The European Commission has sent a recommendation to the Council of the EU on a minimum income, which envisages cash payments to help needy households to make up for a certain level of income shortfalls so that they can pay their bills and live in dignity.

Today, more than 20% of people in the EU are exposed to the risk of poverty and social exclusion. Minimum income systems exist in all member states, but analyses show that they are not always adequate, do not reach everyone who needs them and do not motivate citizens to return to the labour market, Commissioner for Employment and Social Rights Nicolas Schmit said.

The Commission therefore calls on the member states to modernise their minimum income systems as part of their obligation to reduce poverty and social exclusion in Europe, added Schmit.

Cash payments are mostly supplemented by benefits in kind, which enable access to services and targeted incentives for access to the labour market.

The Commission notes that minimum income systems and social safety nets must include sufficient incentives and support for beneficiaries who can work by re-entering the labour market. Therefore, they should be designed to contribute to the full realisation of the potential of the green and digital transition, by encouraging transitions in the labour market and more active participation of people in disadvantaged positions.

Social protection systems help reduce social inequalities. They ensure a dignified life for those who cannot work and encourage those who can to start working again. Today, many are struggling to make ends meet so it is important that member states modernise their social safety nets this autumn by applying an active inclusion approach to help those most in need, said Executive Vice-President and Commissioner for Trade Valdis Dombrovskis.

In its proposal, the Commission, among other things, calls on member states to determine the level of income support by applying a transparent and reliable methodology.

Member states should achieve an adequate level of income support by the end of 2030 at the latest, while simultaneously ensuring the sustainability of public finances.

Each year they will be required to review and if necessary adjust income support levels.