Based on available data and evidence, this chapter attempts to assess the effectiveness and performance of social protection for people with disability in Italy. The chapter looks at four main aspects: system coverage, system adequacy, system equity, and system efficiency. It concludes that the system is quite adequate for people able to access all support they could be entitled to but that it suffers from a high rate of non-access and under‑coverage, especially for disability services and among people with less severe disability. Together with significant territorial differences, this creates a system that is neither particularly fair nor particularly efficient.
Disability, Work and Inclusion in Italy
Better Assessment for Better Support
4. The effectiveness of support for people with disability in Italy
Abstract
The national, regional, and municipal responsibility for benefits and services for people with disability is complex in Italy, generating considerable fragmentation of both services and benefits, and sometimes also creating duplication of support in a rather non-transparent way. This chapter attempts to assess the effectiveness of social protection support for people with disability in Italy, by looking at four main aspects: (1) system coverage, (2) system generosity, (3) system equity, and (4) system efficiency. It finds that the Italian system has both strengths and weaknesses.
4.1. The coverage of the social protection system for people with disability
4.1.1. People with severe disability receive social benefits in most cases
In Italy, around 70% of people with severe disability receive some social or income replacement benefits (Figure 4.1, Panel A). This share is in line with the benefit coverage of people with severe disability across OECD European countries on average although below the share observed in many Nordic countries and some Central and East European countries. Coverage by social benefits falls to around 40% for people with moderate disability, a level below the OECD European countries average and only a little higher than for people in Italy with chronic health issues but without disability. Regional differences in overall benefit coverage rates, not presented here, are relatively small in Italy, for both people with severe and with moderate disability.
Overall, most people with self-reported disability in Italy receive social benefits other than disability benefits, a finding that holds true among many OECD European countries. In Italy, 53% of people with severe disability are covered by health-related programmes, compared to the overall 71% who receive any benefit – suggesting that disability benefit is well targeted to those most in need (Figure 4.1, Panel B). The coverage by disability benefits in Italy falls to only 12% for people with moderate disability, however, a low share compared to the OECD Europe average of 21% and shares of 30‑50% in many Nordic countries and some Central and East European countries. Figure 4.1 also shows that in Italy very few people without disability or health issues are receiving disability benefits (false positives). On the contrary, the data do not allow to identify people in need of support who do not receive any benefits (false negatives). With a disability assessment approach that is still predominantly medical, in Italy the group falling through the cracks could potentially include many people with mental health conditions.
In some countries, many people with disability are covered by social assistance programmes, either as a top up to their disability benefit, or as a main benefit if household income is low. In Italy, the coverage of people with disability through social assistance payments is below the OECD Europe average, particularly for people with severe disability. People with moderate disability in Italy also have a coverage from social assistance below average across OECD Europe, but the difference is smaller than for people with severe disability. Finally, some 22% of people with moderate disability receive unemployment benefits in Italy, a share that is much higher than the OECD Europe average. This is potentially a positive outcome if it means that these people are registered with, and engaged by, the Public Employment Service. Data do not allow making this conclusion, however, and other evidence seems to suggest that Public Employment Services in Italy are generally under-resourced and poorly developed (OECD, 2019[1]).
Figure 4.1. Most people with severe disability are covered by income replacement benefits
Note: OECD Europe is a weighted average of the 26 European countries shown.
Source: OECD calculations based on European Union Statistics on Income and Living Conditions (EU-SILC).
For people with disability in Italy, the incidence of and dependence on income replacement benefits across the income distribution is not obvious. On the one hand, social assistance and means-tested benefit receipt will inevitably have a higher incidence among lower-income households. On the other hand, contributory disability benefits could have a higher incidence in higher-income households if low-income households more frequently do not meet the contribution requirements. At the same time, high-income households may also be less reliant on benefits more generally, which could imply a higher rate of benefit incidence among low-income households. Empirical data shed some light on this and the importance of different objectives of social protection, including poverty alleviation and insurance against income loss.
