  application  process  might  be  excessive 
and too difficult or costly to obtain for applicants: Austria, Croatia, Cyprus, Czech Republic, 
Denmark,  Estonia,  Finland,  France,  Hungary,  Italy,  Latvia,  Lithuania,  Netherlands,  Poland, 
Portugal, Romania, Spain (specific regional benefits). 

A better integration of different social benefits and services could improve the effective 
take-up  of  minimum  income.  In  some  cases,  the  multiplicity  of  benefits  and  services, 
different  administration  agencies  and  application  procedures  increases  the  complexity  of 
information  that  potential  claimants  need  to  be  aware  of  in  order  to  apply  for  benefits  (see 
also Chapter 3.5).  

Automation  in  granting  and  improved  data  exchanges  between  relevant  authorities 
could improve the uptake of social rights. There are various levels of automation possible, 
including the automatic identification and means assessment of potential beneficiaries; their 
automatic  enrolment  in  social  assistance  schemes;  as  well  as  automatic  assessment  of  their 
continued eligibility. Such automation could  shorten and streamline the  process  of  granting 
access to social rights and – by reducing the time spent in administrative tasks – enable social 
workers to target their efforts more efficiently. The TAKE project61 shows through Belgian 
case studies that the automatic identification of potential beneficiaries and the automation of 
take-up  significantly  increases  the  number  of  beneficiaries  who  actually  receive  social 
benefits to which they are entitled.  

3.3 Challenges related to inclusive labour markets and social inclusion   

Policies  and  institutions  promoting  inclusive  labour  markets  aim  at  facilitating  access 
and a return to employment, especially for those who are the most disadvantaged. Inclusive 
labour  markets  result  from  positive  interactions  between  activation  policies,  labour  market 
institutions  that  prevent  segmentation  and  limit  entry  barriers,  and  well-designed  tax  and 
benefits systems. 

The  labour  market  situation  of  minimum  income  beneficiaries  varies  significantly 
across Member States. Comparative evidence on the labour market attachment of minimum 
income  recipients  is  scarce  since  this  requires  the  availability  of  harmonised  data  sources. 
Available  estimates  based  on  EU-SILC  indicate  that  on  average  in  the  Union,  around  one 
third  of  minimum  income  beneficiaries  have  some  kind  of  labour  market  attachment, 

60  High  administrative  costs  is  identified  as  a  key  driver  for  non-take  up  of  minimum  income  benefits  in  the 
literature;  see  for  example  Hümbelin,  O.  (2016).  Nichtbezug  von Sozialhilfe:  Regionale  Unterschiede  und  die 
Bedeutung von sozialen Normen. University of Bern Social Sciences Working Paper No. 21/2016. Information 
costs to understand the language of a form to be filled was identified as a driver of non-take up, see for example 
Eurofound (2015). Access to Social Benefits: Reducing Non-Take-Up. Luxembourg: Publications Office of the 
European Union. 
61  Lefevere,  Goedemé,  de  Wilde  and  De  Spiegeleer  (2019)  ‘Nonrecours  à  l'intervention  majorée  et  octroi 
automatique de droits : aperçu et étude de cas’, Revue belge de sécurité sociale, 2(2019), p. 251-284. 
 Van Gestel, Goedemé, Janssens, Lefevere and Lemkens (2022) ‘Improving take-up by reaching out to potential 
beneficiaries:  insights  from  a  large-scale  field  experiment  in  Belgium’  in  Journal  of  social  policy. 
https://doi.org/10.1017/S004727942100088X. 

31 

 
 
                                                           
even if it can be weak (at least some hours worked registered over the past year). Overall, the 
available data indicate that the job exit rate62 is rather low, at around 15%, varying between 
3% in Romania and 29% in Estonia. At the same time, between 60%-70% of the beneficiaries 
are  not  employed  throughout  a  year.  Job  counselling,  individual  action  plans  and  the 
integration  of  activation  measures  into  minimum  income  have  a  positive  effect  on  the 
likelihood of beneficiaries’ successfully entering employment63. While direct jobs experience 
might  also  have  a  positive  effect,  it  is  relatively  more  costly  than  job  counselling  and 
individual action plans. 

The  role  of  the  social  economy  is  instrumental  to  facilitate  employment  opportunities  for 
minimum income beneficiaries. Employment in the social economy could be a stepping stone 
towards  attachment  to  the  open  labour  market.  According  to  the  social  economy  action 
plan64,  2.8  million  social  economy  entities  in  the  Union  employ  some  13.6  million  people. 
The action plan confirms that there is untapped economic and job creation potential for the 
social economy in several Member States and regions, which could contribute to social and 
labour-market  inclusion  of  people  in  vulnerable  situations.  It  also  complements  efforts  to 
integrate young people and disadvantaged groups (e.g. persons with disabilities, older people, 
long-term  unemployed,  persons  with  a  migrant,  minority  racial  or  ethnic  background  - 
particularly Roma -, single parents) into the labour market and in society at large. 

A  large  number  of  minimum  income  beneficiaries  does  not  participate  in  active  labour 
market policy measures. 

Active  Labour  Market  Policies  (ALMP)  encompass  a  range  of  measures:  special  support 
for job  search training and education for the unemployed and inactive;  job  rotation and job 
sharing; employment incentives and subsidies for taking up jobs; and job creation activities 
such as community work programmes. 

Evidence  suggests65  that  a  large  proportion  of  minimum  income  beneficiaries  are  not 
subject to ALMP measures, even though they might be capable to work. From those who 
are registered in Public Employment Services (PES), in some Member States, less than 15% 
of  beneficiaries  are  participating  on  an  active  labour  market  policy  measure66.  Minimum 
income  beneficiaries  are  less  likely  to  benefit  from  ALMP  measures  compared  to  the 
recipients of unemployment benefits. According to data for 2020 from the EU Labour Market 
Policies database, the labour market activation rate was lower for long-term unemployed than 
for  all  registered  unemployed  in  twelve  of  the  seventeen  countries  for  which  data  was 
available for both groups. This is despite the fact that the long-term unemployed have greater 

62 Job exit rates show the share of participants in a given labour market activation programme who successfully 
transition to employment from benefit receipt. 
63 European Commission, Study about the Methodology to Measure the Returns on Investment from Integration 
Social Assistance Schemes, 2020. 
64 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions ‘Building an economy that works for people: an action 
plan for the social economy’, COM(2021) 778 final. 
65 ’Exploratory study: filling in the knowledge gaps and identifying strengths and challenges in the effectiveness 
of EU Member States’ minimum income schemes, prepared by ICF/Applica 2022. 
66 In the social assistance schemes of EL, HR, IT, LT, LU, FI and in the basic income support for jobseekers in 
DE. 

32 

 
 
                                                           
need  for  retraining  and  other  ALMP  measures,  as  emphasised  by 
Recommendation on the integration of the long-term unemployed in the labour market67. 

the  Council 

Job search is often a precondition to receiving the minimum income benefit. 

Minimum  income  recipients  are  expected  to  engage  in  job  search  and  improve  their 
employability  prospects  in  exchange  for  receiving  employment  services  and  benefits. 
Sanctions for non-compliance with activation requirements are common in nearly all Member 
States, although many countries take remedial actions prior to applying them. The sanctions 
can include exclusion from the unemployment register and a requirement to re-apply for the 
minimum  income  benefits  (in  nineteen  Member  States68),  or  a  temporary  suspension  of  the 
benefit  (in  nine  Member  States69).  In  just  over  half  of  the  Member  States70  the  complete 
suspension  or  withdrawal  of  access  to  minimum  income  appears  to  be  the  only  type  of 
sanction  available,  which  results  in  a  severe  impact  on  the  beneficiary  in  terms  of  loss  of 
income.  

Incentivizing  to  more  active  job-search,  together  with  availability  of  a  wider  range  of 
jobs,  leads  to  increased  employment.  Overall,  the  results  suggest  that  positive  incentives 
and supportive elements, providing claimants with the resources they need to effectively look 
for  work,  are  more  effective  than  sanctions71.  The  nature  of  the  different  sanctions  for  not 
participating  in  ALMP  measures  applied  across  Member  States  suggests  that  there  is  a 
balance to be struck for the sanctions not to be too moderate (in the sense that they impose 
some requirements) and - at the same time - not to be too strict (in the sense that they do not 
excessively  sanction  non-compliance).  For  example,  in  certain  countries  the  sanctions  have 
progressive  character  reflecting  the  severity  of  non-compliance;  in  some  cases  family 
composition  is  taken  into  account  so  as  to  protect  children.  Another  challenge  is  the 
availability  of  targeted  ALMP  measures  for  the  minimum  income  beneficiaries  taking  into 
account their particular needs and barriers. Special attention needs to be paid to young adults, 
outside of the labour market or being at-risk-of-poverty or social exclusion. To get them back 
into education, training or the labour market within the shortest time possible, the conditions 
to  receipt  of  income  support  should  be  strongly  linked  to  strong  activation  measures 
supporting  them  in  gaining  relevant  work  experience  and  developing  the  right  skills  for  a 
changing world of work, in particular those relevant to the green and digital transitions. 

Labour market relevance of certain support is not always adequate. 

Conditioning the right to minimum income benefits to participation in ALMP measures 
associated  with  low  job  exit  rates  does  not  typically  lead  to  sustainable  employment 
outcomes.  Some  Member  States  organise  public  works  or  similar  direct  job  creation 

67 In February 2016 the Council adopted the Commission's proposal for a recommendation on the integration of 
the long-term unemployed in the labour market. 
In April 2019 the Commission adopted the report on the implementation of the Council recommendation taking 
stock of progress made. 
68 BG, CZ, DK, EE, EL, FR, HR, IT, CY, LV, LT, LU, HU, MT, PL, PT, RO, SI and SE. 
69 In BE, DK, EE, IE, ES, NL, AT, RO and FI. 
70 BG, CZ, EL, ES, HR, IT, CY, LV, LT, HU, MT, PT, RO and SI. 
71 See: OECD (2020): ‘How demanding are activation requirements for job seekers?’. 

33 

 
 
                                                           
measures  for  minimum  income  beneficiaries,  participation  in  which  is  either  obligatory  or 
incentivised  financially.  It  is  the  case  in  Slovakia,  Croatia,  Czechia,  Hungary,  Latvia, 
Luxembourg and Poland. Some of these countries appear to use sanctions should applicants 
refuse to participate in public works72, including the termination or temporary suspension of 
the benefit(s). In Slovakia, for example, participation in public works for at least 64 hours per 
month  is  obligatory  for  minimum  income  beneficiaries  (if  deemed  fit  for  work).  The 
corresponding activation allowance might appear to be a top-up but is in practice an integral 
part of the benefit, without which the basic amount of benefit is highly inadequate.  

Academic research shows low effectiveness of public works schemes in  terms of providing 
long–term  sustainable  transitions  to  regular  employment  for  participants73.  Monitoring  the 
situation  of  the  clients  once  they  exit  PES  registry,  including  post-placement  support  is  a 
practice  applied  only  to  a  limited  extent  in  Member  States74,  even  though  adequate 
monitoring is seen as a factor contributing to the combating of in-work poverty75.  

Only  in  less  than  half  of  the  Member  States  minimum  income  beneficiaries  undergo 
comprehensive needs assessments.  

Comprehensive  needs  assessment  aims  at  putting  forward  targeted  measures  and 
services  to  individuals,  also  covering  non-financial  barriers  to  social  inclusion  and  labour 
market  integration.  Multidimensional  needs  assessment  is  considered  to  be  a  first  step 
towards social inclusion and subsequent labour market integration for those who can work.  

There  are  no  common  standards  on  the  timing  or  the  elements  of  multidimensional 
needs assessments.  While in principle such assessments are used, their scope and the level 
of  depth  vary  considerably  across  Member  States.  Typical  dimensions  assessed  include 
applicants’  housing  situation,  health  and  income  status,  communication  skills,  professional 
skills,  trainings,  and citizenship. Such assessment  is  carried out  in twelve Member States76. 
Eight Member States implement such assessment partially, for example for certain groups, or 
at  a  discretion  of  a  municipality77.  In  some  Member  States78  where  a  multidimensional 
assessment is carried out, there is some indication that a certain level of discretion exists  in 
terms of whether an assessment is carried out and the extent of this. For example, in the case 
of the guaranteed minimum benefit in Croatia, the needs assessment is at the discretion of the 
case workers in the Centres for Social Welfare, while in the case of monthly social assistance 
allowances in Bulgaria, it is provided on an ad-hoc basis at the discretion of the local social 

72 BG, LT and SK. 
73 Card, D; Kluve, J; and Weber, A.; 2015. What works? A meta analysis of recent active labor market 
programs. IZA Discussion Paper No.9236. 
74 European Network of Public Employment Services, Integrated services for long-term unemployed, 2020. 
75 European Commission, In-work poverty in Europe, A study of national policies, 2019. 
76  BE  (Integration  income),  CY  (Guaranteed  Minimum  Income),  DK  (Social  assistance),  EE  (Subsistence 
benefit),  FI  (Social  assistance),  DE  (Subsistence  benefit  and  Basic  income  support  for  jobseekers),  EL 
(Guaranteed Minimum Income), LV (Guaranteed minimum income benefit), LU (Social inclusion income), PL 
(Periodic Allowance), PT (Social minimum income), SE (Social assistance - livelihood support).   
77 BG (Monthly social assistance allowances), HR (Guaranteed minimum benefit), FR (Active solidarity 
income), IT (Guaranteed Minimum Income), LT (Social assistance benefit), NL (Participation Act), RO (Social 
Aid for ensuring the Guaranteed minimum income), SI (Cash Social Assistance). 
78 BE, BG, HR, DK, FR, DE, RO. 

34 

 
 
                                                           
directorate. In seven Member States, the needs assessment is not carried out79. Furthermore, 
in  seven  Member  States  only  an  assessment  to  determine  individuals’  fitness  to  work  is 
conducted80.  

In  many  cases  the  multidimensional  assessment  is  either  partially  or  fully  distinct  from  the 
relevant  employability  assessment  carried  out  for  minimum  income  recipients.  Partial 
overlaps are those where the assessment includes some employability factors or is effectively 
an extension of an existing employability assessment. An example of such a case is  that of 
cash social assistance in Slovenia where an assessment encompassing both employability and 
social issues is carried out as soon as the benefit are granted and a further separate assessment 
focusing more on social needs is subsequently carried out for long-term unemployed. 

In the majority of cases, the assessment is performed within a month from submitting 
an application for granting minimum income benefits. For example, in Greece, assessment 
takes  place  shortly  after  applying  for  minimum  income  benefits  and  as  soon  as  available 
resources  allow,  while  in  Poland  assessment  usually  takes  place  within  14  days,  but  it  is 
conducted within two days in urgent cases. However, in some countries, the waiting time is 
longer, or varies across municipalities.  

Only  in  about  half  of  the  Member  States  minimum  income  beneficiaries  receive  an 
inclusion plan.  

While there are no common standards with regard to the provision of an individualised social 
inclusion  plan  to  minimum  income  beneficiaries,  ideally  such  plan  should  define:  the 
objectives and timeliness of the plan, mutual rights and obligations of beneficiaries and the 
relevant authorities as well as a package of tailored support measures. It should also assign a 
case  manager  for  each  beneficiary.  Only  in  about  half  of  the  Member  States  the  relevant 
authorities prepare such plans. 

Although,  in  principle,  the  inclusion  plans  should  also  cover  a  broad  range  of  enabling 
services, the most commonly supported services are healthcare and childcare. Certain plans 
offer specialised social services, including counselling and mediation, psychological support 
or  rehabilitation.  Participation  in  services  outlined  in  the  plan  is  in  the  majority  of  cases 
obligatory,  but  in  some  cases  it  is  voluntary  or  it  differs  across  municipalities.  Targeted 
provision of services is based, to a large extent, on the content of social inclusion plans. In the 
absence of such plans, provision of these services is a discretionary decision from the side of 
relevant authorities or a case worker. 

