Prime Minister Kyriakos Mitsotakis is currently reviewing proposals for increases to the Minimum Guaranteed Income, housing allowance, and child benefit. The necessary adjustments and final decisions regarding these increases, with a fiscal cost exceeding €400 million, are expected to be announced from the podium of the Thessaloniki International Fair.
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€400 million benefit increases coming for vulnerable citizens
It should be noted that initially, the benefit adjustments were to be implemented within July, but according to sources, the Ministry of Finance has not yet given the “green light” and the entire matter has been referred to the prime minister for autumn announcements. According to the same sources, Deputy Prime Minister Kostis Hatzidakis is a strong supporter of “targeted increases” for social groups facing difficulties. However, in the pending bill on real estate compensation from the Ministry of Social Cohesion, Minister Domna Michailidou has added an article limiting the housing allowance while replacing it with a rent allowance that more vulnerable families will receive.
Specifically, the proposal for child benefit presented to the prime minister involves a 20% increase compared to 2024, while merging the second and third categories. This means monthly benefits will increase from €34 to €168, depending on the case. Those in the third income category (€17,501 to €26,250) who currently receive €28 per month for one child will now receive €45. Those with two children currently receiving €56 per month will now receive €90. Those with three children currently receiving €112 per month will now receive €180.
The proposal for Minimum Guaranteed Income
The proposal for Minimum Guaranteed Income, currently frozen, includes the largest increase, rising from €216 and €54 to €250 and €75 per child. Additionally, incentives for job seeking are provided to prevent beneficiaries from falling into “poverty traps” by relying solely on benefits. Going forward, part of income from salaried employment will be excluded from eligibility criteria.
Already, a percentage of income from salaried work is counted toward income limits to provide work incentives (20% for child and housing benefits and 30% for Minimum Guaranteed Income). Notably, Minimum Guaranteed Income beneficiaries decreased this year from 210,000 to 190,000, indicating they found jobs and increased their income.
Rent Allowance
For the rent allowance, the proposal involves increases from €70 to €125 and €75, depending on income bracket, plus a 30% increase per child, but with targeted criteria for real estate assets and deposits, while introducing mobile asset criteria.
The housing allowance is given to approximately 260,000 households paying rent for their primary residence, and beneficiaries must meet income and asset criteria. Currently, those whose total income does not exceed €7,000 for single-person households receive benefits, increased by €3,500 for each additional household member.
For single-parent families, a €7,000 increase is set for the first minor household member. For households with unprotected children, a €7,000 increase applies per unprotected child. Total income cannot exceed €21,000 annually, regardless of household composition. Child benefits, non-contributory disability benefits, and foster care allowances are not counted toward the income limit for rent subsidies. Regarding existing asset criteria, the total taxable value of household real estate cannot exceed €120,000 for single-person households, increased by €15,000 for each additional member up to €180,000.
National Benefits Registry
According to government circles, distortions in welfare policy through haphazardly distributed benefits that don’t “communicate” with each other must end, as shown by the recent DiaNEOsis Organization study. Key to reform is transparency, fairness, and respect for taxpayers’ money. Therefore, a National Benefits Registry is expected, alongside measures for three-child families, such as gradually aligning three-child families with large families.
The National Registry provision, included in the Finance Ministry bill, establishes a unified digital system recording all state benefits and assistance (monetary or in-kind) – from child, heating, rent, disability benefits to tax reliefs, etc. – and all beneficiaries. Meanwhile, consultations continue so three-child families can gain additional provisions, attempting to align with benefits given to large families. Note that in “My Home II,” three-child families are equated with large families, receiving full interest rate subsidies from banks. Similarly, for nursery vouchers, three-child families are considered large families. A forthcoming amendment will address hiring three-child and large family members in the public sector through ASEP.
Published in Parapolitika
