The graduation years redemption of degree courses is an arrangement allowing your period of study to be considered for pension purposes.
A degree is valid for graduation years redemption provided that the concerned individual has completed their degree.
This service is aimed at anyone who has obtained a degree or equivalent qualification.
This right can also be exercised by unemployed individuals who, at the time of application, have never been enrolled in any form of compulsory social security scheme and who have not started work in Italy or abroad.
The following are eligible for graduation redemption contribution:
- university degree courses with a minimum duration of two years and a maximum duration of three years;
- university diplomas with a minimum duration of four years and a maximum duration of six years;
- specialised postgraduate diplomas awarded upon completion of a course with a duration of at least two years;
- PhD courses regulated by specific legal provisions;
- academic qualifications introduced by decree n. 509 of 3rd November 1999, i.e. a degree (L), at the end of a three-year course and a specialised degree (LS), upon completion of a two-year preparatory course for the degree.
With regard to diplomas received from Institutes for Advanced Artistic and Musical Education, new courses starting from the academic year 2005/2006 which result in the following qualifications may be redeemed for pension purposes, in accordance with the current provisions on the subject:
- first level academic diplomas;
- second level academic diplomas;
- specialised diplomas;
- academic diplomas for research training considered equivalent to a university research doctorate by article 3, paragraph 6 of the decree of the President of the Republic n. 212 of 8th July 2005 (message of 14th June 2010 n. 15662).
Periods that are not eligible for graduation redemption contribution are:
- Repeated years;
- Those already covered by compulsory or imputed contributions or by graduation redemption contribution, not only involving the fund to which the application has been submitted, but also other social security schemes referred to in article 2, paragraph 1, of legislative decree n. 184 of 30th April 1997 (Dependent Workers’ Pension Fund and special pension schemes of this Fund for self-employed workers; substitute and exclusive funds of the Compulsory General Insurance scheme for disability, old age and survivors, and pension schemes referred to in article 2, paragraph 26, of law n. 335 of 8th August 1995).
The graduation redemption contribution may cover the whole period or individual periods. Since 12th July 1997, it is possible to redeem two or more degree courses, even for degrees obtained before that date.
It is not possible to request withdrawal or revocation of the graduation redemption contribution of a degree that has been legitimately credited following the payment of the related cost (message of 8th October 2008, n. 22427).
Periods of university study abroad
For periods of university study abroad, law n. 148 of 11th July 2002 (published in the Official Journal of 25th July 2002, n. 173, S.O.) provides for the authorisation and implementation of the Convention on the recognition of Higher Education Qualifications in the European Region, signed in Lisbon on 11th April 1997, and lays down rules for the adaptation of the national system. Decree of the President of the Republic n. 189 of 30th July 2009, in compliance with article 5 of the aforementioned law, governs, among other things, the procedure for the recognition of qualifications and related academic curriculum for social security purposes.
Article 170, paragraph 1 of the Consolidated Act on higher education under royal decree n. 1592 of 31st August 1933 stipulates that academic qualifications obtained abroad have no legal value in Italy, except in the case of special laws or bilateral agreements.
According to point 1) of circular n. 468 of 7th September 1978, university degrees obtained abroad may be redeemed if they have been recognised by Italian universities or, in any circumstance, have legal value in Italy. These regulations are in force for the majority of foreign degrees but are no longer in effect for those degrees to which the decree of the President of the Republic 189/2009 is applicable.
In fact, the evaluations for the recognition of these qualifications and related academic curriculum for social security purposes have been handed over to the Ministry of Education, University and Research (article 1, paragraph 1 and article 3, paragraph 1, letter b) of the decree of the President of the Republic 189/2009).
