Universal Single Allowance 2021. What will change?

The one-time allowance will be provided to the members of the household (the beneficiaries) for each child considered dependent, based on the family's economic situation as measured by ISEE (Indicator of Equivalent Economic Situation).

ISEE measures the overall economic level of the household, unlike the so-called "household allowances" to date, which take into account only the income of the household.

The single allowance benefit will be guaranteed equally to both parents or, in their absence, to the person exercising parental responsibility.

The one-time allowance may be claimed through a monthly disbursement, similar to what has been the case with household allowances to date, or through access to a tax credit designed to lower the recipient's income taxes.

The check will replace many benefits to date provided by different agencies (as we will see below), with the intention of simplifying their administration and speed of delivery.

The full compatibility of the new measure with the provision of citizenship income is established by the same enabling act.

The one-time allowance will be recognized monthly:

• For each dependent minor child;
• For the so-called "unborn," as early as the seventh month of pregnancy.
• for adult children but with a specific reduction in the amount.  

In case the benefit is claimed for children over the age of 18 (dependent), the same will be guaranteed only until the child reaches the age of 21. In this case, there will also be the possibility of requesting that the benefit be paid directly to the child over the age of 18, fostering his or her autonomy. 

However, the allowance is granted only if the adult child attends school or vocational training, a degree program, is in an internship or limited employment (with total income of less than a specified annual amount), or is registered as unemployed and seeking work with a job center or employment agency, or performs universal community service.

Enhancements, ranging from 30 percent to 50 percent, will be made to the one-time allowance in the case of children with disabilities until, again, the child reaches the age of 21. Beyond this age limit, the allowance will still be guaranteed to parents of children with disabilities, but without the relevant surcharge, and provided that the child is still a dependent. 

The check applicant shall cumulatively: 

1. Be an Italian citizen or a citizen of a European Union member state, or his or her family member, who holds the right of residence or the right of permanent residence, or be a citizen of a non-EU state who holds an EU long-term resident's permit or a residence permit for work or research purposes of at least one year's duration 
2. Be subject to the payment of income tax in Italy
3. Be resident and domiciled with dependent children in Italy for the duration of the benefit
4. Been or be resident in Italy for at least two years, even if not continuous, or hold an employment contract of indefinite or fixed-term duration of at least two years.

The single allowance is intended to replace a number of family support measures, including:

1. l'Allowance to households with at least three minor children, as provided for in Article 65 of Law No. 448 of Dec. 23, 1998. A measure introduced about 20 years ago, which provides an additional economic benefit for families with 3 dependent minor children
2. the birth/adoption award, provided by Article 1, Paragraph 353, of Law No. 232 of December 11, 2016. Introduced by the 2017 Stability Law, the benefit consists of a one-time contribution, upon completion of the seventh month of pregnancy or upon adoption
3. the best known IRPEF deductions for dependent children, provided for in TUIR Article 12(1)(c) and (1a), which are due to all employees with dependents through a mechanism of inverse proportionality (clarification of future laws implementing the legislative delegation is awaited on this point)
4. the birth support fund, governed by Article 1, paragraphs 348 and 349, of Law No. 232 of Dec. 11, 2016, aimed at facilitating access to credit for families with one or more children up to three years of age by securing at banks and intermediaries specific guarantees
5. the aforementioned household allowance, provided for in Article 2 of Decree Law No. 69 of March 13, 1988, as amended.
6. l'birth allowance, most recently amended by Article 1, Paragraph 340 of Law No. 160 of December 27, 2019. It is recognized for each child adopted or born within the year and is recognized until the first year of age or until the first year of adoption, based on ISEE. 

It would seem the government's intention, to prepare and define the new mechanism of the so-called "Single Allowance" as early as July 2021.

In our view, it would perhaps be counterproductive to introduce a new system for administering household allowances in the middle of the current fiscal year. In any case, we await regulatory developments in the coming months, following the publication of the enabling act, to draw conclusions.