In accordance with the Council Recommendation on the integration of long-term unemployed 
into  the  labour  market,  job  integration  agreements  should  be  based  on  a  comprehensive 
needs-assessment  and aim  at  facilitating access  of the long-term unemployed to  sustainable 
employment  and  quality  services.  Yet,  eleven  Member  States  still  do  not  offer  such 
agreements  for  the  long-term  unemployed.  Whilst  in  principle,  labour  market  activation,  or 

79 It is not carried out in AT, CZ, IE, MT, HU, SK and ES. 
80 DK, EE, FR, LU, PL, SE, SI. 

35 

 
 
                                                           
job integration agreements for those who can work should be integral to  minimum income, 
the extent to which these are applied in practice varies considerably across Member States.  

Personalised support could be further strengthened through case management, whereby 
beneficiaries have a stable and single point of contact  - a case manager - who assists them, 
oversees  their  situation,  carries  out  and  follows-up  on  corresponding  referrals  to  services. 
Although  the  need  for  case  management  function  has  been  increasingly  recognised,  only  a 
limited number of Member States implemented this practice. In the Netherlands, for example, 
the  case  managers  are  well  informed  about  the  situation  of  their  clients,  and  capable  of 
providing effective support. However, given the lack of a common framework, the approach 
varies substantially across local municipalities. In other countries (for example, in Lithuania), 
a case-management approach is being tested in the context of needs assessment. It is essential 
that such an approach is based on protocols and common assessment frameworks, otherwise 
it risks being discretionary and dependant on the availability of human resources.  

Not all Member States have an effective system of tapering benefits when work is taken up. 

On top of ALMP measures facilitating taking-up employment, it is essential that work pays. 
Making work pay is both a matter of fairness (ensuring that transitions to work translate into 
higher  incomes)  as  well  as  effectiveness  (ensuring  that  incentives  to  work  are  positive). 
Available evidence on the impact of monetary incentives for minimum income beneficiaries 
is scarce as it requires the availability of data on their labour market situation over time.81  

As  discussed  in  Chapter  3.2,  the  absence  of  a  significant  positive  impact  of  financial 
incentives on labour market transitions of minimum income beneficiaries highlights that their 
barriers to labour market participation are multiple and broader than the monetary dimension 
only. Available evidence82 shows that people who are furthest away from the labour market 
often face other obstacles that can actually have a much stronger impact on their access to the 
labour  market,  such  as  low  or  not  matching  skills,  the  overall  availability  of  jobs  or  job 
counselling83.  

Overall, across the Union, minimum income benefits continue to be paid during participation 
in  ALMP  measures,  a  practice  which  ensures  continuity  in  minimum  income  benefits  as  a 
source of income for recipients.  

Furthermore, in many Member States84, minimum income benefits continue to be paid 
when recipients take up employment, provided that their income remains below a threshold 
explicitly  set  out  in  eligibility  criteria  or  implicit  in  the  calculation  of  the  benefit  amount, 

on 

from 

integrated 

81 See ESDE 2020 (https://data.europa.eu/doi/10.2767/478772) and Study about the methodology to measure the 
returns 
(2020)  
social 
investment 
(https://data.europa.eu/doi/10.2767/716458). 
82  See  for  instance  OECD  faces  of  joblessness,  Faces  of  Joblessness  -  Towards  People-centred  Employment 
Support - OECD.  
83 See ESDE 2020 (https://data.europa.eu/doi/10.2767/478772) and Study about the methodology to measure the 
returns 
(2020)  
social 
investment 
(https://data.europa.eu/doi/10.2767/716458). 
84 BE, CZ, DK, DE, EE, IE, EL, FR, HR, IT, CY, LU, NL, AT, PT, RO, SI, FI and SE. 

integrated 

assistance 

assistance 

schemes: 

schemes: 

report, 

report, 

from 

final 

final 

on 

36 

 
 
                                                           
and/or the amount of work they perform (in terms of working hours or equivalent measures 
of  work  intensity)  does  not  exceed  a  particular  threshold.  Take  up  of  employment  is 
incentivised by ensuring that overall income is substantially higher upon starting work. This 
is achieved in two different ways. A first approach85 is to exempt part of income from work 
from means-testing or the calculation of minimum income benefits, often for a fixed period. 
For  example,  in  the  case  of  the  subsistence  benefit  in  Estonia,  a  beneficiary  who  has  been 
receiving  the  benefit  for  at  least  two  months  and  starts  work  has  100%  of  their  income 
excluded from the means-test for the first two months and then 50% for the next four months. 
A  second  approach86  is  to  continue  the  minimum  income  benefits  for  a  fixed  period  with 
tapering  of  the  amount  over  time.  This  approach  may  be  most  pertinent  in  cases  where 
minimum  income  benefits  are  fixed  amounts  and  not  based  on  income.  For  example,  in 
Malta, after starting work, a minimum income beneficiary receives 65% of the benefit during 
the first year, 45% during the second and 25% during the third.  

In most cases, however, the type and duration of employment (whether it is temporary 
or long-term, and whether it leads to an open-ended form of employment) is not taken 
into  account.  In  the  majority  of  countries  where  there  is  the  possibility  of  continuing  to 
receive  minimum  income  benefit  once  a  recipient  becomes  employed,  the  character  of  the 
employment is not explicitly taken into consideration but the level of income it provides (e.g. 
whether  it  is  probational,  short-term,  irregular,  stable,  etc.).  Based  on  the  information 
available,  there  are  only  four  countries  (Ireland,  Italy,  Romania  and  Slovenia)  where  other 
characteristics  explicitly  impact  on  the  payment  of  minimum  income  benefits:  In  Ireland 
continued  payment  relies  on  working  days  not  exceeding  a  particular  threshold,  in  Italy 
different  rules  apply  to  those  who  become  self-employed,  in  Romania  continued  payment 
applies  only  when  the  employment  contract  has  a  duration  of  at  least  24  months,  and  in 
Slovenia,  only  income  from  casual  or  occasional  work  is  (partially)  excluded  from  means-
testing.  However,  it  should  be  acknowledged  that  income-related  means  testing  thresholds 
which take account of income from work implicitly ensure that minimum income benefits are 
retained  during  participation  in  short-term  irregular  employment  simply  because  such  work 
does not tend to generate a high level of income. For example, in the case of social assistance 
in  Finland,  income  up  to  150  Euro  per  month  has  no  impact  on  minimum  income  benefits 
while any income above results in an equivalent reduction in benefit amount. 

In-work poverty remains a persistent challenge.  

In-work poverty, that is the share of persons who are at work and have an equivalised 
disposable income below the at-risk-of-poverty threshold, stood in 2020 at 7,3%87 in the 
Union. This highlights that further efforts are needed to ensure that work pays, both through 
ensuring adequate wages as well as through introducing cautiously designed welfare systems 
in which income support is tapered gradually.  

Gradual  phasing  out  of  minimum  income  benefits  with  earned  income  prevents  work 
disincentives. However, it is important to note that minimum income benefits do not operate 

85 In BE, EE, EL, IT, LT, NL, AT, SI, FI and SE. 
86 In HR, LT, LV, MT, PL and RO. 
87 Eurostat: indicator code: sdg_01_41. 

37 

 
 
                                                           
in  isolation  and  that  in-work  benefits  and  the  tax  system  play  an  equally  important  role  in 
determining  the  monetary  impact  of  moving  from  minimum  income  benefits  to  work.  The 
Impact Assessment accompanying the proposal for a Directive on adequate minimum wages 
also underlines that the income gain from a certain increase in the minimum wage is likely to 
be the highest when taxes paid by minimum wage earners are low or when benefits are not 
withdrawn.  It  also  highlights  that  increased  minimum  wages  are  expected  to  contribute  to 
reducing wage inequality and in-work poverty. 

3.4. Challenges related to effective access to enabling and essential services 

Ensuring  effective  access  of  minimum  income  beneficiaries  to  enabling  and  essential 
services  supporting  employment  and  social  integration  remains  a  challenge  in  many 
Member  States.  While  an  exhaustive  list  of  enabling  services  cannot  be  drawn,  they 
typically  include  general  enabling  services  provided  to  everyone,  such  as  early  childhood 
education  and  care,  training  and  education,  healthcare,  and  long-term  care.  A  specific 
category  of  enabling  services  -  social  inclusion  services  -  encompasses  targeted  services 
addressing specific problems and barriers of those furthest away from the labour market.  

Access  to  enabling  services  is  not  only  a  necessary  precondition  of  successful  employment 
and social participation, but it also contributes to adequate standards of living and combating 
in-work  poverty88.  For  example,  childcare  is  a  positive  determinant  of  beneficiaries’ 
successful transitioning to employment89.  

Provision of social inclusion services remains a challenge in many Member States. 

People  experiencing  severe  disadvantages  require  comprehensive  assistance  often  during 
longer periods. Such assistance entails comprehensive, integrated and pro-active approaches 
supported  by  social  inclusion  services  (including  social  work,  counselling,  coaching, 
mentoring,  psychological  support  and  rehabilitation).    One  of  the  common  challenges  is 
insufficient  funding  that  does  not  allow  for  adequate  numbers  of  personnel  to  provide 
services  for  all  those  in  need.  This  was  particularly  problematic  during  the  COVID-19 
pandemic  when  social  services  had  to  cope  with  an  increase  in  service  users.  The  lack  of 
qualified personnel is aggravated by working and pay conditions.  

A Voluntary European Quality Framework for Social Services90 was prepared in 2010 by 
the Social Protection Committee to identify quality principles that these services should fulfil. 
It  has  been  designed  as  a  reference  for  defining,  assuring,  evaluating  and  improving  the 
quality of these services (incl. cooperation among various providers and authorities). It covers 
general  principles, 
continuity, 
comprehensiveness  and  focus  on  outcome.  While  the  principles  of  the  Framework  are  still 

affordability, 

accessibility, 

availability, 

such 

as 

88 European Commission, In-work poverty in Europe, A study of national policies, 2019. 
89 European Commission, Study about the Methodology to Measure the Returns on Investment from Integration 
Social Assistance Schemes, 2020. 
90  Social  Protection  Committee  (2010).  A  VOLUNTARY  EUROPEAN  QUALITY  FRAMEWORK  FOR 
SOCIAL  SERVICES. 
at: 
SOCIAL  PROTECTION  COMMITTEE/2010/10/8 
https://ec.europa.eu/social/main.jsp?langId=en&catId=794 . 

final.  Available 

38 

 
 
                                                           
relevant,  its  implementation  has  been  uneven  across  the  Member  States  and  the  service 
providers at the local level are often less informed about its content91.  

Many  minimum  income  beneficiaries  face  problems  with  access  to  healthcare,  childcare 
and adequate housing. 

In  spite  of  the  provision  of  services  (and  in-kind  benefits)  to  minimum  income 
beneficiaries, there are significant gaps in the coverage of needs for housing, childcare, 
healthcare  and  other  enabling  services.  A  combination  of  various  barriers  –  high  costs, 
deprived  neighborhood,  limited  availability  –  might  lead  to  a  ‘social  gradient’  in  access  to 
services.  Research  has  shown  that  such  services  are  more  intensively  used  by  people  with 
higher educational attainment, reinforcing inequalities92. There is significant variation in the 
way  in  which  Member  States  support  access  to  enabling  services  and  the  extent  to  which 
minimum income is associated with these. 

Regarding healthcare, in the majority of Member States, free-of-charge minimum healthcare 
services are available to minimum income beneficiaries. However, there are often significant 
limitations as, for example, out-of-pocket costs for households to access care are prohibitive 
or  waiting  lists  apply  for  healthcare  accessible  to  low  income  groups.  Only  few  Member 
States  put  in  place  additional  benefits  that  can  provide  support  for  chronical  disease  costs, 
additional  medical  costs  not  covered  by  the  health  insurance  or  specific  one-off  costs 
(hospital treatment or pharmaceutical products).  

Though  the  gap  (between  persons  under  and  above  the  poverty  threshold)  in  self-reported 
unmet  needs  for  medical  examination93  has  declined  over  the  past  years,  reaching  3.4 
percentage points in 2020, there are some Member States where this gap remains relatively 
high  (such  as  Greece,  Latvia,  Belgium,  Slovakia,  Bulgaria  and  Portugal).  The  gap  is 
relatively  low  (less  than  1  percentage  point)  only  in  a  few  Member  States  (for  example, 
Spain, Czechia and Germany). 

A  lower  proportion  of  children  at  risk  of  poverty  or  social  exclusion  benefit  from  formal 
childcare than their better-off peers94. This is despite the fact that family and child benefits 
(or  specific  childcare  vouchers)  are  available  in  most  Member  States  for  households  with 
children.  They  are  often  available  universally  (like  in  Estonia,  Hungary,  Italy,  Latvia, 
Luxembourg, Lithuania, the Netherlands, Sweden and Poland), or are targeted at households 
with low income. In some Member States (Italy, Lithuania and, Netherlands), the amount of 
the benefit is linked to the income of the household, with lower income households receiving 
higher benefits.  Additional  supports are provided to  families with  children to  improve their 

91 European Commission, Study on social services with particular focus on personal targeted social services for 
people in vulnerable situations, 2022. 
92 Employment and Social Development in Europe, 2013. 
93 Possible reasons: too expensive or too far to travel or waiting list. Gap in p.p. between the share of individuals 
(18-64) at risk of poverty from (quasi-)jobless and the share of individuals (18-64) not at risk of poverty from 
non-(quasi-)jobless 
Source:  
https://ec.europa.eu/social/main.jsp?advSearchKey=bench_fram_minincom&mode=advancedSubmit&catId=22
&doc_submit=&policyArea=0&policyAreaSub=0&country=0&year=0#navItem-1.  
94  Eurostat ilc_ats01. 

households. 

39 

 
 
                                                           
integration  in  education  (school  meals,  educational  material,  etc.)  or  for  social  activities 
(sports, cultural activities). 

Regarding  housing,  the  gap  (between  persons  under  and  above  the  poverty  threshold)  in 
housing  cost  overburden95  rate  stands  at  33  percentage  points,  highlighting 
the 
disproportionate cost of housing for those at risk of poverty or social exclusion96.  

Access to essential services can also be problematic. 

In some Member States minimum income is implicitly or explicitly designed to support 
access  to  essential  services.  With  increasing  energy  costs,  the  support  to  utility  costs  is 
gaining  importance.  In  Austria  and  Poland,  this  support  can  cover,  on  an  ad-hoc  basis, 
additional expenses, such as repairs or buying new household appliances. In Sweden, social 
assistance  benefits  are  divided  into  a  first  part  covering  consumption  items,  and  a  second 
covering ‘reasonable  costs for housing’, which are determined locally by  the municipalities 
and  include  energy,  water  and  sanitation.  The  amount  of  the  German  minimum  income 
benefits  under  Social  Code  Books  II  and  XII  are  based  on  cost  components  which  include 
also  items  related  to  the  individual  essential  services.  In  other  Member  States,  support  to 
access to essential services is provided mostly through specific measures addressed to each of 
the  services  separately,  mainly  via  reduced  tariffs,  cost  reimbursements  and  dedicated  cash 
benefits. In some cases, the threshold used to assess eligibility is the same as the one used for 
minimum  income  or  being  a  minimum  income  beneficiary  automatically  grants  access  to 
these  “service-specific”  schemes.  For  example,  In  Vienna  (Austria),  persons  receiving 
minimum income are entitled to subsidised public transport. In Belgium, the social tariff on 
mobile telephone and internet access automatically applies to minimum income beneficiaries. 
In Italy, being a beneficiary of the minimum income grants automatic access to the water, gas 
and electricity bonuses. 

3.5 Challenges related to governance mechanisms  

There is large variation in the level of cooperation between authorities in charge of income 
support, employment services and social services. 

