The European Pillar of Social Rights Action Plan sets out three EU headline targets for 2030: (1.) The number of people at risk of poverty or social exclusion should be reduced by at least 15 million, (2.) At least 78% of the population aged 20 to 64 should be in employment and (3.) At least 60% of all adults should participate in training every year.

The EU had already made it its target for 2010 to 2020 to reduce the number of people at risk of poverty or social exclusion in the EU by 20 million – however, this target was missed by a large margin. In its 2022 Work Programme, the Commission has now again announced a Minimum Income Initiative. In the AK’s opinion, a legally binding Directive would be the most suitable instrument to lay out definitions, basic principles and minimum standards at EU level. The fact, that the Commission is now holding out the prospect of presenting a proposal for a Council Recommendation does unfortunately not only fall short but it also falls back behind earlier announcements by the Commission to present a Directive. Hence, it will be even more important that the recommendations present clear guidelines, which national schemes can follow.

Necessary recommendations, also for Austria

As the Commission states in the Call for Evidence, circa 35% of people at risk of poverty in the EU cannot claim a guaranteed minimum income or other social benefits. Hence, it is essential from the AK’s point of view that access to these is guaranteed for all social groups needing this support, including all recognized refugees and people granted subsidiary protection. Apart from that, the application process for social benefits has to be designed in such a way that people do not feel stigmatised or degraded. In order to provide real protection against the poverty trap, the amount of guaranteed minimum income must be at least raised to the respective poverty line. Furthermore, high-quality training and advisory services should be provided to support re-entering the labour market if possible.

Benefit systems must under no circumstances generate existence-threatening situations through disproportionate sanctions. Laws and notifications should be clearly worded and correspond to the principle of legal certainty. Furthermore, the guaranteed minimum income should be supplemented by further benefits, such as family support, housing assistance as well as by social infrastructure services such as childcare or healthcare. Wage development, which can effectively be supported by the comprehensive cover of collective agreements, also plays an important role in preventing poverty.

For Austria, the Social Welfare Act, which was introduced in 2018, has led to a huge retrograde step in respect of fighting and preventing poverty. Among other, upper limits for social benefits instead of minimum standards were set. The benefit cuts for certain groups and the restriction of additional possible support programmes of the Federal States have to be withdrawn quickly. Apart from that, the benefit amount has to be significantly increased, at least to the level of the poverty line — the current enormous price rises illustrate the importance of this demand.

Further Information:

AK EUROPA: European Commission initiative on a Council Recommendation on adequate minimum income schemes

AK EUROPA Policy Brief: Action Plan on the Pillar of Social Rights and EU Social Summit - Social Realignment of the EU needed

AK EUROPA: Minimum income – Has the time come for an EU Directive?

EU Commission: Recommendation on minimum income

A&W-Blog: Action plan for a more social European Union  (German Only)