Here is the impact that fringe benefits will have on Italian consumption this year

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A nudge equal to eight tenths of a point. This is the impact that fringe benefits will have on the consumption of Italians in 2024 due to the close correlation that this welfare instrument has which “puts money in the pockets” of workers in the form of shopping vouchers that can be used for shopping but also to buy books, courses and fill up the car. This is what a survey by TEHA (The European House-Ambrosetti) for Edenred Italia reveals. For this year the Budget Law has established the increase in the tax exemption threshold for employees without dependent children from 258.23 to 1,000 euros and the corresponding reduction in the threshold for employees with dependent children from 3,000 to 2,000 euros. According to TEHA, this new approach could encourage greater adoption of fringe benefits by companies and, consequently, have a positive impact on household consumption, which should record a growth of 0.8% over the course of the year compared to 2023. last year, in fact, only 28% of the companies involved in the survey offered their workers fringe benefits worth up to the maximum exemption threshold of 3,000 euros. Furthermore, 40% declare that they have not used it, motivating the failure to adopt the instrument with the fear of creating disparity and discontent, caused by the excessive difference in treatment between workers with and without children. On the other hand, the survey continues, for 96% of companies, fringe benefits are considered an accelerator of well-being and inclusion for employees who, for 4 out of 5 interviewees, must be able to take advantage of the same exemption thresholds for everyone, a condition the latter which would facilitate greater use.

Fringe benefits have proven to be a fundamental tool for economic well-being in a phase marked by strong inflationary pressure, which has eroded the disposable income of less well-off families by over a third in 2022 and by a further 4% in 2023. In this context, the fringe benefits have made it possible to lighten family budgets in the expenditure items subject to the highest inflation rates: in 2023, over 76% of the shopping vouchers reimbursed by Edenred were used for the purchase of food products (57%) and fuels (19%), whose prices have reported higher than average inflation rates. However, the use of fringe benefits, like all corporate welfare benefits, still remains an underused tool and therefore with a relative ability to impact family incomes: while public welfare, for which in 2021 spending was equal to 623 billion, or 34.9% of GDP (6th highest value among EU countries), supports 37.6% of family income, private services contribute just 2.7%.

The use of fringe benefits gained momentum in 2020, during the pandemic, driven by measures that progressively expanded the tax exemption threshold. In the second half of 2023, in particular, the introduction with the Labor Decree of the differentiated tax relief threshold, established at 258.23 euros for the majority of workers and raised to 3,000 euros for employees with fiscally dependent children, made it possible to increase household consumption by 3.4% compared to 2019, when the threshold was set at 258.23 euros without distinction for all employees. The comparison is positive (+1.5%) also between the second half of 2023 and 2022, when the threshold was first raised to 600 euros for all (Aid-bis Decree, August 2022) and then to 3,000 euros (Aid-quater Decree) from November to December 2022.