Minimum income: more effective support needed to fight poverty and promote employment

The proposed Council Recommendation on adequate minimum income ensuring active inclusion sets out how Member States can modernise their minimum income schemes to make them more effective, lifting people out of poverty, while promoting the labour market integration of those who can work.

Minimum income is cash payments that help households who need it to bridge the gap to a certain income level to pay the bills and live a life in dignity. They are particularly important in times of economic downturns, helping to cushion drops in household income for people most in need, thereby contributing to sustainable and inclusive growth.

Well-designed social safety nets to help people in need

While minimum income exists in all Member States, their adequacy, reach, and effectiveness in supporting people vary significantly.

Today’s proposal for a Council Recommendation offers clear guidance to Member States on how to ensure that their minimum income schemes are effective in fighting poverty and promoting active inclusion in society and labour markets.

Member States are recommended to:

• improve the adequacy of income support
• improve the coverage and take-up of minimum income
• improve access to inclusive labour markets
• improve access to enabling and essential services
• promote individualised support
• increase the effectiveness of governance of social safety nets at EU, national, regional and local level, as well as monitoring and reporting mechanisms

Better impact assessments for fair policies

Today, the Commission also presents a Communication on better assessing the distributional impact of Member States’ policies. It offers guidance on how to better target policies in a transparent way, making sure that they contribute to addressing existing inequalities and taking into account the impact on different geographical areas and population groups, like women, children and low-income households.

The Communication covers guidance on the policy areas, tools, indicators, timing, data and dissemination of the assessment. The guidance presented today is also relevant for Member States when designing their minimum income schemes.

The proposed Council Recommendation on minimum income schemes benefits from simulations for all 27 Member states on their existing schemes and potential reforms using the microsimulation model EUROMOD. This tool, maintained by European Commission’s Joint Research Centre, is freely available and the Commission will further support its use and development across Member States.

Next steps

The Commission proposal for a Council Recommendation on adequate minimum income ensuring active inclusion will be discussed by Member States with a view to adoption by the Council. Once adopted, Member States should report to the Commission every three years on their progress on implementation.

The Commission will also monitor progress in implementing this Recommendation in the context of the European Semester. The proposed instrument – a Council Recommendation – gives Member States enough leeway to determine how to best achieve the objectives of this initiative, taking into account their specific circumstances.