Limits on the accumulation loan of pensions and income from work
The law lays down limits on the accumulation of pensions with work income for holders of disability checks or pensions and for retired workers who transform the employment relationship from full-time to part-time.
Cumulation of pension and work income
The law establishes limits to the accumulation of the pension with work income for:
- the holders of disability checks;
- invalidity pension holders;
- retired workers who transform their employment relationship from full-time to part-time.
Furthermore, it is recalled that the applicant for the old-age pension, the old-age pension or the early pension, in order to be able to obtain the right to a pension, must cease subordinate employment. It is not necessary, however, to cease self-employment.
Deductions the employer withholds the salary
If the pensioner is employed, the employer withholds the salary and must pay the amount retained to the social security institution that pays the pension. In the event of late payment of the benefit, the retention is made by the social security institution on the pension arrears.
If the pensioner is in possession of self-employed income, the withholding is effected on the pension by the social security institution. The deduction can be daily and to be made on the salary for employee income, or monthly and to be made on the pension based on income from self-employment.
Income from work related to activities carried out without a subordination obligation must be considered as income from self-employment, regardless of the methods of declaration for tax purposes. If the self-employed activity was carried out only for a period during the calendar year, the deduction must be applied to the months for which the income was earned.
The retiree who carries out dependent employment abroad is required to communicate to Social Institute the starting date of the activity, the number of working days and the monthly salary amount. The deductions are made directly by the Social Institute on the pension.
The retiree who carries out self-employed work abroad must report the income by the due date.
For disability check holders who continue to work, the law provides for a double check cut. The pension is reduced by 25% if the income exceeds four times the minimum annual treatment and by 50% if it exceeds five times.
If the reduced allowance still remains above the minimum treatment, it may undergo a second cut. With less than 40 years of contributions, the second deduction is triggered, which varies according to the origin of the income: it will be 50% of the quota exceeding the minimum treatment, in case of dependent work, and equal to 30% of the excess quota and never higher than 30% of the income received, in the case of self-employment.
With at least 40 years of contributions paid, however, no deduction is foreseen and the check is fully cumulative with the income from employee or self-employment. If the check is converted into an old-age pension, the pension can be combined with income from work.
If the pensioner is under the age of retirement, the disability pension is suspended, if the income deriving from dependent, self-employed, professional or business work is greater than 3 times the amount of the minimum treatment employee pension fund, calculated 13 times the monthly amount in force on January 1 of each year.
If the disability pension is higher than the minimum treatment, he may be subject to a deduction. With less than 40 years of contributions, the deduction varies according to the origin of the income: it will be equal to 50% of the quota exceeding the minimum treatment, in case of dependent work, and equal to 30% of the excess quota and never higher than 30% of the income received, in the case of self-employment.
With at least 40 years of contributions paid, however, no deduction is foreseen and the pension can be fully combined with the income from employee or self-employment. If the disability pension is converted into an old-age pension, the pension can be combined with work income.