FAMILY ALLOWANCES. – In Italy this term denotes the allowances paid to employees of private enterprises, in addition to the remuneration deriving from the contractual regulation of labour relations, in relation to the burdens arising from the worker’s family circumstances. Since direct payment by individual firms is not feasible—because in that case workers with fewer family responsibilities would be preferred as less costly—the allowances are disbursed through a mutualistic mechanism for equalising the burden, in the sense that firms contribute, by means of levies calculated with reference to the entire workforce, to the formation of the necessary funds from which the allowances due to individual employees are drawn. The need for such a compensatory system does not arise in the case of firms or public bodies that do not operate in a context of economic competition; consequently, the State administration and public bodies in general pay directly to their employees special family allowances that have the same nature and purpose as family allowances.
Originally, family allowances were introduced as a particular form of assistance to offset the shortfall in wages for workers with family responsibilities during periods of exceptional increases in the cost of living, as in France in 1922, or, as in Italy in 1934, on the occasion of wage reductions resulting from the corresponding reduction in weekly working hours. However, the institution of family allowances soon extended and developed beyond these contingent origins into an unconditional system, ultimately achieving, albeit partially and imperfectly, the principle of the family wage.
Since family allowances do not constitute remuneration for work performed, they are not considered an element of wages for the various legal purposes. The question of whether they may be regarded as part of social security is debated; however, there is a recent tendency to affirm this view, considering the evolving concept of social security, which, departing from its original framework rooted in social insurance, is developing into a system of social protection and security based on the principle of income redistribution through solidarity.
Because they are paid with reference to a condition of need, objectively assessed in relation to family responsibilities, the amount of family allowances is independent of the individual worker’s wage and is uniform for all workers in the same category who are entitled to them. At present in Italy, the amount varies according to whether workers belong to the major sectors of industry, commerce, banking, insurance, or agriculture.
The beneficiaries of family allowances are those family members who are dependent on the worker. In contrast to the view supported by some and implemented, among other places, in French and English legislation—according to which family allowances should be paid, with certain exceptions, only when the family exceeds a given average size (generally one child)—and in contrast to the related view that the number of children should be taken into account to grant preferential treatment to larger families, a system that was in force in Italian legislation until 1934, the current principle in Italy is that family allowances are due for all dependent children without progressive differentiation based on their number; in addition to children, allowances are also paid for dependent wives and for dependent parents who have reached certain age limits or are disabled.
Payment of family allowances is normally made by the employer, which then recovers the amount paid from the Institute administering the allowances; in agriculture, payment is made directly by the Institute to entitled workers, identified through special lists.
Closely connected with the purposes of family allowances is the insurance for marriage and childbirth, introduced in Italy in 1939, which aims to pay special allowances on the occasion of workers’ marriages and the birth of their children.