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European Commission

MEMO

Brussels, 4 April 2014

Minimum income: adequate schemes necessary to combat poverty

Well-designed adequate income support schemes can be powerful tools to fight poverty and increase labour market participation, and therefore contribute to reaching the Europe 2020 target of reducing the number of people in poverty and social exclusion by at least 20 million by 2020. This is the main conclusion of the conference on Addressing social divergences in European societies: improving minimum income support organised by the European Commission on 3 April 2014.

The objective of the seminar was to help Member States design adequate income support schemes. This seminar also helps stakeholders to reply to the consultation that will open later this spring following the publication of the Communication "Taking stock of the Europe 2020 Strategy" (see MEMO/14/149). The event organised by the European Commission brought together 120 policy-makers and experts representing civil society, employee and employer organisations and the private sector.

Speaking at the seminar, László Andor, European Commissioner for Employment, Social Affairs and Inclusion said: "It is the role of Member States to provide an adequate minimum income to ensure people can step out of poverty and escape social exclusion. It is also a smart investment: by supporting people at crucial moments of their lives, Member States will avoid having to pay much higher financial and social bills in the future. Evidence shows that Member States with good social welfare policies will in the long run be the most competitive and prosperous.”

In February 2013 the Commission published the Social Investment Package which proposes ways to modernise Europe’s welfare systems (see IP/13/125, MEMO/13/117, IP/14/179). Improving minimum income support is a key aspect of more efficient and effective social policies. In line with the active inclusion strategy endorsed by all Member States, the Commission argues that Member States' minimum income schemes should be able to secure adequate livelihoods, designed on the basis of people's real needs. This should be complemented by inclusive labour market policies and efficient, affordable and high-quality services that enable people to move out of poverty.

After Commissioner Andor's opening remarks, Mr. Vassileios Kegkeroglou, Greek Deputy Minister of Labour, Social Security and Welfare, Mr. Piet Colruyt, Director of the Colruyt Group, and Mr Georgios Dassis, President of the Workers' Group of the European Economic and Social Committee, addressed the seminar. This was followed by interactive workshops on a number of topics.

Participants concluded that the main challenges regarding minimum income schemes are ensuring their adequacy, coverage, and their effective linking to activation and enabling services. In fact, activation and income support go hand in hand, and having one without the other may prove inefficient and ineffective. The seminar also showed that 'one-stop-shops' providing both social services and benefits can simplify and facilitate access to those services while maximising their impact. Innovative information and communication technologies can offer solutions to that effect.

Background information

The ‘Social Investment Package’ (SIP), proposes ways to modernise Europe’s welfare systems. 'Preparing' people to confront risks throughout their lives, rather than simply 'repairing' the consequences, is part of the social investment approach. The SIP calls for adequate standards of living, supported by integrated and quality services and benefits. It stresses the importance of activating and enabling policies to improve social inclusion and access to the labour market. To do so, it calls for more effective and efficient social spending through more efficient administration and targeting.

The Social Investment Package will underpin the reforms monitored by the Commission through the European Semester, EU's annual cycle of economic policy guidance and surveillance. Member States' performance will be assessed through indicators underpinning the employment and poverty targets of the Europe 2020 strategy and those included in the Social Protection Performance Monitor. Further policy expertise will be provided by the Social Protection Committee in the framework of the Social Open Method of Coordination. EU financial support – notably from the European Social Fund – will help Member States to implement the reforms set out in the Social Investment Package.

The SIP calls on Member States to set reference budgets that ensure adequate livelihoods by considering consumption patterns, costs of living, different life situations and types of households on the basis of the methodology designed by the Commission in cooperation with the Social Protection Committee.

The European Reference Budgets Network is a pilot project, funded by the European Commission and initiated by the European Parliament, aiming to develop a common methodology for the construction of high-quality cross-national comparable reference budgets in all EU Member States. Reference budgets outline a level of well-being applicable to different types of households. The project also aims to establish a network with the capacity to provide intellectual and practical support to the design and development of complete reference budgets in all EU Member States. The project began in January 2014 and will run for 15 months with a total budget of 999.472,00 €.

The European Minimum Income Network (EMIN) is a two year project (2013-2014) funded by the European Commission (for a total budget of 995 950 €), that aims to take the necessary steps towards the progressive realisation of adequate and accessible minimum income schemes in EU Member States, in line with the European Commission’s Active Inclusion Recommendation of 2008 which was endorsed by all Member States, the Europe 2020 strategy and in the context of the European Platform against Poverty and Social Exclusion. The country teams of the 5 focus countries (Belgium, Denmark, Ireland, Italy and Hungary) have drafted a first report presenting the situation in these Member States, identifying challenges related to issues such as non-take-up, coverage and adequacy and issuing recommendations based on these experiences to take to the European level.

For more information

DG EMPLOYMENT website

László Andor's website

Follow László Andor on Twitter

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