A  degree  of  variation  can  be  observed  across  Member  States  regarding  the  levels  of 
governance  responsible  for  the  financing  and  implementation  of  minimum  income.  Most 
countries rely on financing at the national level, with funds originating in the central budget. 
A smaller number of countries have mechanisms in place for funds to be drawn directly from 
sources  at  the  local  level  where  minimum  income  is  provided.  In  Austria,  the  financing  is 
governed regionally, although basic common features are defined across provinces to ensure 
a certain degree of uniformity. Some Member States, such as France and Spain, have a more 
complex  set  of  schemes,  with  financing  of  some  schemes  by  the  central  government  and 
others  being  funded  regionally  or  locally.  In  the  case  of  Croatia,  the  minimum  income  is 

95 The housing cost overburden rate is the percentage of the population living in households where the total 
housing costs ('net' of housing allowances) represent more than 40 % of disposable income ('net' of housing 
allowances). 
96 For a detailed analysis on the gap in housing cost overburden indicator, see Annex 7. 

40 

 
 
                                                           
financed  nationally,  while  allowances  for  housing  and  heating  costs  for  the  poorest 
households are paid by local and regional self-government units. 

Effective  governance  of  the  implementation  of  minimum  income  requires  a  strong 
coordination  of  different  stakeholders.  A  national  regulatory  framework  ensuring 
standardisation  of  the  provision  of  minimum  income  (such  as  means  testing,  eligibility 
criteria, activation conditions, provision of social services) contributes to alleviating regional 
differences.  At  the  same  time,  horizontal  coordination  among  relevant  service  providers 
(PES,  benefit  paying  authority  and  social  services)  and  vertical  coordination  between 
different  administrative  layers  is  key  to  effectively  integrate  the  three  strands  of  minimum 
income. The majority of Member States implement minimum income at the local or regional 
level. This allows qualified social workers to be closer to the people benefitting from these 
schemes, tailoring the support provided better to individual needs. Only four Member States 
–  Italy,  Slovakia,  Luxembourg,  Cyprus  and  Malta  –  implement  minimum  income  at  the 
national level via central government agencies. 

Data-sharing  among  different  entities  with  information  on  minimum  income  scheme 
applicants  and  beneficiaries  can  contribute  to  reducing  the  administrative  burden,  improve 
collaboration between authorities and improve monitoring and evaluation of the schemes in 
general. Sharing information on minimum income beneficiaries and their characteristics can 
help  improve  the  effectiveness  of  the  schemes.  Issues  identified  in  relation  to  data  sharing 
include  obstacles  and  difficulties  presented  by  data  protection  legislation  (e.g.  Netherlands 
and  Denmark),  the  involvement  of  large  numbers  of  actors  (e.g.  France),  lack  of  tools  to 
collect  and  communicate  data  (e.g.  France)  and  inaccuracies  and  gaps  in  the  data  (e.g. 
Lithuania). These findings are consistent with the challenges identified by in-depth research 
focusing on the management and use of data in public employment services produced by the 
European Network of PES.  

Limits in coordination also hinders coverage and individualised service delivery. 

A varying range of organisations are identified as being involved in the delivery of integrated 
services  to  minimum  income  beneficiaries,  including  the  PES,  social  insurance  institutions, 
training  bodies,  social  services,  municipal  and  local  government,  and  non-governmental 
organisations. The provision of services may be facilitated through integrated service models 
that  deliver  a  combined  package  of  services  to  avoid  uncoordinated  approaches  by  various 
service  providers.  These  involve  partnership  agreements  between  providers,  joint  needs 
assessment,  joint  follow-up,  one-stop-shops,  joint  evaluations  and  monitoring  frameworks, 
sequential provision of different services, etc. In fourteen Member States, minimum income 
beneficiaries potentially have access to integrated service provision. However, this access is 
not extended to all participants in some of  the cases, due to varying availability of services 
across  municipal  or  local  authorities  (Bulgaria,  Germany,  France,  Italy  and  Sweden)  or 
services being limited to pilot projects (Latvia, Poland and Romania).  

Civil  society  organisations  play  an  important  role  in  the  delivery  of  social  services  in 
many Member States, for example preventive services in Czechia, services for persons with 
disabilities  in  Greece,  or  social  inclusion  services  in  Ireland.  They  are  also  prominent  in 
Germany,  Slovakia  and  Portugal.  Those  organisations  often  fill  in  the  gap  in  services 

41 

 
 
provision  by  the  public  sector,  in  particular  as  concerns  the  provision  of  social  inclusion 
services  for  the  most  vulnerable,  such  as  homeless  persons,  ex-offenders  or  victims  of 
domestic violence.  

There  are  gaps  in  the  operational  capacity  of  authorities  in  charge  of  minimum  income, 
particularly for relevant service providers. 

Providers of enabling services, particularly the social inclusion services, face important 
capacity problems. The Commission Staff Working Document on the implementation of the 
2008  Commission  Recommendation  on  the  active  inclusion  of  people  excluded  from  the 
labour market highlights the fundamental role of social services and notes that the provision 
of  affordable  quality  services  is  the  least  developed  strand  of  the  Active  Inclusion 
Recommendation. It states that these services remain under-developed in many EU countries. 
People  who  cannot  work  or  are  not  on  the  labour  market  need  health,  education,  finance, 
housing and other services to support them. In countries most affected by high unemployment 
and  at  risk  of  poverty  rates,  social  services  have  to  cope  with  an  increase  in  service  users. 
This  increase  of  demand  is  putting  social  services  in  strain,  also  as  an  aftermath  of  the 
COVID-19 crisis.  

While data on the case-load of per PES handler are not consistently available, the most 
frequently reported such ratios are between 100 and 200 clients per case-handler. The 
2016 PES capacity report97 shows average caseloads of between 100 and 140, depending on 
the  remit  of  the  PES  in  relation  to  benefit  administration,  but  with  individual  country  data 
ranging from caseloads of 12 in Malta to 596 in Spain. To contextualise these numbers, it is 
reported that between 70 and 110 clients per case-handler is considered as feasible for case-
handlers  to  successfully  keep  the  caseloads  and  increase  the  likelihood  of  employment  of 
their beneficiaries98. Personalised services, including increased frequency of contacts with the 
beneficiaries  are  only  possible  if  caseworkers  have  sufficient  time  for  each  client  and 
adequate training99. Studies do suggest that reducing caseloads can have a positive impact on 
employment outcomes and on the unemployment rate in the relevant region. In a large-scale 
pilot project in Germany, job centres with additional counsellors were able, on the one hand, 
to support more intensified job-search activities and, on the other, to register more vacancies 
to which clients could be referred to100.  

There  are  different  patterns  in  the  extent  to  which  social  partners,  civil  society 
organisations  and  social  economy  actors  are  involved  in  the  design,  implementation, 
monitoring and evaluation of minimum income. 

97 European Commission, 2016, Assessment report on PES capacity. 
98  European  Commission,  2018,  Study  on  integrated  delivery  of  social  services  aiming  at  the  activation  of 
minimum  income  recipients  in  the  labour  market  —  success  factors  and  reform  pathways.  The  study  did  not 
cover all EU Member States.  
99  European  Commission,  2018,  Study  on  integrated  delivery  of  social  services  aiming  at  the  activation  of 
minimum  income  recipients  in  the  labour  market  —  success  factors  and  reform  pathways.  The  study  did  not 
cover all EU Member States. 
100 Hainmueller, J., Hofmann, B., Krug, G., Wolf, K., 2015. Do Lower Caseloads Improve the Performance of 
Public  Employment  Services?  New  Evidence  from  German  Employment  Offices.  Scandinavian  Journal  of 
Economics 118(4). https://doi.org/10.1111/sjoe.12166 . 

42 

 
 
                                                           
As  has  been  expressed  by  some  of  the  representatives  of  social  partners,  civil  society 
organisations and social economy actors during the stakeholder consultations, they are often 
not  sufficiently  involved  in  the  planning,  implementation  and  monitoring  of  minimum 
income.  This  seems  to  be  the  situation  in  many  Member  States,  even  though  these 
organisations often represent and/or provide services for the target group(s) of the schemes.   

Good governance requires effective monitoring and evaluation systems used for evidence 
based decision-making.  

Slightly more than half of the Member States have regular monitoring mechanisms in 
place.  Many  countries  provide  annual  reports  on  the  implementation  process,  sometimes 
including  indicators  to  assess  performance.  In  France,  the  Ministry  of  Health  and  Social 
Affairs  publishes  detailed  yearly  national  and  departmental  results,  based  on  a  large  and 
exhaustive  survey.  In  Luxembourg,  monitoring  takes  place  to  assess  the  performance  of 
minimum  income,  with  a  focus  on  cost-effectiveness  and  the  contributions  made  by  the 
partner institutions. In Lithuania, the monitoring platform for social assistance effectiveness 
is  updated  on  an  annual  basis.  In  the  Netherlands,  the  Parliament  annually  receives  an 
overview of all information regarding the implementation of the national scheme. Some other 
countries  provide  more  frequent  reports,  like  in  Greece,  a  quarterly  monitoring  report  is 
produced  at  the  national  level  or  in  Denmark,  monthly  data  is  published  on  so-called 
Ministerial  Goals  and  the  key  indicators  of  employment  measures  at  different  levels  of 
government.  Other  Member  States  provide  statistics  about  their  benefits  and  make  them 
available publicly. In Belgium, statistical data is collected and regularly published – namely 
on  the  right  to  social  integration,  integration  income  benefits,  individual  plans  for  social 
integration,  additional  financial  support  and  socio-professional  integration  exemptions.  In 
Sweden, statistics based on the questionnaire filled by the municipalities are made public and 
complemented by a summary of the main findings. Spain has a regular publication about the 
regional  minimum  income  provision  and  there  are  occasional  publications  of  data  on  the 
national scheme.  

While  some  data  is  collected  in  all  the  Member  States,  the  way  they  are  used  for 
evaluating  purposes  and  evidence  based  policy  making  is  unclear.  The  main  challenge 
appears to  relate to  cases  of insufficient  cooperation between different  entities. This  can be 
further  hampered  by  legal  and  technical  barriers  for  data  management  (such  as  data 
protection rules  and a lack of secure ways of disseminating data), scarce  resources for data 
preparation  and  data  access  administration,  the  fact  that  different  databases  are  not  linked 
together  and  frequent  changes  in  data  methodology.  Approximately  half  of  the  Member 
States make their collected data publicly available (partially or fully). 

43 

 
 
 
 
 
4. Why should the EU act? 

As  shown  in  this  Staff  Working  Document,  in  a  majority  of  Member  States,  minimum 
incomes are not sufficiently effective in supporting the labour market integration and social 
inclusion  of  beneficiaries.  While  over  the  last  years,  most  Member  States  have  taken  steps 
towards  improving  their  minimum  income  schemes,  the  actions  have  not  been  sufficient  to 
address  the  identified  challenges  in  an  integrated  way.  Reforms  at  national  level  have  not 
been  comprehensive  enough  and  implementation  has  often  lagged.  Existing  Union 
instruments,  most  notably  the  European  Semester,  have  regularly  pointed  at  existing 
shortcomings.  Over  the  period  2013  –  2022,  on  average,  sixteen  Member  States  have 
received country-specific recommendations on various components of minimum income (e.g. 
on  improving  the  coverage  and  adequacy  of  income  support,  strengthening  links  between 
income  support  and  activation  measures,  improving  the  delivery  of  social  services  and 
personalized  support  or  consolidating  various  social  benefits  to  improve  their  capacity  to 
reduce poverty).  

Gaps  in  the  effective  delivery  of  minimum  income  hampers  labour  market  integration  and 
social inclusion. Inadequate minimum income protection or insufficient access to benefits for 
a  considerable  share  of  population  has  negative  consequences  on  social  fairness  and 
sustainable growth. Persistent inactivity and remaining remote from the labour market leads 
to skills erosion and a less productive workforce. It is a strong driver for social exclusion and 
poverty and an obstacle to the achievement of the 2030 headline targets. As shown in Chapter 
2 of this Staff Working Document, the target on poverty reduction is unlikely to be reached 
unless Member States strengthen their social protection and social inclusion systems. 

Given the risk of non-action (or insufficient action), in view of the past trends and the social 
challenges  ahead,  the  Union  is  well  placed  to  step  up  efforts  and  take  the  lead,  while 
respecting Member States’ competences. The Union action can guide Member States to move 
in the same direction at  the same time, promoting upward convergence within and between 
Member States, resulting in more equitable and cohesive societies and a strengthened social 
dimension of the Single Market.  

44 

 
 
 
 
5.  The  effect  of  hypothetical  policy  reforms  on  adequacy  and 
coverage 

Several  simulations  of  the  effect  of  potential  changes  in  the  adequacy  and  coverage  of 
minimum income have been elaborated based on EUROMOD by the Joint Research Centre 
of  the  European  Commission101.  These  simulations  provide  orders  of  magnitude  on 
household  incomes  and  budgetary  expenditure  levels  based  on  a  baseline  scenario  and 
different reform scenarios. 

Methodology 

The  baseline  scenario  (simulated  status-quo)  is  the  benchmark  against  which  the  impact  of  subsequent 
modelling  changes  is  assessed.  It  is  also  informative  on  the  current  effectiveness  of  the  minimum  income 
benefits. The list of minimum income benefits under assessment is presented in Annex 1.  

Generally, minimum income benefits have an income test and a set of non-income eligibility conditions. Income 
tests are simulated in EUROMOD with a high degree of accuracy, due to the detailed income variables in EU-
SILC. Due to lack of information about monthly incomes, the income test assumes that the annual income of the 
family is equally distributed throughout the twelve months. Regarding non-income eligibility conditions, rules 
related  to  socio-demographic  characteristics102  are  also  simulated  accurately,  since  they  are  usually  well 
captured in EU-SILC. Other non-income conditions can be simulated only partially; typical examples are asset-
related conditions103, time of residence in the country, registration at employment offices or refusal to take up 
jobs.  

As  a  result,  the  number  of  beneficiaries  in  the  default  EUROMOD  baseline  (and  hence  the  budgetary 
expenditure) is overestimated for most countries, i.e., the default model identifies as eligible some families that 
would  not  be  eligible  if  non-income  conditions  were  taken  into  account  (in  general,  it  is  assumed  that  those 
conditions  are  met).  Additionally,  the  default  model  overestimates  the  number  of  beneficiaries  (and  the 
budgetary  expenditure)  because  not  all  entitled  households  take  up  the  benefits.  To  overcome  this  issue  of 
overestimation  in  the  default  EUROMOD  baseline  simulation,  an  expenditure-based  calibration  method  was 
applied. An additional EUROMOD version was elaborated, in which the total annual expenditure on minimum 
income  benefits  is  equal  to  that  from  external  administrative  statistics  for  each  country.  Through  an  iterative 
process,  EUROMOD  selected  beneficiaries  were  selected  among  the  eligible  observations  until  the 
corresponding  total  expenditure  was  reached.104  Once  the  calibrated  baseline  was  prepared,  JRC  evaluated  its 

101  Almeida  V.,  De  Poli  S.,  Hernández  A.,  Technical  note  on  the  assessment  of  reforms  of  minimum  income 
schemes in the EU using EUROMOD, Joint Research Centre, 2022. 
102 Factors identified under socio-economic demographics do not include ethnicity, which is a limitation of the 
model.  
103 Investment incomes are present in the EU-SILC data and they are used in some countries to derive financial 
assets (by capitalizing those incomes). However, this information is insufficient to account for the full extent of 
the assets portfolio. 
104  Following  Hernández,  et  al.  (2020),  it  was  assumed  that  the  probability  of  receiving  the  benefit,  among 
eligible  beneficiaries,  depends  on  a  random  component  and  a  deterministic  component.  The  deterministic 
component gives higher probability for poorer households to be selected as calibrated beneficiaries. As argued 
in studies on the drivers of non-take-up (Hernanz, et al., 2004), the amount of the entitlement plays a crucial role 
in  determining  whether  to  claim  or  not  a  benefit,  while  other  non-monetary  factors  are  also  relevant  (for 
instance,  individuals  living  in  small  cities  or  rural  areas  are  less  likely  to  take  up  the  benefit).  The  random 
component  roughly  approximates  the  non-monetary  elements.  For  the  calibration,  it  was  assumed  that  the 
random and deterministic components have the same weight. 