The distribution of benefit receipt across income deciles is flatter in Italy than on average across OECD Europe (Figure 4.2). This means that in Italy a similar share of middle‑income and low-income households receives benefits, among both people with and without disability. High-income households receive less benefits than the other groups but more than average across OECD Europe. Whether this is a desirable outcome, depends on the objectives of the social protection system. In Italy, as in many OECD countries, the social protection system for people with disability has both an insurance role (i.e. the system aims to compensate for a loss in income capacity due to disability) and a poverty alleviating role (i.e. to compensate people for the additional costs of disability). The flat distribution of benefit receipt across income deciles suggests that the insurance effect is stronger than the poverty alleviating effect. In-depth administrative data would be needed to understand the degree to which this is caused by people receiving more than one benefit (e.g. contributory as well as non-contributory payments).
Figure 4.2. The distribution of benefit receipt across income deciles is rather flat in Italy
Note: OECD Europe is the weighted average of 26 European countries: Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
Source: OECD calculations based on European Union Statistics on Income and Living Conditions (EU-SILC).
4.1.2. Home assistance coverage is high, but social services seem underdeveloped
The coverage analysis so far is partial to the extent that it focuses on income replacement benefits only. As discussed in Chapter 3, a large part of the social protection system for people with disability consists of in-kind benefits provided by regional and local governments. Table 4.1 uses administrative spending data for 2019 by regional and local governments on in-kind support for people with disability, overall and per user, to estimate the likely number of users of residential services, home assistance and social services (as no direct data on service users and service coverage is available). The results are shown as a share of people with disability in each geographical area, with coverage of residential services and home assistance compared with the number of people with severe disability, as these services are targeted to this group, and coverage of social services compared with all people with disability, as part of broader employment and social inclusion policies.
Coverage of residential services is very low, at 1% of people with severe disability on average across Italy, while about 26% of people with severe disability seem to receive home assistance. The latter share varies substantially across regions, reaching 70% in the North-East but being around 10% in the South and Centre. In a society aiming to close institutions for people with disability, a low coverage on residential services and a high coverage on home assistance is a very desirable outcome but the large territorial differences are problematic. Social services, however, seem to be insufficient across the country, although again more so in the South, with only 6% of people with severe or moderate disability being serviced on average. It appears that in Italy also social services are targeted to people with severe disability mostly.
Table 4.1. Many people receive home assistance but too few people receive social services
Coverage of regional and local in-kind services for people with disability over the relevant target population, 2019
Note: PWD: Persons with disability, PWSD: Persons without severe disability.
Source: ISTAT (n.d.[2]), Disabilità in cifre, https://disabilitaincifre.istat.it/.
This coverage analysis is limited in three main directions. First, spending and users of services for people with disability does not cover the entire group of people with disability, as support for people with mental health problems or with pathological dependencies are covered (and budgeted) under different areas of spending. Second, this analysis does not allow understanding how many people would like to receive services but remain excluded, nor how many people could benefit from services. Overall, much better data is needed to understand the extent to which people with disability are covered through in-kind support, particularly social and labour inclusion services. Lastly, this analysis excludes the efforts of the Public Employment Services to integrate people with disability, given a lack of respective data.
4.2. The adequacy of the social protection system for people with disability
Overall, the social protection system is quite adequate for people with disability in Italy, possibly explaining the moderate poverty levels of this group and the relatively low disability poverty gap (i.e. the rather small difference in poverty levels between people with and without disability). Figure 4.3. shows that the share of income received from income replacement benefits is higher in Italy than on average in OECD European countries, particularly for people with severe disability.
Figure 4.3. The social protection system seems quite adequate for people with disability in Italy
Note: OECD Europe is the weighted average of 26 European countries: Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
Source: OECD calculations based on European Union Statistics on Income and Living Conditions (EU-SILC).
On the one hand, contributory disability pensions for full and permanent work incapacity are quite generous in Italy, with a replacement rate well above the OECD average (OECD, 2021[3]). On the other hand, people with disability can also claim social protection programmes not targeted to people with disability only, including especially a guaranteed minimum income (Reddito di Cittadinanza). This benefit can be used to complement low disability pensions to the level of the minimum income.
Importantly, in Italy many (older) people with disability receive old-age pensions through early retirement programmes, which are generous and account for a large share of the benefits received for all groups. In line with the findings in Chapter 1, the figure also shows that earnings from work represent a smaller share of total income in Italy than on average across the OECD. Other sources, like family transfers, are somewhat more important in Italy than on average, again especially for people with severe disability.
