Social Security Contribution Exemption and Hiring of ADI and SFL Beneficiaries

Social Security Contribution Exemption and Employers: When New Hires Are ADI and SFL Beneficiaries

Starting September 1, 2023, with Decree-Law 48/2023, the legislator introduced the Inclusion Allowance (Assegno di Inclusione, ADI) and the Support for Training and Employment (Supporto per la Formazione e il Lavoro, SFL), two income and employment support measures aimed at vulnerable groups. These measures partially replace the Citizenship Income until December 31, 2023, and fully from January 1, 2024. From January 1, 2024, the same decree provides a special social security contribution exemption for employers who hire:

To benefit from the exemption, it is not sufficient to have submitted an application for the Allowance; the worker must be an actual beneficiary.

Types of Employment and Employer Obligations

INPS Circular 111/2023 clarifies which employers are eligible for the contribution exemption and specifies the types of employment contracts that qualify. These include:

• Fixed-term or seasonal contracts;
• Permanent contracts, both direct hires and conversions from fixed-term contracts;
• Apprenticeship contracts;
• Full-time or part-time contracts (with proportional adjustment of the maximum exemption amount);
• Employment for temporary staffing purposes.

The exemption cannot be applied to executive positions or intermittent contracts.

In addition to the worker requirement, employers must also meet an additional condition: the job offer must be submitted in the Social and Employment Inclusion Information System (SIISL).

Amount and Duration of the Social Security Contribution Exemption

The exemption covers 100% of employer social security contributions, up to a maximum of €8,000 per year, for permanent hires with a duration of 12 months.

For fixed-term hires, the exemption is 50% of contributions, up to €4,000 per year, and is available for a maximum of 12 months.

In the case of conversion to a permanent contract, the exemption can be granted for a total period of 24 months, including the fixed-term period. In this case, the benefit remains at 50% (up to €4,000 per year) during the fixed-term phase and rises to 100% for the 12 months following the conversion.

Contributions for Intermediaries and Third Sector Entities

The legislator also provides financial contributions to certain entities that facilitate the employment of ADI beneficiaries:

Employment agencies

Receive a contribution equal to 30% of the maximum annual incentive of €8,000 for each person hired through their mediation activities, carried out via the digital platform for intake and active job search.

Patronages, bilateral bodies, non-profit associations, and Third Sector entities

• 60% of the maximum annual incentive of 8.000 euro for permanent hires or conversions; 
• 80% of the maximum annual incentive of 4.000 euro for fixed-term hires. 

Conditions and Requirements for the Social Security Contribution Exemption

Beyond the requirements already mentioned, the exemption is subject to specific conditions:

1. Compliance Requirements

Employers must meet the provisions of Article 1, paragraphs 1175 and 1176, of Law 296/2006, in particular:

• Compliance with contribution obligations (DURC);
• Observance of labor protection rules;
• Adherence to collective agreements at national, regional, territorial, or company level, if signed by the most representative trade unions at the national level. 

2. Principles of Legislative Decree 150/2015

According to Article 31, paragraph 1 letters a), b), c) and d) of Legislative Decree 150/2015 the exemption is not granted in cases of:

• Violation of precedence rights;
• Work suspensions due to crisis or company reorganization;
• Breach of a pre-existing obligation;
• Hiring workers dismissed within the previous six months within the same corporate group.

3. Temporary Staffing Contracts

As provided in Article 31, paragraph 1, letter e, of Legislative Decree 150/2015, economic benefits related to hiring or conversion of temporary contracts are granted to the user company.

4. Hiring Notifications

Employers must respect deadlines for sending notifications via UniLav. Late submissions will result in the exemption being not applicable for the period between the hire date and the late notification date (Article 31, letter 3, Legislative Decree 150/2015).

Repayment of the Contribution Exemption

Employers must repay the incentive, with civil penalties, if the employment relationship ends within 24 months of hiring in cases of:

• Dismissal for just cause or for justified reason deemed illegitimate;
• Termination of an apprenticeship contract at the end of the training period (employer);
• Termination of the contract during the probation period (employer);
• Worker resignation for just cause.

The repayment obligation does not apply to the portion of the contribution granted for mediation activities carried out by employment agencies, as described above.

Contribution Exemption and State Aid

Regarding compatibility with State aid regulation the exemption is subject to the limits set by EU Regulation 2023/2831 on “de minimis” aid. From January 1, 2024, the maximum aid granted to a single enterprise over three years is set at €300,000 for main sectors (different amounts apply to agriculture and fisheries).

For temporary staffing hires, the responsibility for respecting this maximum falls on the user company, as already established in Article 31, paragraph 1, letter e), of Legislative Decree 150/2015. 

Coordination with Other Exemptions

INPS Circular 111/2023 specifies that this exemption cannot be combined with other exemptions or reductions in employer contribution rates. It can, however, be combined—up to 100% of eligible labor costs—with economic incentives for hiring disabled individuals under Article 13 of Law 68/1999. 

Moreover, the exemption is considered compatible with reductions in employee social security contributions.

How to Apply for the Contribution Exemption

To apply, employers must submit a request for the incentive through the INPS Incentives Portal. Upon receipt, INPS calculates the eligible benefit based on the information provided and declared contributions from both employer and employee. The institute then verifies compliance with conditions and confirms approval. The amount recognized by INPS represents the maximum benefit available.