In her second year of working as an English teacher in Milan, Jenna Leary from West Yorkshire, UK, suddenly found herself among the millions in Italy who lost their incomes almost overnight when the coronavirus lockdown on March 10th.
“As a freelancer, I had almost nothing to fall back on,” she says. “All I could think was ‘how am I going to pay my rent?’”
“Suddenly I needed to find out how the social security system works here, which is not something I had ever thought about before, and is beyond my level of Italian.”
The teacher had no choice but to apply for the 600-euro emergency payment, known as the indennità or “bonus 600”, created by the government to help the self-employed through the shutdown.
It was announced a week after the nationwide lockdown measures were enforced.
The “bonus 600” policy was introduced as part of a 25-billion-euro aid package in the so-called “Cura Italia” (“Italy Cure”) decree, signed on March 17th, which Prime Minister Giuseppe Conte said was “for the benefit of the Italian economic system.”
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The payment was made available to freelance contractors, self-employed workers, seasonal workers in tourism, agricultural workers, and entertainment workers, who’d need to have an Italian partita IVA (VAT number) and to be able to demonstrate that they had lost at least two-thirds of their income.
‘100 requests per second’
The scheme opened for applications on April 1st. Almost two months later, some of those who applied within the first few weeks say they’re still waiting for their money.
Things didn’t get off to a promising start. On the day applications opened, the INPS website crashed and malfunctioned as INPS said “up to 100 requests per second” were being submitted, something the agency’s director said had “never been seen before”.
Despite these initial problems, millions were able to submit their applications. Data from INPS showed that 4.74 million applications were received in the first month – between April 1st and April 27th. Of those, 3.45 million had been approved.
INPS stated at the end of April that it had processed most of these first applications and had sent out payments by April 17th.
However, there have been widespread reports of delays and issues with the application process.
INPS data shows some 630,000 of those applications were still waiting to be processed at the time of writing.
Around 300,000 had been rejected because the claimant was already receiving a pension, or the reddito di cittadinanza, a type of unemployment benefit.
And another 225,000 had been rejected for entering details, such as their IBAN number, incorrectly. Those applications could be amended and resubmitted, the INPS said.
‘Huge time pressures’
“Clearly the scheme had to be set up under huge time pressures, but it has a number of defects,” commented Judith Ruddock, a partner at Italian-British accountancy firm Studio del Gaizo Picchioni.
“The main problem we have encountered is that the application procedure is not connected to INPS records,” she explained. “This means that for each client we need to input their address details even though INPS already has these, and any slight deviation from the address held by INPS results in the issue of a message requiring the client to wait to be contacted to clarify the discrepancy.”
“As you can imagine, with so many claimants the waiting time to be contacted is very long.”
The firm advises clients to call the INPS’ numero verde (freephone number), but say clients report various problems in doing so, with one having to call the number 72 times before getting a response, and others saying the advertised English-language support wasn’t available.
Teacher Jenna Leary was among them. A few weeks after she’d made her claim, she explained, INPS contacted her about “irregularities” with her address.
“They demanded a certificate of proof of residence, which is impossible to get at this time with offices closed,” she said.
“I called their hotline repeatedly, as it claimed support was available in English. It took me days to get through, and of course no one spoke English and the staff were rude and impatient,” she said.
“I managed to confirm my details, the staff said the claim was being processed, and hung up without giving me a reference number or anything.”
Over a month later, she says she still hasn’t heard back or received any payments and is currently relying on financial support from her family.
Some claimants also said the application process itself was unclear.
James Tucker, a teacher in Italy’s public school system, says he’s still waiting for his claim to be processed.
“I signed up on the INPS website, I followed the instructions and after a day I was sent half of the 16-digit pin via SMS, the remaining eight digits were to be sent via post.”
“Still at this moment I have received nothing. I’ve called multiple times, after being on hold for 30 minutes plus, only to then speak with someone, who in turn transfers me to someone else, only for that person to hang up the phone.”
“I believe that I’ll never have the chance to claim the emergency funds, even though I’m a school teacher and sports teacher and fully entitled to the payment,” he said, adding that he now has “zero income”.
‘I received the money within one week’
Though it is apparently not made clear during the application process, INPS have in fact waived the requirement for the second, postal part of the pin, Rudduck confirmed – though “this has also caused a little confusion when the second parts arrive by mail and clients don’t understand what to do with them.”