45 

 
 
                                                           
impact by using a counterfactual scenario corresponding to a situation where no minimum income benefits are 
in place. 

The presented reforms consist of two stepwise simulations towards: i) a scenario of extreme poverty eradication, 
where  the  adequacy  of  benefits  is  set  at  40%  of  median  equivalised  disposable  income  (or  two  thirds  of  the 
poverty threshold), and ii) a scenario of poverty eradication, where the adequacy of benefits reaches the poverty 
threshold  (i.e.  set  at  60%  of  median  equivalised  disposable  income).  The  scenarios  embody  different 
assumptions  in  the  two  main  elements  eventually  defining  the  performance  of  a  minimum  income  benefit: 
coverage  (i.e.  how  well  the  minimum  income  scheme  covers  its  target  population,  usually  the  poorest 
households)  and  adequacy  (i.e.  how  adequate  the  minimum  income  level  is  to  ensure  a  minimum  living 
standard).  

1st stepwise simulations towards eradicating extreme poverty (40% of median income or 2/3 of the poverty 
threshold) 

i) Increased adequacy to the 40% of the 
median income (2/3 of the poverty 
threshold) for current beneficiaries

ii) Increased coverage by 10 percentage 
points (with reference to the 2/3 of the 
poverty threshold)

iii) Extreme poverty elimination through 
increased coverage and adequacy

2nd stepwise simulations towards eradicating poverty (60% of median income) 

i) Increased adequacy to the poverty 
line (60% of median income) for 
current beneficiaries

ii) Increased coverage by 10 
percentage points (with reference to 
the poverty line)

iii) Poverty elimination through 
increased coverage and adequacy

These stepwise simulations are compared with the baseline that provides an estimate of the impact of the current 
minimum income benefits. Potential behavioural responses triggered by the simulated reform scenarios are not 
taken into consideration. These could refer to labour supply disincentives, and, among others, consumption and 
savings  responses  to  changes  in  households’  disposable  incomes105.  This  allows  to  illustrate  the  impact  of 
changes in adequacy (first) and coverage, including actual take-up106.  

The expenditure in the baseline scenario corresponds to the total cost on the minimum income benefits (as in the 
list  included  in  Annex  1).  In  the  reform  scenarios,  the  cost  of  the  simulated  hypothetical  reforms  are  added, 
following the stepwise approach explained above. In the reform scenarios, income from other sources (i.e. other 
benefits  and  work)  are  accounted  for  in  the  eligibility  to  the  new  hypothetical  scheme.  Therefore,  the  new 
hypothetical  schemes  top  up  the  total  (equivalised)  disposable  incomes  of  all  households  to  the  chosen 
thresholds. As such, the cost of the “poverty elimination”  scenario is simply the cost of eliminating  monetary 
poverty (i.e. making poverty gaps 0).  

The  next  sections  assess  six  potential  scenarios  in  terms  of  their  effect  on  coverage  rates, 
related additional budgetary expenditure, changes in the disposable income of households at-

105  See,  for  instance,  Bargain  &  Doorley,  2011  and  among  others,  Nelson,  2012,  on  the  relationship  between 
minimum income levels and material deprivation. 
106 Disregarding behavioural responses could for example mean that the results on costs as a % of GDP might be 
an  underestimation  of  the  real  costs,  as  costs  are  likely  to  increase  if  labour  supply  is  affected,  or  if  in-work 
benefits are introduced to counteract potential work incentives. At the same time, the assumption of full take-up 
inherently assumed in all the scenarios is likely to result in an overestimation of the real costs. 

46 

 
 
 
 
                                                           
risk-of-poverty  and  the  at-risk-of-poverty  rates107.  The  effects  in  terms  on  budgetary 
expenditure  and  poverty  income  of  the  six  reform  scenarios,  as  described  in  the  next 
subchapters, is summarized in the next table and chart.  

Table 1: Summary of hypothetical reform scenarios in terms of their budgetary impacts and poverty outcomes 

Baseline  

Scenario 1 

Scenario 2 

Scenario 4 

Scenario 5 

Scenario 3 

Scenario 6 

current 
state-of-
play 

 Increased 
adequacy 
to 2/3 of 
the poverty 
threshold 
for current 
beneficiari
es 

Increased 
adequacy to 
2/3 of the 
poverty 
threshold 
and 
increased 
coverage by 
10 
percentage 
points 

Increased 
adequacy to 
the poverty 
threshold  

for current 
beneficiaries 

Increased 
adequacy 
to the 
poverty 
threshold 
and 
increased 
coverage 
by 10 
percentage 
points 

Extreme 
poverty 
elimination 
(benefit in 
the amount of 
2/3 of the 
poverty 
threshold is 
given to all 
below that 
level) 

Poverty 
elimination 
(benefit in 
the amount 
of the 
poverty 
threshold is 
given to all 
below the 
poverty 
threshold) 

0.42% 

+0.03 % 

+0.10 % 

+0.20 % 

+0.41 % 

+0.22 % 

+0.95 % 

16.2 %  

n.a. 

n.a. 

13.9% 

12.4% 

n.a. 

1.3%108 

As % of the EU’s 
yearly 
GDP 
(Additional 
budgetary 
expenditure  are 
the 
relative 
baseline) 

to 

The 
of 
share 
people  at-risk-of-
poverty (AROP) 

107 The impact on AROPE is not shown as AROPE is not simulated in EUROMOD. Calculating it would require making 
assumptions about the impact of the scenarios on the other two components of AROPE (severe material and 
social deprivation and quasi-joblessness).  
108 Estimation is different from 0 due to methodological reasons explained in Almeida V., De Poli S., Hernández 
A.,  Technical  note  on  the  assessment  of  reforms  of  minimum  income  schemes  in  the  EU  using  EUROMOD, 
Joint Research Centre, 2022. 

47 

 
 
 
                                                           
Figure 9: Change in budgetary expenditure (as % of national GDP) that scenarios 1,2,4, and 5 would entail, per MS 

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 Increased adequacy to 2/3 of the poverty threshold for current beneficiaries

Increased adequacy to 2/3 of the poverty threshold and increased coverage by 10 percentage points

 Increased adequacy to the poverty threshold for current beneficiaries

Increased adequacy to the poverty threshold and increased coverage by 10 percentage points

Notes:  EU27  stands  for  simple  arithmetic  average  of  the  relevant  percentages  in  MS;  EU27w  stands  for  weighted  EU27 
average source JRC simulations, DG EMPL elaboration  

5.1 Reform scenario 1: Increased adequacy to the 2/3 of the poverty threshold for 

current beneficiaries  

Definition – In this scenario, the level of the minimum income benefit is increased to 2/3 of 
the  poverty  threshold  (40%  of  median  income)  for  each  current  beneficiary  (coverage  is 
unchanged). 

Budgetary expenditure - At the EU level, moving the adequacy to 40% of the median income 
would entail an increase in budgetary expenditure of 0.03 percentage points of EU GDP, or 
EUR  4.4  billion.  The  increase  would  be  particularly  high  in  Romania,  Greece,  Croatia  and 
Portugal, suggesting that the provision of benefits to these levels would provide a significant 
additional  income  for  the  poorest  households.  At  the  same  time,  the  increase  in  budgetary 
expenditure  that  such  a  reform  would  entail  is  marginal  in  Austria,  the  Netherlands, 
Luxembourg, Denmark and Belgium, reflecting that adequacy levels of the minimum income 
benefits in these countries are higher than 2/3 of the poverty threshold. 

Disposable  income  of  people  -  The  average  equivalised  disposable  income  of  individuals 
with an income below 40% of the median income in the EU level would increase by 4.9% (in 
real terms) in this reform scenario. Looking at differences across EU Member States, it seems 
that  this  scenario  would  imply  a  significant  increase  in  disposable  income  of  households 
below 2/3 of the poverty threshold in Romania (close to 20% increase), Greece, Slovakia and 
Portugal (about 10% increase). These countries are characterized by comparatively medium 
levels  of  coverage,  while  benefit  levels  do  not  seem  to  be  adequate  vis-à-vis  2/3  of  the 

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
poverty  threshold.  In  Austria,  Luxembourg,  the  Netherlands,  Denmark  and  Belgium,  this 
scenario does not lead to significant increases in disposable income, suggesting that the bulk 
of recipients are lifted above 2/3 of the poverty threshold by existing schemes.  

The share of people having an income below 2/3 of the poverty threshold – Upon looking at 
the impact on the share of people below 2/3 of the poverty threshold, this scenario would lead 
to  a  significant  decrease  in  Romania  (-2.6  percentage  points),  Greece  and  Portugal  (-2.1 
percentage  points),  while  in  other  Member  States,  such  as  Austria  and  Luxembourg,  the 
change  would  be  close  to  0.  This  confirms  results  presented  in  the  previous  paragraphs,  in 
particular indicating that in Romania, Greece and Portugal, an increase in adequacy would be 
effective at increasing households’ disposable income. Overall, at the EU level, the share of 
people below 2/3 of the poverty threshold would decrease from 5% to 4.1% in this scenario. 

5.2 Reform scenario 2: Increased adequacy to the 2/3 of the poverty threshold for 
current beneficiaries plus increased coverage by 10 percentage points  

Definition  –  In  this  scenario,  on  top  of  an  increase  of  the  adequacy  to  2/3  of  the  poverty 
threshold (40% of median income), the coverage rate increases by 10 percentage points (new 
recipients get benefits set at this level). This scenario shows the effect of reaching out further 
to those in need, either by enhancing the take-up of the benefit(s) or by relaxing the current 
eligibility criteria (e.g. age, assets, etc.). In this sense, coverage refers to the actual coverage 
of potential beneficiaries. 

Coverage  –  In  this  reform  scenario,  coverage  of  minimum  income  benefits  within  the 
population  in  extreme  poverty  is  increased  by  10  percentage  points  in  each  Member  State, 
compared  to  the  baseline.  The  baseline  simulations  show  that  the  coverage  rate  in  the  27 
Member States, on average, is about 40% of the populations living below 2/3 of the poverty 
threshold, with high heterogeneity across Member States. In Ireland and Cyprus, it is higher 
than 80%, and reaches 90% in France. Conversely, Poland, Estonia, Bulgaria and Latvia it is 
lower  than  10%.  Consequently,  the  10  percentage  points  increase  translates  into  very 
different absolute increases in the number of beneficiaries, depending on the initial coverage 
rate.  For  countries  with  very  low  initial  coverage  rates  (e.g.  Poland,  Estonia,  Bulgaria  and 
Latvia),  the  number  of  beneficiaries  would  double,  whereas  in  countries  with  high  initial 
coverage  rates  (e.g.  France,  Cyprus,  Ireland  and  Slovenia),  the  relative  change  would  be 
much smaller. 

Budgetary  expenditure  –  At  the  EU  level,  this  reform  scenario  is  estimated  to  entail  an 
increase  in  budgetary  expenditure  of  0.10  percentage  points  of  EU  GDP  (or  EUR  13.5 
billion), compared to  the baseline scenario (this  estimated expenditure includes the costs of 
reform scenario 1). The amount would vary from 0.01 percentage points of GDP in Finland, 
where the initial coverage rate (within the population below 2/3 of the poverty threshold) is 
among the highest in the EU, to 0.19 percentage points of GDP in Romania, whose baseline 
coverage and the adequacy of benefits is among the lowest. 

Disposable income of people in extreme poverty – The average income of individuals living 
below 2/3 of the poverty threshold in the EU level would increase by 11.6% in this reform 
scenario, compared to the baseline (of which 4.9% is attributable to increases in adequacy to 

49 

 
 
current beneficiaries under Reform scenario 1). The disposable income of households below 
2/3  of  the  poverty  threshold  in  Romania,  Greece,  Slovakia  and  Portugal  would  increase 
substantially (due to medium levels of coverage and low levels of adequacy) while in Austria, 
Luxembourg, the Netherlands, Denmark and Belgium, reform scenario 2 does not to lead to 
significant  increases  in  disposable  income,  suggesting  that  the  bulk  of  recipients  are  lifted 
above 2/3 of the poverty threshold by existing schemes. 

The share of people below 2/3 of the poverty threshold – This reform scenario would lead to 
additional reductions in all Member States, with significant reductions in Bulgaria, Italy and 
Spain. Overall, at  the EU level,  the share of people with  incomes below 2/3  of the poverty 
threshold would decrease from 5% to 3.6% (compared to the baseline). 

5.3 Reform scenario 3: Increased adequacy to the 2/3 of the poverty threshold with 

full coverage (‘Extreme poverty elimination’) 

Definition – In this hypothetical reform scenario, minimum income benefit is provided to all 
households with  an income below 2/3  of the poverty threshold, extending coverage beyond 
the first and second scenarios. This scenario illustrates a situation of full coverage for those 
whose  incomes  are  below  2/3  of  the  poverty  threshold  in  each  country.  It  is  provided  for 
illustrative purposes to give orders of magnitude of the impact of eventually reaching out to 
all  people  living  with  an  income  below  2/3  of  the  poverty  threshold,  as  a  scenario  of  “full 
coverage” is by construction difficult to achieve in practice (since for instance there is usually 
a remaining level of non-take-up even in best performing Member States). 

Coverage  -  This  scenario  effectively  implies  increasing  the  coverage  rate  within  the 
population below 2/3 of the poverty threshold up to 100%109. In this scenario, all individuals 
have an income below that level, regardless of any other eligibility criteria, receive minimum 
income  benefits  such  that  their  equivalised  disposable  income  reaches  2/3  of  the  poverty 
threshold. 

Budgetary  expenditure  –This  scenario  of  “extreme  poverty  elimination”  would  entail  an 
increase  in  budgetary  expenditure  of  0.22  percentage  points  of  EU  GDP  (or  EUR  31.4 
billion), compared to the baseline scenario.  

This  scenario  reflects  both  the  increase  in  adequacy  for  those  already  receiving  minimum 
income  benefits  and  the  increase  in  coverage  by  reaching  all  individuals  below  2/3  of  the 
poverty  threshold  (who  are  not  currently  entitled  to  minimum  income  benefit(s)  in  the 
baseline simulations). Results show a very high heterogeneity across countries. In most of the 
Member States, the increase in the resources needed is below 0.2 percentage points of GDP. 
As  expected,  the  cost  of  implementing  this  reform  would  be  particularly  low  in  Finland, 

109  There  are  few  country-specific  cases  where  this  coverage  rate  does  not  reach  100%  in  the  simulations 
(Greece,  Poland  and  Slovakia).  This  can  be  explained  by  a  high  prevalence  of  negative  disposable  incomes, 
which usually arise in the presence of self-employed individuals who might have to pay fixed social insurance 
contributions regardless of their level of self-employment incomes. The new complementary minimum income 
benefits treat individuals with negative disposable incomes as if they had zero incomes so that the top-up benefit 
does not go above the guaranteed minimum income level. 

50 

 
 
                                                           
 
Ireland, Slovenia, Cyprus and France where coverage rates are highest and adequacy levels 
are  above  2/3  of  the  poverty  threshold.  On  the  other  hand,  a  larger  amount  of  relative 
resources  would  be  needed  to  implement  this  scenario  in  other  countries,  including  Italy, 
Latvia,  Hungary,  Bulgaria,  Lithuania,  Spain,  Romania  and  Croatia,  where  the  increase  in 
expenditure  would  vary  between  0.3  and  0.6  percentage  points  of  the  respected  national 
GDPs. 

Disposable income of people – This scenario would imply substantial increases in disposable 
incomes  of  the  population  below  2/3  of  the  poverty  threshold.  The  changes  reflect  both 
changes  in  the  level  of  benefits  for  current  beneficiaries  as  well  as  new  entitlements  for 
individuals  not  receiving  benefits  (i.e.  those  not  fulfilling  the  existing  minimum  income 
eligibility  rules  or  not  taking  up  the  benefits).  At  the  EU-27  average  level,  this  scenario 
would increase the disposable income of people below 2/3 of the poverty threshold by 27.6%, 
with  high  variations  across  Member  States.  In  Hungary,  Romania  and  Italy,  this  scenario 
would lead to substantial increases (more than 50%) in disposable income of individuals with 
incomes below 2/3 of the poverty threshold. On the other hand, in  Ireland, Finland, Cyprus 
and France, this increase would be less than 10%. 