4.3. The equity of the social protection system for people with disability
A critical distributional issue in Italy is the large North-South divide in social protection coverage. Regional differences in take‑up rates of income replacement programmes are very significant, with a strong impact of the respective financial incentives to claim benefits, resulting in much higher benefit recipiency rates in regions with lower average wages. Regional differences are also very large in respect of the regional capacity to deliver services, albeit in the opposite direction, with Northern regions spending much larger amounts per capita on health and social services for people with disability. Taken together, and probably oversimplifying a very complex issue, Northern regions provide more services directed to meeting the needs of people with disability while Southern regions provide more cash benefits. This is also the result of the different funding mechanisms: Southern regions, being poorer, have less capacity to complement and increase the funds for health and social services received by the national government. On the contrary, social benefits are nationally funded and not bound by, or related to, regional spending capacity.
There is a good case for a renewed legislation on basic minimum levels of services across Italy, which could be a vector guaranteeing a more equal treatment of people with disability across the country. From a legislative standpoint, significant steps have been made in the recent past. For health services, basic minimum levels of services have been updated in 2017. Basic minimum levels of social services have at least found a preliminary definition in the “National plan of interventions and social services 2021‑23”.
A second distributional issue in Italy to emphasise is the relative generosity of regional services per user, in combination with limited population coverage. The analysis shows that spending on regional services, particularly regional social services, is quite high per user. While there are no data on the potential target group, i.e. people who would need to receive services and in-kind benefits but do not, consultations with key stakeholders suggest that regional resources and actual users of the system fall well short of the potential target group. In a context of limited resources, and with very expensive services being provided by the regions, this suggests that only a lucky few get to receive those services. This raises the question how to define who needs help most, highlighting the importance of adequate needs assessments for people with disability, discussed in some detail in Chapter 2 of this report.
4.4. The efficiency of the social protection system for people with disability
It is also crucial to look at the capacity of the social protection system to alleviate poverty in view of the level of public social spending, to understand and assess the efficiency of the Italian system. This section looks at the poverty prevention impact of social protection, by looking at poverty levels that would arise without any social transfers, and contrasts that finding with the cost of social protection. It also discusses, only in a qualitative way, the issue of duplication of services and benefits for people with disability in Italy provided by different levels of government, as available data are not good enough to assess the incidence and cost of such duplications.
4.4.1. The poverty alleviating effect of the social protection system
The capacity of the Italian social protection system to alleviate poverty is below European OECD average in general, but it is relatively better at supporting people with disability. Figure 4.4, Panel A, shows that across OECD European countries, social protection prevents over 35% of persons from falling into poverty, a share comparable for people with and without disability. In Italy, the social protection system reduces the incidence of poverty among people with disability by almost 30%, but that of people without disability by only 18%. It is a particularity of Southern European and Nordic countries that social protection systems do better in alleviating the poverty risk for people with disability than for people without disability. In most other OECD European countries, the opposite situation can be found, with social protection systems having a stronger poverty-alleviating effect for people without disability than for people with disability.
Disaggregating results by disability extent reveals that in Italy, poverty alleviation from social protection is particularly effective for people with severe disability (Figure 4.4, Panel B). The poverty alleviating effect of social protection declines gradually for people with moderate disability, people with health issues who have no disability, and people without disability. Instead, on average across OECD Europe, the poverty alleviating effect is similar for people with severe and moderate disability and only slightly lower for people without disability. Panel B also shows that social insurance has a relatively greater impact on poverty reduction in Italy than on average across OECD European countries. Many factors could explain this, including the relatively low take up of social assistance in Italy compared to other European countries, the relatively high replacement rate of contributory disability benefits, and, as discussed below, the importance of other social insurance programmes like old-age pensions and unemployment benefits.
Figure 4.4. Social protection in Italy reduces the poverty risk of people with disability significantly
Note: OECD Europe represents the weighted average of the 26 European countries shown in Panel A.
Source: OECD calculations based on the EU Statistics on Income and Living Conditions (EU-SILC).