One applicant who received the 600-euro payment successfully is George Young, a freelance translator from the UK living in Trento, northern Italy.
“I received the payment within about a week of the application going on. It all seemed very smooth,” he said, explaining that the application was made via his accountant.
“Although, that said, I didn’t apply until 2-3 weeks after it was initially launched so the INPS system was not as overloaded by that time.”
At the same time, George says his wife applied for Italy’s unemployment benefit (NASpI) which he says was “really quick”, with the first payment arriving within three weeks.
“The process has really impressed me, as has the amount received. Obviously my expectations have been managed by the equivalent benefit in the UK which seems to take longer and pay much, much less,” he said.
Italy is not the only European country to have brought in this type of emergency payment system for the self-employed following the coronavirus shutdown.
Germany, for example, announced its own Emergency Aid Programme (das Soforthilfe-Programm) which includes a €50 billion hardship fund to give grants to small businesses, the self-employed and freelancers.
As Germany is a federal country, individual states have also set up their own schemes, sometimes with differing criteria and conditions.
In Berlin, up until the end of May, applicants who have up to five employees including freelancers can get up to €9,000, while small businesses with up to 10 employees are allowed up to €15,000.
The process of applying for the German scheme has been quite straightforward, with payments made in as little as 48 hours in some cases. The scheme has had both praise and criticism over the size of the payments and the speed with which they’re being issued.
Residents go about their activities on May 20, 2020 in Codogno, southeast of Milan, one of the villages at the epicenter of the coronavirus epidemic in February. AFP
‘A stopgap at best’
In Italy, the most obvious problem with the “bonus 600” is the size of the payments, which is often not sufficient to cover a monthly rent payment: the average rent in the country is around 600 euros a month.
However, rent prices are far higher in most cities, and can rise to double that amount in Italy’s economic capital, Milan – which is often where foreigners are able to find work in the country.
The policy is “a stopgap at best,” said Federico Santi, a senior Europe analyst at Eurasia Group.
The 600-euro payments might be “barely enough” to cover basic necessities – food, bills, rent – “in lower-income regions or areas, at least for households with multiple incomes,” he said.
The flat payment doesn’t take into account the large differences in the cost of living between regions, and is not based on the recipient’s past income.
“The government opted for a flat payment in order to expedite the process and cap the overall bill – and, more cynically, knowing income statements for the self-employed are often not representative,” Santi explained.
For Italy’s self-employed foreign residents, there’s another issue: the lack of support available in languages other than Italian, which leaves them at a disadvantage when trying to access these vital emergency funds.
‘Improvements could be made’
The system could be improved, Ruddock said, “firstly by allowing professionals to liaise with INPS directly in relation to client applications. This would have meant that we could have managed the process without needing to ask our clients to intervene to resolve discrepancies. Many of our clients are not confident in speaking Italian, particularly on the phone and particularly with an institute like INPS.”
“The second major improvement would be if the system was automatically connected to INPS records, so that by inserting the codice fiscale of the client, the address details would appear automatically. This would have saved a huge amount of time and expense in sorting out “discrepancies” which generally were only an alternative method of writing the same address.”
After weeks of uncertainty, the Italian government confirmed on May 16th that the “bonus 600” monthly payment would be extended to cover April and May, although it’s not known if it could continue beyond that
“It’s not sustainable for more than a few months,” Santi from Eurasia group said, “as goes for many of the economic support measures adopted by the government, however generous.”
“A majority of businesses have re-opened this month, but many have not – so there is pressure to extend the payments to June and possibly July,” he explained, adding that other benefits have been extended for longer.
“Beyond that would be a challenge. Of course, this partly depends on the epidemiological picture,” he said.
The government also announced that a higher payment of up to 1000 euros would also be made available to cover losses in May, though the conditions for application for the higher sum have not yet been published.
A spokesperson for INPS declined to answer any questions regarding the “bonus 600” payments.
‘Stopgap’ or life saver?: Italy’s scheme to help the self-employed survive the coronavirus crisis by Clare Speak is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Based on a work at https://www.thelocal.it/20200530/how-well-is-italys-bonus-600-payment-for-the-self-employed-really-working.