In Italy, those who have paid fewer contributions can in some cases benefit from a higher pension than those who have paid many more. The paradox is highlighted in an analysis by the Social Security office of the CGIL and the SPI entitled ‘The effects of pension equalization in 2026’ (you can download it here).
The structural problem: fewer contributions, more bonuses
The problem is structural. The additions to minimum treatments and welfare benefits have ended up creating a distortion in the social security system. With the result that those who have accrued fewer contributions can receive a higher allowance than those who have paid more. In this context, the revaluation of pensions in line with inflation ends up exacerbating this paradox (we will see why later).
The study compares three emblematic (and obviously fictitious) cases. A pensioner who has accrued 384.62 euros in pension, another who has accrued 692.31 and a third who, having paid more, has a check of 807.69 euros per month. Let’s talk about gross figures.
The retirement stories of Gianni, Francesco and Carmelo
The first pensioner, Mr. Gianni, is entitled to the minimum supplementary quota, a mechanism that increases the amount of low pensions until it reaches a minimum threshold established by law, if the calculation based on the contributions paid is lower than this figure. Added to this are 132.44 euros of “social increase”, a further contribution to which pensioners with an income of less than 9,727 euros per year are entitled (in 2026).
Finally, our pensioner is entitled to another 13.27 euros of transitional increase in minimum pensions, a further increase, distinct from the social increase, provided for by legislation for specific categories of pensioners. This leads to a gross of 749.11 euros per month, or 9,738 euros per year. Since the social increase is tax-free, the taxable amount is 8,016 euros, i.e. still below the no tax area set at 8,500 euros. Consequently, the weight of additional taxes and Irpef is equal to zero.
In the second case, the pensioner (named Francesco) has accrued a pension of 692.31 euros per month. He is not entitled to the minimum supplement and receives only 43.53 as a social bonus, although he has to pay around twenty euros in monthly deductions since the taxable amount in this case is around 9 thousand euros. Between the (modest) burden of Irpef and additional taxes and the absence of minimum integration, the pensioner receives an allowance of just 710 euros per month.
Finally the last case. Mr. Carmelo has a calculated pension of 807.69 euros, but the “bonuses” are non-existent, while the taxes amount to around 62 euros per month. The result is a net of 746 euros.
| Calculation item | Pensioner 1, Mr. Gianni | Pensioner 2, Mr. Francesco | Pensioner 3, Carmelo |
| Pension accrued on calculation | €384.62 (5,000 €/year) | €692.31 (9,000 €/year) | €807.69 (10,500 €/year) |
| Integration to the Minimum Treatment | + €218.78 | €0.00 | €0.00 |
| Minimum transitional increase | + €13.27 | €0.00 | €0.00 |
| Social increase and increases | + €132.44 (Irpef exempt) | + €43.53 | €0.00 |
| Total gross check | €749.11 | €735.84 | €807.69 |
| Annual tax base | €8,016.71 | €9,000.03 | €10,500.00 |
| Monthly withholdings (Irpef + additional) | €0.00 | – €25.37 | – €61.72 |
| Net pension in your pocket | €749.11 | €710.47 | €745.97 |
In short, despite having paid fewer contributions, Mr Gianni is the pensioner with the highest allowance. Carmelo and Francesco have accrued a higher pension. Maybe after many years of work and sacrifices. But their net is lower. A paradox. The CGIL thus highlights the absurdity of the mechanism: “Those who have worked for fewer years, or in a more discontinuous manner, but fall within the welfare cases or within the thresholds for social increases, end up receiving higher net benefits”.
If the basic principle is acceptable, i.e. not leaving anyone behind, the final effect is a distortion that is to the disadvantage of those who have paid more contributions and paid more taxes, probably by virtue of a higher income, of course, but not infrequently also of a more continuous working career.
In short, according to the union we are “faced with an inequality that is difficult to justify on a constitutional and equity level”. Which does not mean that welfare benefits and social increases should be cancelled, since “they remain essential tools to combat poverty”; on the contrary, the CGIL highlights, the coordination between social security policies, welfare policies and the tax system should be reviewed to avoid “penalizing precisely the segment of poor pensioners who have supported the system with years of contributions”.
The revaluation benefits pensions under the no tax area
The union points out that with current rules the revaluation of pensions based on inflation ends up further accentuating this paradox. The mechanism is simple. By not paying Irpef or additional taxes, pensions that fall within the tax-free threshold end up benefiting from a greater increase, whereas the increase of those who receive a check exceeding 8,500 euros will be partly absorbed by taxes.
In short, if the amount of the pension is higher, the taxable amount on which Irpef and additional taxes are calculated will also increase. With the result that the net increase will be lower. Let’s give some numbers. According to the table published by Spi-Cgil, a pension of 550 euros gross in 2022 rose to 641 euros in 2026 (in this case the net is the same), with a jump of 16.46%, while for checks equal to 800 and 1,000 euros the net increase was 12.27% and 12.93% respectively.
“The consequence – highlights the union – is a progressive erosion of the differential between pensions accrued with years of regular work and welfare benefits: with the same conditions of need, the final economic result can surprisingly be more favorable for those who receive assisted treatments or increased minimum pensions, compared to those who have built a higher social security pension, but subject to taxation”.
Gianni, Francesco, Carmelo: the cases of the three pensioners in detail
Below is the detailed summary of the three cases.
Gianni (pensioner 1)
- Pension accrued on calculation: €384.62 per month (€5,000/year)
- Supplements and increases: + €218.78 minimum supplement, + €13.27 transitional increase and + €132.44 social increase (tax free)
- Irpef payment and additional: €0.00
- Final net in your pocket: €749.11 per month
Francesco (retired 2)
- Pension accrued on calculation: €692.31 per month;
- No integration at a minimum; receives only + €43.53 of social surcharge
- Withholdings equal to €25.37 per month;
- Final net in your pocket: €710.47 per month.
Carmelo (retired 3)
- Pension accrued on calculation: €807.69 per month;
- Supplements and surcharges: €0.00;
- Tax withholdings of €61.72 per month;
- Final net in your pocket: €745.97 per month (€3.14 less than Gianni, despite having accrued a higher pension)