The  share  of  people  below  2/3  of  the  poverty  threshold  –  As  expected,  this  scenario  of 
“elimination  of  extreme  poverty”  would  bring  the  share  of  people  living  below  2/3  of  the 
poverty threshold close to zero in all countries110. This highlights that a major reduction in the 
share of people living below 2/3 of the poverty threshold requires both increases in adequacy 
levels  in  some  Member  States,  as  well  as  increased  coverage  rates  to  reach  potentially 
excluded households from income support.  

5.4  Reform  scenario  4:  Increased  adequacy  to  the  poverty  threshold  for  current 

beneficiaries  

Definition  –  In  this  scenario,  the  level  of  the  minimum  income  benefit  is  increased  to  the 
poverty  threshold  for  current  beneficiaries  (coverage  remains  unchanged  compared  to  the 
baseline).  

Budgetary expenditure - At the EU level, moving the adequacy to the poverty threshold for 
current  beneficiaries  would  entail  an  increase  in  budgetary  expenditure  of  0.20  percentage 
points of EU GDP (or EUR 28.7 billion). Similar to scenario 1, the increase would be highest 
in  Romania,  Greece,  Croatia  and  Portugal,  suggesting  adequacy  levels  are  well  below  the 
poverty lines in these Member States.  

Disposable income of people at-risk-of-poverty - At the EU-27 average level, the equivalised 
disposable  income  of  individuals  in  poverty  would  increase  by  5.9%  (in  real  terms)  in  this 
scenario. Looking at differences across EU Member States, the ranking of Member States in 
this respect remains the same as for scenario 1. It would imply a significant increase (over 10 
increase) in  disposable income of households in  poverty  in  Romania, Greece, Slovakia and 
Portugal.  These  countries  are  characterized  by  comparatively  medium  levels  of  coverage, 

110 Note that income losses (for example, from self-employment) are not compensated by the minimum income 
benefits  therefore  a  few  households  with  net  negative  incomes  still  remain  below  the  poverty  threshold.  This 
explains why the extreme AROP rates are not exactly zero, in particular in EL, PL and SK. 

51 

 
 
                                                           
while  benefit  levels  are  lower  than  the  poverty  threshold.  The  disposable  income  of  those 
below  the  poverty  threshold  would  increase  the  least  in  Austria,  Luxembourg,  the 
Netherlands,  Denmark,  Belgium,  Estonia,  Poland,  and  Latvia.  This  corroborates  earlier 
results  in  particular  in  terms  of  relatively  adequate  levels  of  the  benefits  in  Austria, 
Luxembourg, the Netherlands, Denmark and Belgium, and low coverage of these in Estonia, 
Poland and Latvia.   

The  share  of  people  at-risk-of-poverty  –  At  the  EU-27  average  level,  the  at-risk-of-poverty 
rate  would  decrease  by  2.3  percentage  points  compared  to  the  baseline  (from  16.2%  to 
14.9%). The scenario would lead to a significant decrease in poverty in Member States where 
the  baseline  coverage  is  relatively  high  and  the  adequacy  of  minimum  income  benefits  is 
relatively  low  (for  example  Greece,  with  3.8  percentage  point  decrease  in  the  at-risk-of-
poverty rate). In Member States where coverage is low, increasing the benefit levels only for 
current beneficiaries would not significantly decrease the rate of poverty risk.  

5.5  Reform  scenario  5:  Increased  adequacy  to  the  poverty  threshold  for  current 

beneficiaries plus increased coverage by 10 percentage points  

Definition  –  In  this  scenario,  the  coverage  rate  increases  by  10  percentage  points  and 
adequacy is set at the poverty threshold (like in Reform scenario 4). This scenario shows the 
effects  of  reaching  out  further  to  those  in  need,  either  by  enhancing  the  take-up  of  the 
benefit(s)  or  by  relaxing  the  current  eligibility  criteria  (e.g.  age,  assets,  etc.).  In  this  sense, 
coverage refers to the actual coverage of potential beneficiaries. 

Coverage  –  In  this  reform  scenario,  coverage  of  minimum  income  benefits  within  the 
population in poverty is increased by 10 percentage points in each Member State, compared 
to  the  baseline.  The  baseline  simulations  show  that  the  coverage  rate  in  the  27  Member 
States,  on  average,  is  about  19.4%  of  the  populations  in  poverty.  The  patterns  of 
heterogeneity in terms of coverage across Member States remains very similar to scenario 2. 
France  remains  the  country  with  the  highest  level  of  coverage  rate  (above  60%).  Slovenia, 
Ireland and Cyprus present high levels of coverage (above 35%). On the opposite end of the 
scale,  in  Latvia,  Estonia,  Poland,  Bulgaria,  Hungary  and  Italy,  the  coverage  rate  is  below 
10%.  Consequently,  a  10  percentage  points  increase  translates  into  very  different  absolute 
increases in the number of beneficiaries, depending on the initial coverage rate: for countries 
with very low initial coverage rates (e.g. Poland, Estonia, Bulgaria and Latvia), the number of 
beneficiaries would almost triple, whereas  in countries with high initial  coverage rates (e.g. 
France, Cyprus, Ireland and Slovenia), the relative change would be much smaller. 

Budgetary  expenditure  –  At  the  EU  level,  this  reform  scenario,  in  which  the  coverage  of 
beneficiaries receiving benefits in the amount of the standard poverty threshold is increased 
by 10 percentage points, is estimated to entail an increase in budgetary expenditure of 0.41 
percentage points of EU GDP (or EUR 57.9 billion), compared to the baseline scenario. (This 
estimated expenditure includes the costs of scenario 4). This change in expenditure, relative 
to  the  baseline,  would  be  at  or  slightly  above  0.5  %  of  the  respective  national  GDPs  in 
Greece, Germany, Spain and Italy. 

52 

 
 
Disposable income of people at-risk-of-poverty – The average equivalised disposable income 
of  individuals  in  poverty  at  the  EU  level  would  increase  (in  real  terms)  by  12.7%  in  this 
reform  scenario,  compared  to  the  baseline,  of  which  5.9%  is  attributable  to  increases  in 
adequacy  to  current  beneficiaries  under  Reform  scenario  4.  The  disposable  income  of 
households in poverty in Romania, Greece, and Slovakia would increase substantially (due to 
medium levels of coverage and low levels of adequacy vis-à-vis the poverty lines) while in 
Austria, Luxembourg, the Netherlands, Denmark and Belgium, this scenario does not to lead 
to significant increases in disposable income, suggesting that the bulk of recipients are lifted 
out of poverty by existing schemes. 

The  share  of  people  at-risk-of-poverty  –  This  reform  scenario,  enlarging  each  current 
country-specific coverage rate by 10 percentage points, would lead to additional reductions in 
the poverty rates in all Member States. At the EU-27 average level, the at-risk-of-poverty rate 
in the baseline scenario is about 16.2%. Compared to the baseline, the decrease for the EU-27 
average  would  be  of  3.8  percentage  points  (an  additional  decrease  of  1.5  percentage  points 
compared to scenario 4). This scenario would bring to or below the at-risk-of-poverty rate in 
all EU Member States, with some of them still exhibiting higher at-risk-of-poverty rates than 
16% (Bulgaria, Romania, Hungary, the Baltic States, Spain and Italy). 

5.6 Reform scenario 6: Increased adequacy to poverty threshold with full coverage 

(‘Poverty elimination’) 

Definition – In this hypothetical reform scenario, minimum income benefit is provided to all 
household members at-risk-of-poverty that were not covered in the fourth and fifth scenarios. 
This  scenario illustrates a situation of full coverage for those whose incomes  are below the 
poverty  threshold  in  each  country.  It  is  provided  for  illustrative  purpose  to  give  orders  of 
magnitude of the impact of eventually reaching out to all people living with an income below 
the poverty threshold, as a scenario of “full coverage” is by construction difficult to achieve 
in practice (since for instance there is usually a remaining level of non-take-up even in best 
performing Member States). 

Coverage  -  This  scenario  effectively  implies  increasing  the  coverage  rate  within  the 
population at-risk-of-poverty to 100%111. In this scenario, all individuals are currently at-risk-
of-poverty, regardless of any other eligibility criteria, receive minimum income benefits such 
that their equivalised disposable income reaches the poverty threshold. 

Budgetary  expenditure  –The  Poverty  elimination  scenario  would  entail  an  increase  in 
budgetary  expenditure  of  0.95  percentage  points  of  EU  GDP  (or  EUR  133.3  billion), 
compared  to  the  baseline  scenario.  This  amount  is  approximately  2.2  times  the  current 
expenditure at the EU level on minimum income benefits.  

111  There  are  few  country-specific  cases  where  this  coverage  rate  does  not  reach  100%  in  the  simulations 
(Greece,  Poland  and  Slovakia).  This  can  be  explained  by  a  high  prevalence  of  negative  disposable  incomes, 
which usually arise in the presence of self-employed individuals who might have to pay fixed social insurance 
contributions regardless of their level of self-employment incomes. The new complementary minimum income 
benefit treats individuals with negative disposable incomes as if they had zero incomes so that the top-up benefit 
does not go above the guaranteed minimum income level. 

53 

 
 
                                                           
 
Results in this respect show very high heterogeneity across Member States. The relative cost 
of ‘Poverty elimination’ would be high in Latvia, Bulgaria, Italy, Estonia, Spain, Lithuania, 
Croatia, Hungary and Romania, suggesting that minimum income benefits have low coverage 
and, or low adequacy measured against the poverty threshold. In these countries, the increase 
in expenditure for this scenario would be above 1 percentage point of the respected national 
GDPs,  with  the  highest  such  estimate  in  additional  expenditure  of  1.7  percentage  point  in 
Latvia.  In  other  Member  States  where  coverage  and  adequacy  are  relatively  high  (Ireland, 
Finland,  France),  eliminating  poverty  through  minimum  income  benefits  would  not  incur 
significant additional costs. 

Disposable income of people at-risk-of-poverty – The ‘Poverty elimination’ scenario would 
imply  substantial  increases  in  disposable  incomes  of  the  population  below  the  poverty 
threshold. The changes reflect both changes in the level of benefits for current beneficiaries 
as well as new entitlements for previously  excluded individuals (i.e. those not  fulfilling the 
existing  minimum  income  eligibility  rules  or  not  taking  up  the  benefits).  At  the  EU-27 
average level, this scenario would increase the disposable income of people at-risk-of-poverty 
by  33%,  with  high  variation  across  Member  States.  In  Hungary,  Romania  and  Italy,  this 
scenario  would  lead  to  substantial  increases  (more  than  50%)  in  disposable  income  of 
individuals  at-risk-of-poverty, while in France,  Finland,  Ireland,  and Slovenia, this increase 
would be less than 20%. 

Figure 10: Change in disposable income of people at-risk-of-poverty (relative to the baseline scenario) 

l

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Increased adequacy to the (60%) poverty line for current beneficiaries

Increased coverage by 10 percentage points

Poverty elimination through increased coverage and adequacy

Source: JRC elaboration using EUROMOD.  

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
The share of people at-risk-of-poverty – As expected, this scenario would bring the at-risk-of-
poverty rates close to zero in all countries112. Results for this scenario overall suggest that a 
large  reduction  in  the  prevalence  of  poverty  risk  would  require  both  increased  adequacy 
levels as well as increased coverage rates in many Member States.  

112 Note that income losses (for example, from self-employment) are not compensated by the minimum income 
benefits  therefore  a  few  households  with  net  negative  incomes  still  remain  below  the  poverty  threshold.  This 
explains why the extreme AROP rates are not exactly zero, in particular in EL, PL and SK. 

55 

 
 
 
 
                                                           
6. Monitoring at Union level 

The  role  of  the  European  Semester  and  of  mutual  learning  under  the  Open  Method  of 
Coordination  in  promoting  and  monitoring  the  implementation  of  the  active  inclusion 
Recommendation is  well acknowledged113. Multilateral  surveillance and  exchanges of  good 
practices  among  EU  Member  States  are  particularly  highlighted  as  a  tool  for  monitoring 
implementation and facilitating reform processes. The stakeholder consultation (see details in 
Annex  11)  highlighted  the  need  for  regular  and  robust  monitoring  and  reporting  on  the 
implementation of the minimum income. This reflects the call of the Council Conclusions on 
“Strengthening Minimum Income Protection to Combat Poverty and Social Exclusion in the 
COVID-19 Pandemic and Beyond” for strengthening the exchange of best practices, develop 
further  the  existing  benchmarking  framework  and  prepare  periodically  a  joint  report  to 
analyze and review progress achieved in the development of minimum income protection in 
the Member States. 

In  2018,  the  Social  Protection  Committee  established  a  benchmarking  framework  for 
minimum incomes entailing a selection of outcome and performance indicators to assess the 
performance of national systems accompanied with a policy lever indicator for the adequacy 
of  income  support  and  several  common  principles  for  other  key  elements  of  policy  design. 
This benchmarking framework has fed into the analysis of minimum income in the context of 
the  European  Semester.  The  2022  Joint  Social  Protection  Committee  –  European 
Commission  report  on  minimum  income  concluded  that  the  existing  benchmarking 
framework on minimum income has provided a valuable basis for elaborating the report and 
points  out  that  a  regular  update  will  allow  to  review  potential  areas  and  further  expand  in 
different  dimensions  (such  as  eligibility  criteria  and  access  to  services)114.  Therefore,  it 
appears key to continue work in the Social Protection Committee to enhance the availability 
and  comparability  of  relevant  indicators  and  data  to  monitor  policy  developments  in 
minimum incomes and corresponding policy measures. 

As it has been the practice since the 2018 Joint Employment Report, the relevant indicators of 
the benchmarking framework are systematically used for monitoring progress in the context 
of the European Semester and underpin, where appropriate, the proposals for country-specific 
recommendations  to  the  Member  States.  This  provides  a  basis  for  a  mutual  framework  for 
monitoring  policy  developments  as  proposed  by  this  Recommendation,  including  for  the 
purpose of multilateral surveillance. 

Beyond the European Semester monitoring process, a series of peer reviews have been held 
under  the  Open  Method  of  Coordination.  These  peer  reviews,  organized  on  the  topic  of 
minimum income and active inclusion, initiated the Minimum Income Network (MINET) as 
a forum for structured dialogue among Member States to facilitate more regular exchange of 
practices and support improvements of policy design. In line with the Council Conclusions, 

113  Evaluated  in  the  Commission  Staff  Working  Document  of  20  February  2013,  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, SWD(2013)39, and of 26 
April 2017, On the implementation of the 2008 Commission Recommendation on the active inclusion of people 
excluded from the labour market, SWD(2017)257 final. 
114 Joint Social Protection Committee–European Commission report on minimum income, 2022. 

56 

 
 
                                                           
the Social Protection Committee mandated MINET as its working group to reinforce mutual 
learning,  disseminate  results  and  good  practices  among  Member  States  and  support  the 
preparation of the 2022 Joint Social Protection Committee–European Commission report on 
minimum income.  

57 

 
 
 
 
7. Use of EU funds  

The  Union  funding  instruments,  namely  the  European  Social  Fund  (ESF)  and  the  Fund  for 
European  Aid  to  the  Most  Deprived  (FEAD),  support  a  range  of  actions  promoting  social 
inclusion and combating poverty.  

Under  the  respective  thematic  objective  of  the  ESF  in  the  2014-2020  programming  period, 
investments  have  been  directed  primarily  to  support  active  inclusion  measures  with  a 
particular  focus  on  persons  further  away  from  the  labour  market,  improving  access  to 
services,  tackling  discrimination  and  fostering  equal  opportunities  and  supporting  social 
economy. These measures have enabled Member States to integrate the provision of ALMP 
with  social  services.  In  total,  EUR 26.9 billion  have  been  committed  to  this  end  under  138 
operational  programmes.  Overall,  Member  States  allocated  around  22%  of  their  total  ESF 
funding to support social inclusion, beyond the minimum requirement of 20%.  

