Minimum income benefits comprise last resort means-tested support offered by national authorities in EU countries to combat poverty and social exclusion. Minimum income schemes are part of the wider welfare systems.

Minimum income benefits are usually available for people of working age and aim to ensure a minimum standard of living for individuals and their dependents, when they have insufficient or no other means of financial support.

These benefits are an essential instrument across EU countries to sustain income, decrease inequalities and reduce poverty. All Member States have some form of minimum income.

Challenges

Minimum income schemes vary significantly in the adequacy (level) and coverage of benefits, as well as with the articulation with activation measures and enabling social inclusion.

On average, around 35% of the working age EU population at risk of poverty is not covered by minimum income or any other social benefits.

The levels of minimum income benefit are mostly well below national poverty thresholds – varying between 20% to 80% of the national thresholds and only reaching them in a very limited number of countries.

Many countries do not have a well-developed pathway, that enables minimum income recipients to access the labour market. In turn, the overall effectiveness of minimum income schemes in addressing poverty and social exclusion varies.

Policy response

European Pillar of Social Rights

While designing social protection systems is primarily a responsibility of the Member States, the EU has promoted effective minimum income schemes and the active inclusion approach through the European Pillar of Social Rights, and in particular its Principle 14.

In accordance with the European Pillar of Social Rights Action Plan, Council recommendation on adequate minimum income, ensuring active inclusion (2023/C 41/01) provides guidance to implement principle 14.

The recommendation builds on the two earlier policy initiatives and replaces council recommendation 92/441/EEC:

• Council Recommendation 92/441/EEC on common criteria concerning sufficient resources and social assistance in social protection systems  calls on Member States to recognise the right to social assistance and sets out principles and guidelines to implement this right
• Commission Recommendation 2008/867/EC on the active inclusion of persons excluded from the labour market calls on Member States to combine adequate income support with inclusive labour market measures and access to quality services, in an integrated active inclusion strategy. The implementation of the Recommendation was reviewed in 2013 and 2017.

The Commission proposal was supported by a staff working document which  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.

Social Protection Committee

In 2018 the Social Protection Committee approved a dedicated benchmarking framework to support the monitoring of minimum incomes, including in the European Semester, and to facilitate upward convergence.

The framework covers adequacy, coverage, activation elements and access to services relevant for the minimum income schemes. It includes outcome and performance indicators and allows undertaking an assessment of the respective elements of the schemes, in particular the adequacy of income support by a twofold indicator.

The Council recommendation calls the Commission and the Social Protection Committee to prepare on triennial basis a joint report on the progress made in implementing it. The first joint report on minimum income was delivered to provide an overview of the current state of play as regards minimum income in the EU Member States.

Council Conclusions

In 2020, Council Conclusions on Strengthening Minimum Income Protection to Combat Poverty and Social Exclusion in the COVID-19 Pandemic and Beyond, recalled that minimum income protection, accompanied by activation and enabling services, plays a vital role in mitigating the risk of poverty and social exclusion and supports the most disadvantaged in society, both now and in the future.

Funding

To support the actions in this area Member States can also rely on funding at EU level, in particular from the European Social Fund Plus and the Recovery and Resilience Facility.

Further measures

Work on further measures in this area is regularly undertaken by the Social Protection Committee, for example through Peer reviews aimed at bench-learning and exchanges of good practices.

In addition, the SPC has set up the Minimum Income Network (MINET), as its working group to regularly exchange experience and good practices among Member States’ experts in the field of minimum income .  

The Commission monitors developments with minimum income schemes through the European Semester.

The Joint Employment Report contains information about the adequacy of schemes.

The country reports take stock of relevant reforms at national level. Where needed, country-specific recommendations may be issued to the Member States.

Related Projects

• Minimum Income Network (MINET): a network for mutual learning and the exchange of best practices on minimum income
• EU Programme for Employment and Social Innovation (EaSI) - Projects
• Exploratory study: filling in the knowledge gaps and identifying strengths and challenges in the effectiveness of Member States' minimum income schemes
• Study about the methodology to measure the returns on investment from integrated social assistance schemes: a study to explore a possible methodology and analyse various aspects of these schemes, including coverage, take-up, adequacy and access to a selected number of services.
• European Minimum Income Network (EMIN): a pilot project for an informal Network of organisations and individuals committed to achieve the progressive realisation of the right to adequate, accessible and enabling Minimum Income Schemes
• European Reference Budgets Network: a pilot project to create a common methodology for comparable reference budgets across EU Member States