An EU Directive on Adequate Minimum Income. Enabling People to Thrive and not just Survive
Text: Piotr Sadowski, Silvana Roebstorf, Social Platform
All EU Member States provide some form of minimum income scheme. However, most fail to guarantee the individuals concerned a decent standard of living at all stages of life. Social Platform, a network uniting 47 panEuropean civil society organisations advocating for social justice and participatory democracy in Europe, calls for an EU framework directive translating the right to an adequate minimum income into a legally binding commitment for all Member States.
Europe is one of the most prosperous regions in the world. From a global perspective, people living in the European Union enjoy some of the best living and working conditions and the most comprehensive social protection systems. Taking it outside the global context, the situation looks different. In 2018, more than 109 million people in the EU were living at risk of poverty and social exclusion.1 This amounts to 21.7 per cent of its population – approximately one in five people. Certain groups are disproportionately at risk of poverty, such as persons with disabilities, single parent families, women, young adults, people with low educational attainment or long-standing health problems, the unemployed,2 migrants and ethnic minorities, particularly Roma.3
The good news is that the benefit of living in one of the most prosperous regions in the world also means that people can, in theory, be lifted out of poverty. It is indeed possible to guarantee every person in the EU a decent standard of living. How? Alongside other measures, by ensuring each country has an adequate minimum income scheme as the foundation of a well-functioning, comprehensive and universal social protection system. An EU Framework Directive on Adequate Minimum Income is an essential step towards guaranteeing a decent life for all.
There is increasing awareness that economic growth does not benefit everyone in society equally. Furthermore, understanding the need to make the economy work for people instead of the other way around is growing.
In addition, the EU is facing an unprecedented challenge with the recent COVID-19 outbreak, declared a pandemic by the World Health Organisation in March 2020. This crisis is already having a significant socio-economic impact on people, and as with every crisis, those in vulnerable situations are hit the hardest. EU action is therefore more crucial than ever to guarantee a decent life for all and to mitigate the immediate and long-term socio-economic impact resulting from the COVID-19 outbreak.
New impetus was given to the EU’s social agenda in November 2017 when the Council of the EU, the European Parliament and the European Commission jointly proclaimed the European Pillar of Social Rights (Social Pillar), which establishes 20 principles and rights as a compass for a more social Europe. Principle 14 lays the foundation for the right to an adequate minimum income. It is now time to translate this right into a legally binding commitment for all EU Member States.
Why we need minimum income schemes
Minimum income plays a key role in preventing and reducing poverty. It forms the basis on which high-quality social protection systems should be built and is key to enabling people to participate fully in society. For individuals with insufficient means of financial support, minimum income is a last-resort safety net aimed at guaranteeing them a minimum standard of living. It is targeted in particular towards people who are unable to work or access a decent job and are excluded from other types of social benefits or where these benefits have expired (such as time-limited unemployment benefits).
In the past 30 years, the EU institutions have built a policy framework for tackling poverty and social exclusion and emphasised the importance of adequate minimum income support. Key milestones include the 1992 Council Recommendation on Common Criteria Concerning Sufficient Resources and Social Assistance in Social Protection Systems and the 2008 Commission Recommendation on Active Inclusion. The Social Pillar builds on these commitments, establishing the right to adequate minimum income at all stages of life and proper access to enabling goods and services.
„The close involvement of organised civil society organisations is crucial in this process as it allows for a better understanding of people’s real needs.“
While all EU Member States provide for some form of minimum income scheme, the support provided varies considerably. Only in Ireland and the Netherlands are the levels enough to lift people out of poverty. In most countries the situation is different, for example in Bulgaria and Romania where the level of minimum income is below 20 per cent of the national poverty threshold.4 The European Minimum Income Network (EMIN), of which Social Platform is a partner and which is led by a Social Platform member, highlighted the fact that minimum income schemes represent a very small percentage of social spending while having a high return on investment. They act as cost-effective economic stimulus packages as the benefits are generally spent locally on goods and services. They also act as automatic stabilisers, enabling countries to better resist the negative impacts of economic crises and thereby reduce deleterious effects that undermine social cohesion.5
Adequate, accessible and enabling minimum income
EMIN established three essential criteria for a decent minimum income: it must be adequate, accessible and enabling. Only then does it provide the individuals concerned with the security they need to feel empowered and to engage in pathways to employment, while at the same time ensuring the inclusion and participation of those for whom employment is not an option.