Complementarily, FEAD helps address the worst forms of poverty in the Union, such as food 
deprivation, child poverty and homelessness. With a total allocation of EUR 4.5 billion in the 
2014-2020  programming  period,  FEAD  provides  for  food  and/or  basic  material  assistance 
and accompanying measures, such as educational activities to promote healthy nutrition and 
advice  on  food  preparation  and  storage,  facilitating  access  to  healthcare,  psychological  and 
therapeutic support, skills programmes, advice on managing a household budget, social and 
leisure activities and provision of legal services.  

through 

the  Employment  and  Social  Innovation  (EaSI)  Programme, 

Financed 
the 
Commission launched in 2020 a call to support innovative and experimental projects aimed at 
putting in place comprehensive systems to support people in (the most) vulnerable situations. 
Nine  projects  (with  a  total  budget  of  EUR  9.6  million)  were  selected,  representing  a  wide 
geographic  coverage,  to  test  innovative  approaches  delivering  upon  the  principle  14  of  the 
European  Pillar  of  Social  Rights  on  minimum  income.  They  provide  for  the  integrated 
delivery  of  the  three  strands:  adequate  income  support  with  labour  market  activation  and 
effective access to enabling goods and services.  

investing 

instrument  for 

the  main  Union 

in  people  and  supporting 

The  European  Social  Fund  Plus  (ESF+)  merges  the  above-mentioned  instruments  and 
remains 
the 
implementation of the European Pillar of Social Rights. With a budget of almost EUR 99.3 
billion  for  the  period  2021-2027,  the  ESF+  maintains  a  strong  focus  on  social  inclusion, 
earmarking  a  dedicated  allocation  of  at  least  25%  of  the  shared  management  resources  for 
this purpose and at least 3% for addressing material deprivation115. The ESF+ will continue to 
support  Member  States’  efforts  to  break  down  barriers  to  employment,  with  active  and 
preventive  labour  market  measures,  including  early  identification  of  needs,  job  search 
assistance, guidance and training. The Fund can act both on persons and systems, providing 
investments to modernize social services and public employment services, while supporting 
the  socio-economic  integration  of  people  further  away  from  the  labour  market  and  their 
access to essential services.  

115 Regulation (EU) 2021/1057, Article 7. 

58 

 
 
                                                           
Through  investments  in  infrastructure  and  equipment  projects  in  the  areas  of  education, 
training  and  lifelong  learning,  employment,  housing,  health,  social  and  childcare,  the 
European Regional Development Fund (ERDF) supports Member States in the provision of 
access to quality social services. In the 2014-2020 programming period, with nearly EUR 7 
billion  allocated  to  education,  training  and  lifelong  learning  and  EUR  3.4  billion  to 
employment and labour mobility, as well as EUR 13.8 billion support to improving access to 
quality  social  services,  the  ERDF  has  contributed  to  creating  opportunities  for  social  and 
economic  integration,  especially  of  disadvantaged  and  vulnerable  groups.  With  the  2021-
2027 programming period, the ERDF continues to foster equal access to inclusive and quality 
services,  particularly  for  marginalized  groups.  Through  supporting  integrated  actions 
including housing, health care and long term care, childcare, and digital equipment for skills 
development,  the  ERDF  helps  ensure  effective  access  to  enabling  services,  especially  for 
vulnerable and disadvantaged people. 

Furthermore, the Technical Support Instrument (TSI) provides tailor-made technical expertise 
to  the  Member  States  to  design  and  implement  reforms. The  support  is  demand  driven  and 
does  not  require  co-financing  from  Member  States.  Support  under  TSI  can  be  provided 
among others in the area of social benefits and services. The Commission supports Member 
States with the adaptations of their social protection systems in various ways and during all 
phases  of  the  reform  process.  The  support  provided  ranges  from  measures  to  strengthen 
administrative  capacity  to  the  review  of  benefit  schemes,  and  an  improved  and  better-
coordinated  delivery  of  social  services.  The  number  of  ongoing  TSI  projects  currently 
supported in this policy area is 35, with a dedicated total budget of just over EUR 16 million. 

The  Recovery  and  Resilience  Plans  include  important  measures  on  social  protection. 
According to  the  analysis of the Commission116, 216 measures accounting  for around EUR 
13.4 billion in  grants  and loans are linked to  social protection  and inclusion. Recovery and 
Resilience  Plans  cover  a  broad  range  of  reforms  and  investments  to  strengthen  Member 
States’  social  protection  systems  in  relation  to  their  effectiveness,  quality  and  resilience, 
depending  on  country-specific  needs  as  highlighted  in  the  most  recent  country-specific 
recommendations. For example, a number of social protection investments in the plans focus 
on  upgrading,  expanding  or  improving  the  social  services  network,  and  on  the  inclusion  of 
vulnerable  groups.  Certain  investments  also  focus  on  fighting  energy  poverty  and  on 
improving  access  to  essential  services  for  the  poorest  households.  The  Facility  also 
encourages  Member  States  to  introduce  reforms  that  create  the  necessary  institutional 
environment for more effective social protection systems. Some measures aim to increase the 
effectiveness and adequacy of social benefits, including minimum income.  

116  Link  to  the  Recovery  and  Resilience  Plans  of  22  Member States  that  have  been  adopted  at  the  time  of  the 
publication 
https://ec.europa.eu/economy_finance/recovery-and-resilience-
sboard/assets/thematic_analysis/sboard_thematic_analysis_social_protection.pdf. 

analysis: 

this 

of 

59 

 
 
 
                                                           
Annexes 

ANNEX 1: List of minimum income benefits   

60 

 
 
 
 
ANNEX  2:  Monthly  nominal  level  (in  EUR)  of  minimum  income  benefits  for  single  adult 
households (top graph) and households with two adults plus one child (bottom graph), all minimum 
income benefits  

61 

 
 
 
 
 
 
 
ANNEX 3a: At-risk-of-poverty (AROP) rates before and after minimum income benefits 
(MIS)  

)

%

(
e
t
a
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P
O
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A

25,0

20,0

15,0

10,0

5,0

0,0

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

Axis Title

Before MIS

After MIS

Notes: Figure1 shows at-risk-of-poverty rates before and after minimum income benefits are provided for all EU Member 
States, using the standard poverty criterion. This indicator measures poverty incidence, i.e., the share of population below 
the poverty threshold in each country. Results shown can be interpreted by differences across countries both in terms of the 
adequacy,  coverage  and  take-up  of  minimum  income  benefits  In  countries  where  two  minimum  income  benefits  are 
considered in this assessment, the joint impact of both benefits is reflected in the graph. The poverty threshold is anchored 
to the counterfactual scenario where no minimum income benefits are in place. Source: JRC elaboration using EUROMOD. 

ANNEX 3b: Depth of poverty before/after minimum income benefits (%), 2/3 of poverty threshold 

3
/
2
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2,0

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0,0

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

Before MIS

After MIS

Notes: Annex 3 shows relative at risk of poverty gaps before and after income support for all EU Member States, using the 
extreme poverty criterion. This indicator measures the intensity of poverty, i.e., the mean shortfall in income from 2/3 of the 
poverty threshold, in percentage of the latter.117 In countries where two minimum income benefits are considered in this 

117  Note  that  this  measure  of  the  poverty  gap  differs  from  the  median  at-risk-of-poverty  gap  used  by 
EUROSTAT.  For  detailed  methodologies,  see  Almeida  V.,  De  Poli  S.,  Hernández  A.,  Technical  note  on  a 

62 

 
 
 
 
 
                                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
assessment,  the  joint  impact  of  both  benefits  is  reflected  in  the  graph.  The  poverty  threshold  is  anchored  to  the 
counterfactual scenario where no minimum income benefits are in place. Source: JRC elaboration using EUROMOD. 

ANNEX  4:  Disposable  income  of  people  below  2/3  of  the  poverty  threshold  before  and  after 
minimum income benefits are paid 

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14.000

12.000

10.000

8.000

6.000

4.000

2.000

0

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e
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RO SK HU EL BG LV LT PT HR PL IT ES EE SI

IE CZ NL MT CY SE BE DK DE AT FR FI LU

Before MIS - PPPs

After MIS - PPPs

Notes: In countries where two minimum income benefits are considered in this assessment, the joint impact of both is 
reflected in the graph. Poor individuals are those at-risk-of-poverty before minimum income benefits are paid. Source: JRC 
elaboration using EUROMOD and Eurostat data on price levels (2019). 

ANNEX 5: Comparison in the coverage of all income support vs minimum income benefits 
The figure shows the gaps in coverage of all income support (i.e. all benefits received) and those of 
the minimum income benefits only. It illustrates that in the group of countries where the coverage of 
minimum  income  benefits  is  lowest  (Latvia,  Estonia,  Poland,  Bulgaria,  Hungary,  Italy,  Malta, 
Croatia), the extent to which other social benefits cover people who are at-risk-of-poverty but do not 
receive minimum income benefits varies to a large degree.  

100

80

60

40

20

0

-
F
O
-
K
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I
R
-
T
A
E
L
P
O
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O
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A
R
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)

%

(
Y
T
R
E
V
O
P

V
L

E
E

L
P

G
B

U I
T
H

T
M

R
H

T
A

T
L

S
E

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C

E
S

U
L

O
R

E
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S

T
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F

L
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E
D

Y
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7
2
U
E

Income support

Minimum income benefit(s)

E S

I

I

R
F

Source: DG EMPL elaboration using the SPC-Commission Minimum income benchmarking and JRC’s note118  

calibrated  EUROMOD  baseline  for  assessing  the  effectiveness  of  minimum  income  schemes  in  the  EU,  Joint 
Research Centre, 2022. 

118 Almeida V., De Poli S., Hernández A., Technical note on a calibrated EUROMOD baseline for assessing the 
effectiveness of minimum income schemes in the EU, Joint Research Centre, 2022. 

63 

 
 
 
 
                                                                                                                                                                                     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 6:  Targeting  of  benefits  -  Individuals  according to  poverty  status  and  minimum  income 
beneficiary status (‘poor’ in graph labels means individuals with equivalised income at or below the 
poverty line; ‘non-poor’ means individuals above this threshold) 

Poor beneficiaries

Poor non-beneficiaries

Non-poor beneficiaries

180%

160%

140%

120%

100%

80%

60%

40%

20%

0%

FR CY IE

SI

FI EL DE NL BE PT CZ SK LU SE MT DK RO AT LT ES HR IT HU PL EE BG LV

Notes:  The  sum  of  ‘poor’  beneficiaries  and  ‘poor  non-beneficiaries’  equals  the  total  population  at-risk-of-poverty.  In 
countries where two minimum income benefits are considered in this assessment, the joint impact of both is reflected in the 
graph. Source: JRC elaboration using EUROMOD. 

ANNEX 7: Gap in housing cost overburden rate  

The gap in housing cost overburden rate119 stands at 33 percentage points on average and has slightly 
dropped  in  the  EU  since  2015,  with a  significant  difference  among  the  countries.  In  some  Member 
States it is  below 20  p.p. (FI,  MT,  CY)  or even  below  10  p.p  (in  IE),  while  in other  countries  it is 
above 60 p.p. (like in EL and DK). This gap can relate to various factors, such as different systems of 
housing support provisions and divergence of overall housing price developments in the countries.  

119 Gap in p.p. between the share of individuals (18-64) at risk of poverty from (quasi-)jobless households and 
the share of individuals (18-64) not at risk of poverty from non-(quasi-)jobless households. 

64 

 
 
 
 
                                                           
 
Gap in housing cost overburden rate (18-64) 

Note: There is a break in DE data - and thus also in EU27 data - for 2020. Source: DG EMPL computation on Eurostat data. 

65 

 
 
 
 
 
 
ANNEX 8: Net income of a single parent (1 adult minimum income recipient and 1 child) as % of 
at-risk-of-poverty  threshold  (smoothed  over  three  years)  for  a  similar  household  and  as  a  %  of  the 
income of a household of 1 adult (low-wage earner) and 1 child (income year 2019) 

Note:  EU  computed  as  a  simple  average.  Housing  costs  assumed  to  be  18%  of  average  wage.  AROP  threshold  adapted 
(equivalisation)  for  this  household  type  (x  1.3).    Child  is  assumed  to  be  2  years  old.  Data  for  IT  is  for  income  year  2020 
(instead of 2019).. Source: own computation on Eurostat data and OECD data.  

66 

 
 
 
 
 
ANNEX 9: Net income of a household of 2 adults (minimum income recipients) and 2 children as % 
of at-risk-of-poverty threshold (smoothed over three years) for a similar household and as a % of the 
income of a household of 2 adults (low-wage earners) and 2 children (income year 2019) 

Note: EU computed as a simple average. Housing costs assumed to be 19% (and not 18.6%, because of data availability) of 
average wage. AROP threshold adapted (equivalisation) for this household type (x 2.1).  Children are assumed to be 2 years 
old and 4 years old. Data for IT is for income year 2020 (instead of 2019). Source: own computation on Eurostat data and 
OECD data. CZ data to be updated with recent revision agreed between OECD, European Commission and CZ 

67 

 
 
 
 
 
 
 
ANNEX 10: The composition of the income of minimum income beneficiaries  

By construction, the income of minimum income beneficiaries is on average mostly composed of 
minimum income benefits, but also of other benefits, in particular housing benefits. When looking 
at  the  decomposition  of  the  net  income  by  components,  it  appears  that  at  EU  level  (not  weighted 
average)  the  minimum  income  benefits  cover  44%  of  the  poverty  threshold  (or  73%  of  the  total 
income), housing benefits 17% of the poverty threshold (or 28% of the total income) and income tax 
1%  of  the  poverty  threshold  (or  2%  of  total  income).  In  some  Member  States,  the  main  income 
component is actually the housing benefit (Czechia, Latvia, Poland, Finland, Germany) and there are 
a  few  Member  States  where  housing  support  is  not  provided  through  benefits  in  monetary  terms 
(Romania,  Bulgaria,  Hungary,  Portugal,  Greece,  Spain  and  Belgium).  Income  tax  is  significant  in 
Denmark and Luxembourg only. 

Net income of minimum income recipients (single adult) as % of at-risk-of-poverty threshold (smoothed over three years) – 
decomposition by different benefits (income year 2019) 

Source: COM-SPC Minimum income report; Note: EU27 computed as a simple average. Data for IT is for income year 2020 
(instead  of  2019).  For  DE,  there  is  a  break  in  the  SILC2018-2020  AROP  thresholds  used  to  compute  the  AROP  threshold 
smoothed over 3 years for the income year 2019. Housing costs are assumed to be of 11% of average wage. Source: own 
computation on Eurostat data and OECD data.  

68 

 
 
 
 
ANNEX 11: Synopsis report on consultation with stakeholders   

This  synopsis  report  gives  an  overview  of  the  consultation  process  carried  out  over  periods  of  21 
January  to  5  May  2022  on  the  initiative,  and  between  14  January  and  30  November  2020  on  the 
European Pillar of Social Rights Action Plan.  

The  goal  of  the  consultations  was  to  collect  views  from  stakeholders  on  the  need  for  EU  action  to 
promote overall effectiveness of the minimum income in alleviating poverty and social exclusion, as 
well as on the type of action that could be envisaged, including its possible scope and content, based 
on their experience and existing data. In line with the Better Regulation Guidelines, and in particular 
its  Tool#4  Evidence-based  better  regulation  and  tool  #51  consulting  stakeholders,  the  consultations 
aimed to reach out to the wide variety of stakeholders to gather their views and opinions. 

