IVS Contribution Exemption for Working Mothers in 2024
- Feb. 9, 2024
- Reading time: 5 min
News No. 6/2024
Article 1 of Budget Law No. 213/2023, in paragraphs 180–182, introduced a 100% exemption from the IVS social security contribution portion for pay periods beginning on or after January 1, 2024, for female employees with permanent employment contracts, subject to the following conditions and duration:
Mothers of three or more children, until the youngest child turns 18, for the three-year period 2024–2026;
Mothers of two children, until the youngest child turns 10, introduced on a trial basis, solely for the period from January 1, 2024, to December 31, 2024.
Domestic employment relationships are excluded.
In Circular No. 27 of January 31, 2024, the National Social Security Institute (INPS) provided guidelines and instructions for handling the social security obligations related to the contribution exemption measure in question.
Employers Who May Grant an Exemption
The employment relationship covered by the exemption may be with:
private employers, including those who are not business owners;
agricultural employers;
public employers;
Employers of domestic workers are excluded.
Female workers who are eligible for the exemption
All working mothers—with the exception of those employed in the domestic service sector—who hold permanent employment contracts, whether full-time or part-time, including apprenticeship contracts, are eligible for the exemption. If a fixed-term employment contract is converted to a permanent contract, the exemption may be legitimately applied starting from the month in which the conversion to a permanent contract takes effect.
The measure also applies to permanent employment relationships established pursuant to a close associative relationship with a workers’ cooperative under Law No. 142 of April 3, 2001.
Finally, given that temporary agency employment is essentially treated the same as regular employment, the contribution exemption in question also applies to permanent employment contracts entered into for the purpose of temporary agency work.
Female employees must be mothers of three or more children, the youngest of whom must be under 18 years of age;
On a trial basis, for 2024 only, the exemption also applies to working mothers of two children, provided that the youngest child is under 10 years of age.
The requirement is met as of the date of birth of the third or subsequent child (and, for 2024 only, as of the date of birth of the second child), and there is no forfeiture of the right to benefit from the contribution reduction in question, even in the event of the premature death of one or more children, the departure of one of the children from the household, or in cases where one of the children does not live with the family or is in the sole custody of the father.
Structure and Scope of the Exemption
The exemption amounts to 100% of the IVS social security contribution payable by the female employee (9.19%), up to a maximum of 3,000 euros per year, to be recalculated on a monthly basis, without affecting the rate used to calculate pension benefits.
Conditions for Eligibility for the Exemption
The exemption amounts to 100% of the employee’s contribution (9.19%), up to a maximum of 3,000 euros per year, to be recalculated on a monthly basis (3,000/12 = a maximum of 250 euros per month), and therefore applies only up to an annual salary of 32,644.18 euros (32,644.18 × 9.19% = 3,000 euros).
For new employment relationships,
The exemption may take effect from the start of the employment relationship, provided that the necessary conditions are met.
For relationships established or terminated during the month,
The monthly exemption threshold of 250 euros must be recalculated by dividing 250 euros by 31 (250/31) = 8.06 euros; the daily exemption thus determined will be multiplied by the number of days for which the contribution exemption is claimed.
The maximum threshold of 3,000 euros is to be considered valid even in the case of part-time employment relationships, for which no adjustment of the amount of the exemption due is required.
If a female employee has multiple employment relationships, she may avail herself of the exemption in question for each employment relationship.
This benefit is not intended as a hiring incentive and, therefore, is not subject to the general principles governing employment incentives established by Article 31 of Legislative Decree No. 151/2015; furthermore, since it takes the form of an exemption granted solely to the female employee, the employer is not required to hold a DURC.
Coordination with Other Incentives
The contribution exemption under discussion is an alternative to the exemption from the 6%–7% employee contribution provided for in Article 1, paragraph 15, of the same 2024 Budget Law, and the exemption that is most favorable to the female employee takes precedence.
The INPS specifies that, starting the month following the use of one of the two exemption measures, it is possible to switch to the different exemption measure for the portion payable by the female worker herself (For example, for a mother of two children, if her youngest child turns ten years old in 2024, and provided the requirements are met, she may begin to benefit from the alternative 6% or 7% IVS exemption provided for in Article 1, paragraph 15, of the 2024 Budget Law starting the month following the child’s birthday.)
Operating 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 reason codes that have been established are:
“ELA3,” which stands for “Exemption under Article 1, paragraph 180, of Law No. 213/2023,” in cases where there are at least three children;
“ELA2,” which stands for “Exemption under Article 1, paragraph 181, of Law No. 213/2023,” applies in cases where there are 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 ID number of the youngest child must be included.
If the employee is the mother of more than three children, it is sufficient to enter the tax ID numbers of only three children; the important thing is to include the tax ID number of the youngest child.
Any exemptions due for January 2024 and February 2024 may be treated as back payments and reported in the Uniemens filings for the three months following the publication date of the INPS “ News ” (March, April, and May 2024).
If employers reported the IVS exemption provided for in Article 1, paragraph 15, of the 2024 Budget Law (6% or 7% exemption) in the January 2024 Uniemens filings or in the months of the child’s birth, they must refund the amount already adjusted, taking the following factors into account:
“M054,” a newly established code meaning “Refund of the 6% portion of the tax relief under Article 1, paragraph 15, of the 2024 Budget Law”
“M055,” a newly established code meaning “Refund of the 7% portion of the tax relief under 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 take advantage of the exemption to which they are entitled may use the regularization procedure (Uniemens/vig).
Finally, please be advised that INPS is implementing an application on its official website www.inps.it, where female workers will be able to independently enter their children’s tax ID numbers.
We will update you as soon as the INPS issues a specific announcement detailing the procedures for accessing the system and how the information received by the Institute will be handled.
Please note that failure by the employee to provide her tax identification numbers will result in the revocation of the benefit received, in accordance with the guidelines to be provided at a later date by the Social Security Administration.
News study:
Attachment: Sample form for reporting children’s tax ID numbers
References: News INPS No. 27 of January 31, 2024
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