At EU level, the notion of adequacy is understood as the right to the resources and social assistance needed to lead a life that is compatible with human dignity. This somewhat vague definition leads to a fragmented approach at national level. The European Commission uses the national at-risk-of-poverty threshold (AROPE), according to which people falling below 60 per cent of the national median income are considered to be at risk of poverty, as a benchmark for adequacy. To avoid trapping people in poverty, only a minimum income that is at least at the level of the national poverty threshold can therefore be deemed adequate. However, this relative benchmark needs to be linked to the actual costs of a basket of goods and services in each country. A common EU-wide framework and methodology for reference budgets would place the AROPE threshold within the reality of poverty in each country.6
For minimum income to be accessible, it must be available to anyone in need for as long as it is needed. While most minimum income schemes are designed universally, they do in practice exclude certain groups of people and/or restrict duration. Those often affected are asylum seekers and undocumented migrants due to resident requirements, homeless people for failing to provide a registered address and young people due to age requirements. In 2019, the European Annual Meeting of People Experiencing Poverty recognised accessibility as a key issue and called on Member States and EU institutions to take action.7 Moreover, it is reported that an average of 40 per cent of people entitled to social benefits do not claim them.8 This is due to various reasons, including the lack of awareness of the types of entitlements, restrictive and complex administrative procedures and the perceived stigmatisation attached to needing social assistance. The high level of non-take-up means that social benefits often fail to reach those most in need, generating increased societal costs as people fall further into hardship and deprivation.
For minimum income to be enabling, it must have people’s empowerment, participation and well-being at its core and facilitate access to quality services and inclusive labour markets. Above all, it is crucial to ensure that the voices of people experiencing poverty and social exclusion are heard and taken into account as part of a regular dialogue with service providers and the state. Additionally, the increasing trend in all Member States to make the receipt of minimum income conditional on obligatory participation in activation programmes (such as imposing community work, enforced volunteering, or accepting any kind of job or training offer – even if of poor quality) in order to avoid cuts to benefits needs to be mitigated. Taking such a punitive stance undermines a rights-based approach, leading to extreme deprivation, further isolation and exclusion among individuals who already find themselves in particularly vulnerable situations.
An EU Framework Directive on Adequate Minimum Income is therefore a much-needed, legally binding tool for establishing common definitions, principles and methods to improve existing fragmented national minimum income schemes, which all too often leave the individuals concerned with means below the national poverty threshold, and provide a level playing field supporting upward convergence to help mitigate social dumping. In addition to the need for minimum income to be adequate, accessible and enabling, a positive hierarchy with minimum wages must be ensured to stimulate active inclusion in the labour market and reverse the destructive trend of rising in-work-poverty.
It is no longer viable to develop national social policy without taking on board the European perspective. Common challenges require common solutions; a realisation that is especially gaining traction in times of crisis, such as the current COVID-19 outbreak. With the Social
Pillar, the EU has the necessary tools at its disposal for making the European Union more social for its people and to substantially improve their living and working conditions. Now the political will for its comprehensive and ambitious implementation is required. At the beginning of 2021, the European Commission will present its Action Plan on the Implementation of the European Pillar of Social Rights and most of 2020 will be used to consult all relevant stakeholders. The close involvement of organised civil society organisations is crucial in this process as it allows for a better understanding of people’s real needs. As the voice of civil society organisations working in the social sector, Social Platform stands ready to contribute to this work to ensure that the upcoming reforms and initiatives reflect the realities, lived experiences and needs of people and contribute towards building a more social Europe that leaves no one behind.
As a foundation for high-quality social protection systems, an adequate minimum income is indispensable. The current levels of minimum income schemes across the EU do not match actual needs and leave the individuals concerned stigmatised, isolated and trapped in a cycle of poverty. Soft law on its own is not enough to enforce people’s right to a minimum income. By adopting an ambitious EU Framework Directive on Adequate Minimum Income, European leaders have the chance to establish minimum standards for well-functioning and comprehensive national social protection systems and allow everyone in the EU to thrive and not just survive.
Additional Info on Social Platform
Social Platform unites networks of civil society organisations advocating for social justice and participatory democracy in Europe. Driven by a membership of 47 pan-European networks, Social Platform campaigns to ensure that EU policies are developed in partnership with the people they affect, respecting fundamental rights, promoting solidarity and improving lives.