TARGETED CONSULTATIONS 

Targeted  consultations  took  place  between  28  January  and  5  May  2022,  with  the  following 
stakeholders:  

EUROPEAN SOCIAL PARTNERS  

the  EU 

including 

level  cross-industry  organisations: 

Dedicated  hearing  with  social  partners  took  place  on  24  March  2022.  Social  partners  delegation 
consisted  of  47  representatives, 
the 
Confederation  of  European  Business  (BusinessEurope),  the  Association  of  Crafts  and  SMEs  in 
Europe  (SMEunited),  the  European  Trade  Union  Confederation  (ETUC),  and  European  Public 
Services  Union  (EPSU).  Representatives  of  social  partners  expressed  general  support  for  the 
initiative  aimed  at  strengthening  the  current  EU  framework  on  minimum  income.  Employers 
reiterated  their  support  for  the  initiative  that  would  provide  guidance  while  respecting  national 
competences in designing and implementing social protection systems. They highlighted the key role 
of  public  services,  such  as  education  and  training,  aimed  at  labour  market  integration  of  the 
beneficiaries.  Both  sides  emphasised  the  need  for  strengthening  active  inclusion  approach  that 
integrates  income  support  with  social  services  and  inclusive  labour  markets.  The  trade  unions 
suggested that the rights-based approach of the principle 14 of the European Pillar of Social Rights 
should  be  reflected  in  the  recommendation.  Both  sides  emphasized  the  important  role  of  public 
administration at local level  in  social  inclusion  and labour  market  participation,  in  particular  public 
employment and social services.  

CIVIL SOCIETY ORGANISATIONS  

European Civil Society Organisations (CSO) were consulted through a dedicated strategic dialogue, 
on 28 January 2022. 46 participants representing 35 organisations participated in the dialogue. Most 
Civil Society Organisations (CSOs) suggested that a more binding act, such as a framework directive, 
could  have  been  more  effective.  In  the  same  time,  they  expressed  appreciation  for  the 
Commission’s  initiative.  Concerning  access  to  the  schemes,  many  CSOs  mentioned  too  strict 
eligibility criteria (those related to means test, age or residence) hindering the coverage. They listed 
punitive nature of activation conditions, discrimination and stigmatisation as the reasons for non-take-
up. Individualisation of rights was suggested as a means to tackle gender and age related challenges 
hindering both access and adequacy. Many CSOs reiterated that the minimum income benefits should 
be considered as a part of a broader social protection and tax systems and that various benefits should 
be mutually reinforcing. Several representatives welcomed the Commission’s approach based on three 
strands  of  active  inclusion.  They  underlined  that  access  to  enabling  services  is  key,  however  the 
services need to be adequately funded to be effective.  

SPC AND EMPLOYMENT COMMITTEE (exchange of views) 

69 

 
 
 
A  joint  exchange  with  SPC  and  Employment  Committee  took  place  on  1  April  2022.  Overall,  the 
Delegates were supportive of an EU level initiative aimed at strengthening the current framework. 
Many Delegates recalled that minimum income is part of a broader social protection systems that are 
designed at national level, and that the national competence and diversity of social protection systems 
should  be  respected.  Many  Delegates  stated  that  such  an  initiative  will  not  only  contribute  to 
combatting poverty, but also to upward social convergence, also functioning as a stabiliser in times of 
crises, which has been seen during the COVID-19 pandemic. The Delegates confirmed the adequacy 
of a comprehensive approach in addressing poverty and social exclusion, namely through providing 
not  only  cash  support,  but  also  through  focusing  on  incentivising  labour  market  integration  and 
through combining social and enabling services.  

PUBLIC EMPLOYMENT SERVICES NETWORK (PES Network) 

Thematic  debated  with  PES  Network  representatives120  took  place  on  5  May  2022.  Overall,  the 
participants agreed with the challenges identified and building blocks proposed by the Commission. 
Representatives  of  the  PES  Network  pointed  to  the  importance  of  cooperation  between  various 
services’ providers supporting minimum income beneficiaries, such as minimum income authorities, 
social  services  and  PES.  They  indicated  that  mutual  learning  and  exchanges  of  good  practices  or 
standards  on  collaboration,  including  data  sharing,  would  be  useful  for  the  respective  services’ 
providers.  

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 

Thematic  debated  with  the  European  Economic  and  Social  Committee  took  place  on  25  February 
2022. The EESC Delegates, who had previously urged for an EU action in this field, supported the 
Commission initiative121. Some participants considered the initiative as a step in the right direction, 
potentially leading to a more binding legal instrument. Many participants reiterated the importance of 
ensuring the rules of subsidiarity and proportionality of the EU action. While guiding principles and 
benchmarks  should  be  developed  at  the  EU  level,  Member  States  are  best  placed  to  implement  the 
measures,  given  their  specificities  and  the  fact  that  minimum  income  is  parts  of  broader  social 
protection  systems  consisting  of  other  benefits.  The  participants  supported  the  proposed  active 
inclusion approach.  EESC members  recalled  the connection  between  minimum  wage  and  minimum 
income and urged for ensuring the link. 

EXPERTS 

Thematic  debate  with  experts  in  the  field  of  minimum  income  took  place  on  17  February  2022. 
Academics and researchers representing universities, research and financial institutions recalled that 
COVID-19 crisis brought to the surface both the protective and stabilizing role of minimum income 
support,  pointing  to  the  fragmentation  and  gaps  of  social  protection  in  general.  The  participants 
highlighted that  labour  market  participation  should  be  enhanced  by  integrated  provision  of  services 
and active labour market policy (ALMP) support rather than by sanctions. The need for personalized 
(needs  based)  support  and  non-discriminatory,  inclusive  access  was  also  brought-up.  In  terms  of 
personal  scope  of  the  initiative,  it  was  suggested  that  in  accordance  with  Principle  14,  the 
recommendation should cover all at all stages of life. The representatives also suggested addressing 
through the initiative a lack of data and information due to weak monitoring and evaluation practices. 

No comments were received from the Committee of the Regions either during or after the thematic 
debate that took place on 15 February 2022.  

120 DE, FR, IE, NL attended the debate. 
121 Own initiative opinion SOC/584, ‘’For a European Framework directive on a Minimum Income’’ of 
20.02.2019, and own opinion 2014/C170/04 ‘’Opinion of the European Economic and Social Committee on the 
European minimum income and poverty indicators’’ of 10-11.12.2013. 

70 

 
 
                                                           
CALL FOR EVIDENCE CONSULTATION 

The  Commission  invited  all  stakeholders  to  provide  feedback  on  the  Call  for  Evidence  between  4 
March and 1 April 2022. 75 individual contributions and 33 position papers were submitted from 33 
Civil  Society  Organisations  (CSO),  22  citizens,  7  business  associations,  5  academic  and  research 
institutions, 4 trade unions and 4 public authorities.  

General views on the initiative  

The majority of respondents are in favour of the initiative. Certain stakeholders122 consider that a 
framework directive on minimum income could achieve a stronger impact on poverty reduction. To 
this  end,  Caritas123  provided  a  position  paper  listing  10  principles  of  a  potential  framework 
directive124.  A  group  of  35  European  researchers  and  academics  provided  a  list  of  elements125  that 
should be covered in the instrument, while The European Confederation of Independent Trade Unions 
(CESI)  disagreed  with  the  proposed  policy  instrument  arguing  that  the  implementation  and 
enforcement of the recommendation will be unlikely.  

Certain stakeholders highlighted that the minimum income fall within national competences and are 
linked  to  broader  social  protection  systems,  which  should  be  respected126.  On  that  point, 
Confederation  of  Danish  Employers  stated  that  the  objective  to  achieve  convergence  between  the 
Member  States  should  not  take  the  priority  over  national  capabilities  to  develop  minimum  income. 
The  Federation  of  Finnish  Enterprises  additionally  recalled  the  link  with  safeguarding  national 
competiveness and cost of labour. 

Some respondents are against the initiative. For example, Wirtschaftskammer Österreich (Austrian 
Federal Economic Chamber) considers that the Austrian welfare system is generous enough while the 
progress towards poverty reduction target has been satisfactory. German Employers Associations in 
the  Metal  and  Electrical  Engineering  Industries  ‘Total  Metal’  expressed  strong  reservations,  stating 
that  an  EU  level  initiative  would  undermine  Member  States’  rights  to  determine  their  own  social 
protection systems.  A  representative of Italy stated that due to differences amongst Member States 
and  regions  it  is  not  possible  to  define  all  criteria  necessary  for  setting  up  common  standards  on 
minimum income across the EU.  

On  coverage  and  access,  many  stakeholders  consider  that  minimum  income  should  be  non-
discriminatory or rights-based, which would prevent stigmatisation, or that stigmatisation should be 
proactively  tackled127.  The  European  Confederation  of Independent Trade  Unions  (CESI)  called  for 
improving information on eligibility criteria, while ATD Fourth World highlighted the need to overall 

122 EAPN, A group of 35 academics and researchers from 14 Member States, European Youth Forum, European 
Youth  Research  ,  The  Federal  Association  of  Non-statutory  Welfare  (BAGFW),  Solidar,  Austrian  Federal 
Chamber of Labour (BAK), Eurodiaconia, The European Confederation of Independent Trade Unions (CESI). 
123 Including Caritas France. 
124 Position-Paper-on-Minimum-Income-2022.pdf (caritas.eu). 
125 Covering methodology for ensuring adequacy, access, active inclusion approach, choice of legal background, 
monitoring and evaluation system and adequate EU funding for its implementation.  
126  The  Federation  of  Finnish  Enterprises,  Confederazione  Nazionale  dell'Artigianato  e  della  Piccola  e  Media 
Impresa,  SOSTE,  Solidar,  German  Federal  Ministry  of  Labour  and  Social  Affairs,  Danish  Trade  Union 
Confederation,  Confederation  of  Danish  Employers  ,  Swedish  Confederation  of  Professional  Associations 
(SACO), BAGWF, Confederation of German Employers Association (BDA). 
127  Social  Platform,  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  35  Academics  and  Researchers, 
German  Federal  Ministry  of  Labour  and  Social  Affairs,  European  Youth  Forum,  European  Youth  Express, 
European  Anti-Poverty  Network,  Madrid  City  Council,  Roma  Grass-Root  Organisation  (ERGO),  FPS  Social 
Security and PPS Social Integration, ATD Fourth World, First Years, First Priorities Campaign, Eurodiaconia, 
Belgian Focal Point for Combatting Poverty, Solidar, Austrian Federal Chamber of Labour (BAK), Fundacion 
Secretariado Gitano, Eurodiaconia, Eurocities, AGE Platform. 

71 

 
 
                                                           
improving access to information and reducing waiting times. European Social Network suggested that 
putting in place a single-entry-point by public and third sector social services could improve outreach 
to  potential  beneficiaries.  European  Youth  Forum  and  Solidar  brought  the  perspective  of  young 
people, who in some countries either do not have access to the schemes or receive a reduced amount 
of benefit. Some stakeholders called for careful consideration of the use of digital tools in access to 
information, or schemes with a view not to exclude those not able to use such means128. On that point, 
The City Council of Madrid highlighted particularly challenging access barriers for homeless people, 
who  do  not  have  ICT  devices  necessary  to  take  an  appointment  with  respective  authorities.  Some 
stakeholders suggested cutting red tape, including at the phase of claiming the benefit129, while some 
suggested introducing automated access130.  

Many respondents commented on adequacy. Many of them called for setting adequacy level at, or at 
least at the level of at risk of poverty threshold (AROP)131. Some respondents stated that the adequacy 
level  should  be  adjusted  to  the  cost  of  enabling  or  essential  services  (such  as  housing,  healthcare, 
childcare,  energy  and  water)132,  or  household  composition133.  Some  stakeholders  suggested  that  it 
should  take  into  account  special  needs  of  vulnerable  groups,  including  children,  rather  than 
implementing mainstream approach134. Certain respondents called for recognizing a unique situation 
of  persons  with  disabilities,  who  need  to  compensate  for  additional  costs  related  to  the  disability, 
including at work or during job search135. Certain stakeholders suggested using reference budgets136. 
On  that  note,  the  European  Platform  on  Reference  Budgets  argued  that  they  are  a  useful  tool  in 
addressing  poverty  and  social  exclusion  through  a  broad  focus  on  tax-benefit  system,  access  to 
enabling  and  essential  services,  and  in  strengthening  individual  competences  and  labour  market 
participation.  German  Federal  Ministry  of  Labour  and  Social  Affairs  suggested  defining  measures 

128  EAPN,  ATD  Fourth  World,  Fundacion  Secretariado  Gitano,  European  Social  Network,  The  Spanish 
Confederation  of  People  with  Physical  and  Organic  Disabilities  (COCEMFE),  European  Network  for  Social 
Integration Enterprises (ENSIE). 
129  Finish  health  and  care  services  association,  SOSTE,  European  Roma  Grass  Root  Organisation  (ERGO), 
European  Social  Network,  The  Spanish  Confederation  of  People  with  Physical  and  Organic  Disabilities 
(COCEMFE). 
130  Social  Platform,  European  Youth  Forum,  European  Youth  Express,  FPS  Social  Security  and  PPS  Social 
Integration, Belgian Focal Point on Combatting Poverty, AGE Platform, Belgian Antipoverty Network (BAPN). 
131  Social  Platform,  35  Academic  and  Researchers,  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  
European  Youth  Forum,  European  Youth  Express,  EAPN,  ERGO,  Solidar,  Federal  Public  Service  Social 
Security  131  EuroHealthNet,  Caritas,  Social  Platform,  Artur  J.  Santos,  ATD  Fourth  World,  The  First  Years, 
First Priorities Campaign, AGE Platform. 
131 Michel Mercadie. 
131  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  German  Federal  Ministry  of  Labour  and  Social 
Affairs, Fundacion Secretariado Gitano, Belgian Focal Point on Combatting Poverty. 
131  Social  Platform,  35  Academic  and  Researchers,  Belgian  Platform  Against  Poverty  and  Social  Exclusion, 
European  Youth  Forum,  European  Youth  Express,  EAPN,  ERGO,  Solidar,  Federal  Public  Service  Social 
Security  (FPS  Social  Security)  and  the  Federal  Public  Planning  Service  for  Social  Integration  (PPS  Social 
Integration),  Austrian  Federal  Chamber  of  Labour  (BAK),  Belgian  Focal  Point  on  Combatting  Poverty,  The 
European Confederation of Independent Trade Unions (CESI), AGE Platform, Euroship Project. 
132 EuroHealthNet, Caritas, Social Platform, Artur J. Santos, ATD Fourth World, The First Years, First Priorities 
Campaign, AGE Platform, Michel Mercadie. 
133  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  German  Federal  Ministry  of  Labour  and  Social 
Affairs, Fundacion Secretariado Gitano, Belgian Focal Point on Combatting Poverty. 
134  Social  Platform,  ATD  Fourth  World,  Austrian  Federal  Chamber  of  Labour  (BAK),  The  First  Years,  First 
Priorities Campaign, Fundacion Secretariado Gitano, Eurocities. 
135  European  Disability  Forum  and  European  Blind  Union  Federal Public  Service  Social  Security  (FPS  Social 
Security) and the Federal Public Planning Service for Social Integration (PPS Social Integration). 
136 Social Platform, Caritas, 35 Academic and Researchers, AGE Platform, EU Platform on Reference Budgets, 
Euroship Project. 

72 

 
 
                                                           
designed  to  guarantee  a  life  in  dignity,  more  specifically,  human  basic  needs  taking  into  account 
living standards, price levels and national poverty lines. Eurocities underscored territorial dimension 
of poverty and in this context argued that an EU level framework on adequacy will not only prevent 
poverty, but also prevent poverty migration. 

Some stakeholders highlighted the need for a regular or automatic indexation137. On that note, Social 
Justice Ireland suggested that the indexation should be overseen by an independent body. 

Majority  of  the  stakeholders  called  for  reinforcing  active  inclusion  approach,  whereby  income 
support is complemented by social inclusion measures, labour market activation and facilitated access 
to services. CESI and Confederations of German and Danish Employers considers that active labour 
market policies should be strengthened.  