Public social spending is very high in Italy overall, compared to other OECD countries. Figure 4.5, Panel A suggests that total spending on social protection benefits is 35% of GDP in Italy, compared to 29% on average across the OECD. Large part of this spending comes from old age pensions, both in Italy and in many other OECD countries. On the contrary, spending on sickness and disability benefits is relatively low in Italy, at 1.5% of GDP, lower than the OECD average of 2% and much lower than in some of the higher spenders in the north and west of Europe (Figure 4.5, Panel B). This suggests that the poverty alleviating effect for people with disability in Italy is to a considerable degree created by social programmes other than disability benefits, including retirement and early retirement programmes. When evaluating the efficiency of social protection for people with disability in Italy, it is thus critically important to include mainstream programmes such as old-age, unemployment, and social assistance benefits.
Figure 4.5. Social spending is high in Italy but spending on disability programmes is below average
Note: The OECD average excludes Chile, Colombia, Costa Rica, Korea, Mexico, New Zealand, Türkiye and the United States.
Source: OECD calculations based on OECD datasets: 11. Government expenditure by function (COFOG), https://stats.oecd.org/Index.aspx?QueryId=61325 SNA93; GDP and spending – Gross domestic product (GDP) – OECD Data, https://data.oecd.org/gdp/gross-domestic-product-gdp.htm; and Conversion rates – Exchange rates – OECD Data, https://data.oecd.org/conversion/exchange-rates.htm.
There are efficiency gains to be made in Italy as the large social spending – driven by old-age pensions mostly – does not translate into an equally large poverty alleviating effect of the social protection system. In countries where social spending is comparable to that of Italy, like France or Belgium, the poverty alleviating effect of social protection is well above OECD average. Instead, countries with a comparable average poverty alleviating effect, like Luxembourg and Portugal, spend less in social protection benefits. To improve the efficiency of the system, Italy may need to consider a stronger emphasis on working-age benefits which are relatively ungenerous, compared to retirement and early retirement entitlements.
4.4.2. Duplications and missing links in the Italian disability system
In a system as complex as the Italian system of disability benefits and services, the lack of integrated information makes it impossible to clearly identify coverage gaps on the one hand and benefit and service overlaps, or duplications, on the other. Identifying and addressing gaps and overlaps would be essential for improving the effectiveness and efficiency of the system.
The Italian social protection system for people with disability is divided between a national component (mostly providing income replacement) and several subnational components (mostly providing in kind support). Overlaps and coverage gaps may occur because of the lack of exchange of data and information across stakeholders and government levels, including through the way in which assessments are conducted. As discussed in Chapter 2, predominantly medically driven disability status assessments which determine eligibility for most benefits are largely detached from needs assessments which take a broader view on disability and determine eligibility for services. This disconnection makes the system inefficient for both people with disability and the main actors in the system and contributes to the coverage gaps.
Major duplications of support occur within subnational systems. The main issue is that the co‑ordination between the health and the social domain is limited in Italy, in most regions, and differently enacted across and even within regions. When it comes to supporting people with disability, however, the health and social domain offer services and benefits that not only can be similar in many cases (e.g. both offer rehabilitation and homecare services), but their separation can be detrimental to providing a holistic support to people with disability. As a result, some people with disability are covered under a multiplicity of individual plans (rehabilitative, educative, support to independent living) which rarely converge into a consistent long-term and tailored life plan for people with disability but rather follow the availability and eligibility criteria of regional, provincial, and local programmes and projects. Many more people with disability are left uncovered from any such service, given the high cost of these individual plans. Also, because of the large expenditure on oftentimes duplicated interventions, some crucial aspects to support people with disability are left uncovered. In Italy, both labour inclusion policies and poverty eradication policies (e.g. Inclusion Pact, inclusive work stages, measures for extreme poverty, social housing, regional and municipal income support, community-building projects, etc.) are limited.
References
[2] ISTAT (n.d.), Disabilità in cifre, https://disabilitaincifre.istat.it/.
[3] OECD (2021), Pensions at a Glance 2021: OECD and G20 Indicators, OECD Publishing, Paris, https://doi.org/10.1787/19991363.
[1] OECD (2019), Strengthening Active Labour Market Policies in Italy, Connecting People with Jobs, OECD Publishing, Paris, https://doi.org/10.1787/160a3c28-en.