IVS Contribution Exemption for Working Mothers 2024
- giorgiafrisenda
- Feb 9, 2024
- Reading time: 5 min
News No. 6/2024
Article 1 of Budget Law No. 213/2023, paragraphs 180-182, introduced for pay periods from January 1, 2024, a 100% exemption from the IVS social security contributions for female employees with permanent employment contracts, under the following conditions and duration:
Mothers with three or more children, until the youngest child reaches their eighteenth birthday, for the three-year period 2024-2026;
Mothers with two children, until the youngest child reaches their tenth birthday, introduced on an experimental basis, for the period from January 1, 2024, to December 31, 2024, only.
Domestic employment relationships are excluded.
The INPS Social Security Institute, with News No. 27 of January 31, 2024, provided guidelines and instructions for managing the social security compliance related to the contribution exemption measure in question.
Employers Eligible for the Exemption
The employment relationship eligible for the exemption can be established with:
private employers, including non-entrepreneurial entities;
agricultural employers;
public employers;
employers in domestic work relationships are excluded.
Female Workers Eligible for the Exemption
All mother workers, excluding those in the domestic work sector, holding an open-ended employment contract (both full-time and part-time), including apprenticeship contracts, are eligible for the exemption. Should a fixed-term employment contract be converted to an open-ended one, the exemption may legitimately apply from the month of conversion.
Furthermore, the measure is applicable to open-ended subordinate employment relationships established in accordance with the associative bond with a labor cooperative, as per Law No. 142 of April 3, 2001.
Finally, given the substantial equivalence of hiring for temporary agency work to subordinate employment relationships, the contributory exemption in question also applies to open-ended temporary agency employment relationships.
Female workers must be mothers of three or more children, with the youngest not having reached 18 years of age;
on an experimental basis, for 2024 only, the exemption also applies to mother workers with two children, with the youngest not having reached 10 years of age.
The fulfillment of the requirement is crystallized at the date of birth of the third or subsequent child (and for 2024 only, at the date of birth of the second child); no forfeiture of the right to benefit from the contributory reduction in question occurs, even in the event of the premature death of one or more children, the eventual departure of a child from the family unit, or in cases of non-cohabitation of a child or exclusive custody to the father.
Structure and Scope of the Exemption
The exemption amounts to 100% of the IVS social security contributions borne by the female worker (9.19%), up to an annual maximum of 3,000 euros, to be re-parameterized on a monthly basis, while the calculation rate for pension benefits remains unchanged.
Conditions for Entitlement to the Exemption
The exemption amounts to 100% of the contributions borne by the female worker (9.19%), within an annual maximum limit of 3,000 euros, to be re-parameterized on a monthly basis (3,000/12 = 250 euros monthly maximum), thereby applying only up to an annual remuneration of a maximum of 32,644.18 euros (32,644.18 x 9.19% = 3,000 euros).
For new employment relationships,
the exemption may commence from the establishment of the employment relationship, provided that the qualifying conditions are met.
For relationships established or terminated within the month,
the monthly exemption threshold of 250 euros must be re-proportioned by dividing 250 euros by 31 (250/31) = 8.06 euros; the daily exemption thus determined will be multiplied by each day of enjoyment of the contributory exemption.
The maximum threshold of 3,000 euros must be considered valid even for part-time employment relationships, for which no re-parameterization of the due exemption amount is required.
Should the female worker hold multiple employment relationships, she may avail herself of the exemption in question for each relationship.
This benefit is not to be considered a hiring incentive and, therefore, is not subject to the general principles concerning employment incentives established by Article 31 of Legislative Decree No. 151/2015. Furthermore, as it constitutes an exemption solely in favor of the female worker, the employer is not required to possess the DURC.
Coordination with Other Benefits
The contribution exemption under discussion is alternative to the 6%-7% employee contribution exemption stipulated by Article 1, paragraph 15 of the 2024 Budget Law, with the more favorable exemption for the female worker taking precedence.
INPS clarifies that, starting from the month following the utilization of one of the two exemption measures, it is possible to switch to the alternative exemption measure for the employee's share (for instance, for a mother of two children, if the youngest child turns ten years old during 2024, provided the conditions are met, from the month following the child's tenth birthday, she may begin to benefit from the alternative 6% or 7% IVS exemption as per Article 1, paragraph 15 of the 2024 Budget Law).
Operational Instructions
i datori di lavoro autorizzati espongono le lavoratrici per le quali spetta l’esonero valorizzando, a partire dalla denuncia Uniemens di competenza del mese di febbraio 2024, nell’elemento <Contributo>, la contribuzione dovuta calcolata sull’imponibile previdenziale del mese.
The established causal codes are:
“ELA3”, meaning “Exemption pursuant to Article 1, paragraph 180, Law no. 213/2023”, for cases with at least three children;
“ELA2”, meaning “Exemption pursuant to Article 1, paragraph 181, Law no. 213/2023”, for cases with two children.
L’elemento <IdentMotivoUtilizzoCausale>, deve essere presente due volte, valorizzato con il codice fiscale del primo e del secondo figlio, qualora si intenda usufruire del codice “ELA2”; oppure deve essere presente tre volte, valorizzato con il codice fiscale dei tre figli, qualora di intenda usufruire del codice “ELA3”.
The tax code of the youngest child must be mandatorily provided.
If the female worker is a mother of more than three children, it is sufficient to enter the tax codes of only three children; the essential requirement is that the tax code of the youngest child is included.
Any exemption due for January 2024 and February 2024 may be managed as arrears and can be reported in the Uniemens flows for the three months following the publication date of the INPS News (March, April, and May 2024).
Should employers have reported the IVS contribution exemption (6% or 7%) as per Article 1, paragraph 15 of the 2024 Budget Law in the Uniemens flows for January 2024 or in the months of the child's birth, it is necessary to proceed with the restitution of the already offset amount, by specifying the following elements:
“M054”, newly established, meaning “Restitution of 6% share on the exemption pursuant to Article 1, paragraph 15, of the 2024 Budget Law”
“M055”, newly established, meaning “Restitution of 7% share on the exemption pursuant to Article 1, paragraph 15, of the 2024 Budget Law”.
Employers who have suspended or ceased operations and wish to allow their former female employees to benefit from the due exemption may utilize the regularization procedure (Uniemens/vig).
Finally, it is announced that INPS is implementing an application on its institutional portal www.inps.it, where female workers will be able to independently enter their children's tax codes.
We will update you when INPS, through a specific message, communicates the access procedures and how the information submitted to the Institute will be managed.
It is highlighted that the failure of the female worker to communicate the tax codes will result in the revocation of the benefit received, according to the instructions that will subsequently be provided by the social security institution.
Studio News:
Attachment: Declaration template for communicating children's tax codes
References: INPS News no. 27 of January 31, 2024
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