On labour market integration, Austrian Federal Chamber of Labour (BAK) and Finish Health and 
Care Services Association, SOSTE highlighted the need to support vulnerable groups, such as persons 
with  disabilities  or  mental  illnesses  in  labour  market  integration.  Eurocarers  underscored  particular 
situation  of  carers,  who  often  cannot  fulfil  the  conditions  to  take  part  in  ALMP  or  job  search 
measures. Confederation of Danish Employers highlighted the importance of timeliness of measures, 
including  incentivising  transition  through,  for  example,  part-time  work.  EuroHealthNet  emphasized 
the  issue  of  positive  incentives  instead  of  sanctions,  while  Belgian  Platform  Against  Poverty  and 
Social  Exclusion  and  ERGO  called  for  tapering  of  benefits  (whereby  income  from  work  could  be 
combined with minimum income support), and on prohibiting public works. ERGO Network included 
illustrative  examples  from  some  Member  States  on  the  impact  of  sanctions  or  poorly  paid  public 
works  on  the  beneficiaries’  morale.  Wirtschaftskammer  Österreich  (Austrian  Federal  Economic 
Chamber)  and  the  European  Network  for  Social  Integration  Enterprises  (ENSIE)  drew  attention  to 
financial traps, whereby the difference between income support and minimum wage is not substantial. 
ENSIE also drew the attention to a lack of quality job offers for the beneficiaries and provided some 
examples of how Work Integration Social Enterprises are and could be used in this respect. European 
Social Network underscored the need to build links with local employers. One respondent stated that 
everybody  should  be  given  a right  to  work  and that employment  should  be  favoured  and  supported 
through subsidies, also to prevent intergenerational dependency on benefits138.  

On  social  inclusion,  many  respondents139  argued  that  the  minimum  income  should  aim  at 
empowering the beneficiaries to facilitate their participation in society. Many argued that activation 
aimed  solely  at  labour  market  integration  does  not  offer  a  real  opportunity  for  social  inclusion  to 
people  furthest  away  from  the  labour  market,  or  is  not  adequate  for  those  faced  with  complex 
problems,  such  as  having  little  or  no  experience  of  work,  lacking  social  competences,  emotional 
management,  conflict  resolution  or  skills.  Social  Platform  insisted  that  for  income  support  to  be 
effective it has to be rooted in active inclusion strategy that has people’s empowerment, participation 
and  well-being  at  its  core.  On  that  note,  European  Social  Network  highlighted  an  importance  of 
putting  together  an  individualised  social  inclusion  action  plan  for  beneficiaries,  on  building  peer 
support  social  networks,  and  reinforcing  local  social  services  so  as  to  provide  a  comprehensive 
support.  On  the  former,  Belgian  Antipoverty  Network  drew  attention  to  the  need  to  careful 
development  of  such  measures  so  they  do  not  include  too  strict  conditions  and  sanctions  putting 
additional stress on the beneficiaries.  

137  Social  Platform,  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  Eurodiaconia  and  FPS  Social 
Security and PPS Social Integration, and AGE Platform. 
138 Barbara Schumann. 
139 Social Platform, Belgian Platform Against Poverty and Social Exclusion, ERGO, Solidar, Eurocarers, Global 
Institute  for  Structure  relevance,  Anonymity  and  Decentralisation,  AGE  Platform,  35  Academics  and 
Researchers,  German  Federal  Ministry,  University  of  West  Attica,  BAGFW,  ATD  Fourth  World,  BAK, 
Fundacion  Secretariado  Gitano,  ESN,  Eurodiaconia,  Belgian  Focal  Point  on  Combatting  Poverty,  Eurocities, 
AGE Platform, ENSIE. 

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On  access  to  services,  overall  the  stakeholders  agreed  that  access  to  services  fulfils  an  enabling 
function  for  the  beneficiaries  and that it  should  be facilitated.  Some  stakeholders140  emphasized  the 
importance  of  the  comprehensive  approach,  entailing  or  linking  the  provision  of  enabling,  needs-
based services, including health and social services. ATD Fourth World underscored the importance 
of  provision  of  social  housing.  German  Federal  Ministry  of  Labour  and  Social  Affairs  and  Solidar 
emphasized the importance of skills development, in particular in times of demographic change and 
skills  shortage.  Eurodiaconia  raised  the  issue  of  the  necessity  to  provide  to  the  beneficiaries 
specialised support and education aimed at prevention and dealing with over-indebtedness.  

On  monitoring,  many  respondents  called  for  regular  and  robust  monitoring  and  reporting  on  the 
implementation  of  the  recommendation141.  Finish  health  and  care  services  association,  SOSTE 
proposed  to  further  develop  the  scoreboard  of  social  indicators  as  well  as  to  strengthen  mutual 
learning  and  sharing  of  good  practices.  On  the  methodology,  Senior  Corporate  Silver  Spoon, 
Environment and Nature Association from Hungary stated that additional 11 indicators142 should be 
taken into account in the action aimed at fighting poverty, while EAPN called for developing EU level 
quantitative and qualitative indicators. Belgian Platform Against Poverty and Social Exclusion called 
for  further  expanding  Minimum  Income  Benchmarking  Framework.  German  Federal  Ministry  of 
Labour  and  Social  Affairs  called  for  reducing  the  differences  amongst  the  Member  States  in  the 
adequacy indicators, while Social Platform and EAPN called for a common definition of adequacy, 
coverage  and  enabling  support.  Additionally,  EAPN  called  for  a  common  EU  framework  on 
methodology for reference budgets and a better visibility of the Benchmarking indicators. University 
of  West  Attica  called  for  adopting  a  specific  set  of  indicators  to  assess  in  a  more  precise  way  the 
functioning of national minimum income.   

On  governance,  many  civil  society  organisations143  stated  that  given  their  proximity  to  the  persons 
experiencing  poverty  and  social  exclusion,  as  well  as  to  the  service  providers,  they  should  play  a 
stronger role in the overall governance process. CESI and SOSTE stated that a recommendation on 
cooperation  between  different  administrative  sectors  and  services  providers  would  be  beneficial, 
while University of West Attica and European Social Network suggested involving regional, local and 
other  relevant  stakeholders.  On  that  note,  Eurocities  highlighted  an  important  role  of  cities  in 
designing,  delivering  and  coordinating  social  services  to  support  persons  faced  with  poverty  and 
social exclusion, and emphasized the importance of ensuring data interoperability between different 
authorities and services providers. In the same time, Eurocities drew the attention to the fact that so 
far cities have not been adequately included in policy debates at national level. The City of Grande 
Synthe  informed  that  many  practices  remain  at  local  level  and  are  limited  in  scope.  Madrid  City 
Council  drew  attention  to  the  challenges  at  the  local  level,  including  issues  such  as  lack  of  robust 
governance structures, monitoring and evaluation. To this end, the Council highlighted an importance 
to  improving  coordination  mechanisms.  Confederation  of  Danish  Employers  suggested  simplifying 
the social benefits system, which currently consists of many kinds of different benefits.  

Other issues 

140  Social  Platform,  EuroHealthNet,  Caritas,  Belgian  Platform  Against  Poverty  and  Social  Exclusion,  ERGO, 
Solidar,  ATD  Fourth  World,  Austrian  Federal  Chamber  of  Labour  (BAK),  European  Social  Network, 
Eurodiaconia, AGE Platform, EAPN, ESN, Belgian Focal Point on Combatting Poverty, Eurocities, ENSIE. 
141 35 Academics and Researchers (under Anne Van Lancker), Social Platform, EAPN, Eurodiaconia, Eurocities. 
142 GDP per capita, PPs, EU-27 = 100, Productivity per employee, EU-27 = 100.0, Proportion of young people 
with at least a secondary education a 20-24 years old,%, Ratio of R&D expenditure to GDP,% , Relative price 
level,  EU-27  =  100.0, Investment  in  the  corporate  sector as  a  percentage  of  GDP,  Employment  rate  of  15-64 
year olds,%  - Employment rate of 55-64 year olds,%, Poverty rate,%, Proportion of long-term unemployed in 
the active population,%, Relative standard deviation of regional employment rate,%. 
143 Caritas, Social Platform, University of West Attica, EAPN, ERGO, Solidar, ATD Fourth World, Fundacion 
Secretariado Gitano, The Spanish Confederation of People with Physical and Organic Disabilities (COCEMFE), 
AGE Plarform. 

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8 respondents provided feedback related to minimum wage and not minimum income. 2 respondent 
provided feedback on universal basic income.  

AD HOC CONTRIBUTIONS RECEIVED OUTSIDE THE FORMAL CONSULTATION 
CONTEXT 

The  European  Commission  received  contributions  outside  of  formal  consultations,  from  the  French 
Authorities,  German  District  Parliament,  International  Labour  Office,  and  Youth  Policy  Dialogue. 
French  Authorities  expressed  its  support  for  the  EU  level  initiative  providing  policy  advice  and 
identification of best practices. The German District Parliament highlighted that minimum income fall 
within  the  area  of  national  competence  best  suited  to  develop  tailored  made  solutions  to  specific 
needs.  International  Labour  Office  provided  a  technical  note  listing  a  number  of  specific 
recommendations  for  the  Commission.  They  include:  undertaking  rights-based,  non-discriminatory 
universal  life-cycle  approach  in  the  context  of  access  and  coverage  of  minimum  income;  providing 
dedicated  support for  persons  with  disabilities;  providing  access  to  services  such  as  health  or long-
term  care;  putting  in  place  effective  activation  policies  for  the  beneficiaries;  on  adequacy,  ensuring 
effective access to goods and services defined as necessary at national level, securing life in dignity of 
children  persons  in  active  age  and  older  persons,  taking  into  account  family  composition,  levels  of 
disability  or  other  special  needs  and  well  as  regional  differences,  setting  the  benefit  at  the  level  of 
above the poverty line, that would help people obtain higher levels of income security; on governance, 
putting  in  place  transparent  process  of  setting  and  reviewing  of  adequate  benefit  level,  including 
through  social  dialogue  and  consultation  with  persons  concerned;  carefully  assessing  the  use  of 
means-test; encouraging Member States to set up strong coordination and monitoring mechanisms. A 
participant of the Youth Policy Dialogue, Zofia Borowczyk, underscored the disadvantaged position 
of young women who often face an alternative of either pursuing a professional career or a family. In 
this context, she suggested that social protection policies should provide adequate support for those in 
need so as to enable them to thrive personally and professionally.  

BROAD PUBLIC CONSULTATION ON THE EUROPEAN PILLAR OF SOCIAL RIGHTS 
ACTION PLAN  

Between  14  January  and  30  November  2020,  the  Commission  carried  out  a  broad  public 
consultation144  on  actions  to  implement  the  European  Pillar  of  Social  Rights,  feeding  into  the 
European Pillar of Social Rights Action Plan adopted by the Commission on 4 March 2021. Principle 
14 on Minimum Income was within the scope of that consultation. The results have been summarized 
in the  Staff Working  Document  Accompanying  the  European  Pillar  of  Social  Rights  Action  Plan145 
and are quoted below.  

According to civil society organisations active in the fight against poverty and social exclusion, the 
Action Plan should bring about a rights-based, person-centred integrated strategy to fight poverty and 
exclusion, for all groups, through the life course. Some respondents stated that an overarching strategy 
against  poverty  should be centred  around  a  European  Framework  Directive  on Minimum  Income146 
and should link up with thematic strategies for key target groups, namely children, homeless people, 
older people, people with disabilities, migrants, Roma, LGBTIQ people, and other vulnerable and/or 

144 https://ec.europa.eu/social/main.jsp?catId=1487&langId=en.  
145 https://ec.europa.eu/social/BlobServlet?docId=23704&langId=en. 
146 See also Germany, AGE Platform, Belgian Anti-Poverty Network. 

75 

 
 
                                                           
marginalised  groups147.  There  was  a  general  concern  about  the  ‘feminisation’  of poverty  and  social 
exclusion due to gender-based inequalities148. 

In relation to minimum income, employers indicate that the Council conclusions of 12 October 2020 
on “Strengthening Minimum Income Protection in the COVID-19 Pandemic and Beyond” state that it 
is  for  Member  States  to  design  and  implement  national  provisions  ensuring  minimum  income 
protection.  They  would  see  a  merit  in  strengthening  the  ongoing  work  as  part  of  the  European 
Semester  process,  including  further  elaboration  of  the  EU  benchmarking  framework149.  Germany 
supports an EU framework to support and to complement the activities of the Member States in this 
field. 

The European Parliament, many civil society organisations, trade unions and citizens support the idea 
of  a  European  framework  directive  for  minimum  income,  which  would  guarantee  adequate, 
accessible and enabling minimum income support150. Several citizens call for the introduction of an 
unconditional basic income. According to Eurocities, the lessons learned from recent pilot projects 
in Finland, Spain and Scotland should be taken into account151. On the other hand, employers warn 
against  raising  unrealistic  expectations  on  EU  action  regarding  minimum  income,  also  in  view  of 
limited EU competences in this field. They stress that measures are mainly needed at national level152. 

According to civil society organisations, minimum income benefits should be provided proactively 
to  tackle  the  high  non-take-up  and  to  ensure  that  the  transition  to  other  types  of  benefits  happens 
without  delay153.  There  should  be  no  negative  conditionality  linked  to  total  (or  partial)  cuts  in 
adequate  minimum  income  support154  and  benefits  could  be  provided  through  a  system  of  ‘digital 
cash’  directly  aimed  at  the  lower-income  groups155.  The  instrument  should  be  based  on  common 
definitions  including  adequacy  linked  to  at  least  60%  of  the  median  equivalised  disposable  income 
after  social  transfers  (poverty  threshold)  and  underpinned  by  national  reference  budgets156.  Some 
contributors ask for increased minimum income levels for people with disabilities or chronic diseases, 
who  systematically  incur  higher  health  care  expenditure.157  However,  the  discussion  should  not  be 
held  in  solely  monetary  terms,  but  also  take  into  account  broader  social  support  measures  for  self-
sufficiency158. 

Outline of the consultation process: 

147 EAPN, FEANTSA, AGE Platform, Inclusion Europe, ILGA-Europe, EAPN Spain, Caritas Europe, Land of 
Berlin. 
148 Eurocities, German Association for Public and Private Welfare, Caritas Czech Republic (webinar Czechia). 
149 BusinessEurope. 
150 European Parliament Resolution, Social Platform, German Association for Public and Private Welfare, EKD, 
Eurodiaconia,  EWL,  ERGO,  EAPN,  AGE  Platform,  DGB,  Bulgarian  Confederation  of  Independent  Trade 
Unions,  EAPN  Portugal,  EAPN  Spain,  Network  Social  Europe  Baden-Württemberg,  BAGFW,  MMM, 
COFACE,  European  Senior  Organisation  (webinar  Lithuania),  Jusos  Brüssel,  ENIL,  Austrian  Chamber  of 
Labour,  supported  Portugal,  ENNHRI  and  Catalonia;  Italy  rather  sees  room  for  a  Recommendation  on  this 
subject. 
151 Eurocities. 
152 BDA, BusinessHungary (webinar Hungary). 
153 Social Platform; the broader issue of non-take-up of social rights and services is mentioned by the Belgian 
Combat Poverty, Insecurity and Social Exclusion Service, ATD, COFACE and FOREM, among others. 
154 FOREM, Social Platform. 
155 Anti-Poverty Forum. 
156 EAPN, EAPN Portugal, EAPN Spain, ERGO. 
157 Gemeentelijke Werkgroep Toegankelijkheid Medemblik. 
158 Sweden, German Working Group of Young Socialists Brussels. 

76 

 
 
                                                           
Date 

Consultation activity and stakeholders 

2020 

Public consultation with general public on the European Pillar of Social Rights Action Plan European 
Social Partners 

January 2022 

Strategic Dialogue with Civil society organisations 

February 2022 

Thematic debate with European 
Economic and Social Committee, 
Committee of the Regions 

Thematic debate with experts and researchers 

March 2022 

Dedicated hearing with European Social Partners 

April  

2022 

May  

2022 

Exchange with  SPC and Employment 
Committee 

Feedback on the Call for Evidence 

Thematic debate PES Network 

77