Therefore, the periods of study in question can be used for graduation redemption contribution pursuant to article 2, legislative decree 184/1997 only when they are subject to specific recognition for social security purposes as referred to in article 3, paragraph 1, letter b) of the decree of the President of the Republic 189/2009. Therefore, for the specific purpose of assessing eligibility of the right to graduation redemption contribution, no other recognition is relevant, such as: any additional recognitions provided, the recognition for academic purposes referred to in article 2, law n. 148 of 11th July 2002, or for purposes related to professional recognition, provided for by Community law, and by articles 49 and 50 of the decree of the President of the Republic n. 394 of 19th August 1999.
The procedure referred to in the decree of the President of the Republic 189/2009 applies only to foreign academic qualifications obtained in countries adhering to the "Lisbon Convention of 11th April 1997” (article 1, paragraph 2). If eligible, the applicable regional INPS office sends the Ministry the explicit request of the interested party to obtain recognition of the qualification "for social security purposes" in accordance with article 3, paragraph 1, letter b) of the decree of the President of the Republic 189/2009. The claim is accompanied by the documents referred to in article 3, paragraph 2 of the decree of the President of the Republic 189/2009.
Graduation redemption contribution of a degree requested by unemployed individuals
The graduation redemption contribution of a degree can be requested by unemployed individuals who are not enrolled in any compulsory form of social security and who have not started working in Italy or abroad. The right (circular n. 29 of 11th March 2008) can be exercised by those who, at the time of application, have never been enrolled in any compulsory form of social security, including the Separate Pension Scheme (Gestione Separata) referred to in article 2, paragraph 26, of law n. 335 of 8th August 1995, and who have not started working in Italy or abroad (message n. 5529 of 9th March 2009).
For cases in which a degree's years redemption contribution is claimed by unemployed individuals, the cost is formed of the payment of a contribution for each year to be redeemed, equal to the minimum annual taxable amount for artisans and traders multiplied by the pension benefit calculation rate of the Compulsory General Insurance (AGO) scheme in force during the year in which the application is submitted.
The contribution is paid to the INPS in the appropriate separate accounting record of the Dependent Workers’ Pension Fund (FPLD) and is reassessed in compliance with the contribution system rules in force on the claim date.
The amount accrued is transferred, at the request of the interested party, to the social security pension scheme with which the interested party is or has been registered.
Calculation of the cost
The redemption payments costs for periods of university study are determined by the rules governing pension payments, using the remuneration system or the contribution system, whilst taking into account the time-frame of the periods subject to redemption payment.
- Redemption periods in the “remuneration system”. If the redemption periods are part of the remuneration system, the sum to be paid is determined in accordance with the criteria laid down in article 13 of law n. 1338 of 12th August 1962 (mathematical reserves); the amount varies depending on factors such as age, the redemption period, gender and salaries received in previous years. The cost of the transaction including the calculation of the mathematical reserve is calculated using the actuarial reserve corresponding to the portion of the pension which, as a result of redemption payment, is potentially or effectively acquired by the individual concerned (pension benefit).
- Redemption periods in the “contribution system”. For redemption periods for which the related pension share would be calculated using the contribution system, the corresponding sum is instead determined by applying the contribution rate in force at the date on which the redemption payment claim was submitted. This sum equals the amount provided for by the payment of the compulsory contribution due to the pension scheme where the redemption payment itself is applicable. The salary to which the above contribution rate is to be applied is that which was subject to contribution payments in the most recent 12 months with respect to the claim date and is related to the period subject to redemption payment.
The remuneration used as a basis for calculating the cost and related to the redemption payment period is credited to the individual's pension position, placing it at the same time as the redemption payment periods. In order to calculate the pension, the re-evaluation of the individual contribution amounts relating to the redemption payment periods takes effect from the date on which the application was submitted.
Assuming that a person wants to redeem four years of university study and has submitted a redemption contribution application to the Dependent Workers’ Pension Fund on 31st January 2019: if he/she received a gross salary of €32,170 during the preceding 12 months, the amount to be paid to retroactively pay four years is €42,464.40 (32,170 x 33% = 10,616.10 x 4 years = 42,464.40).
Article 20, paragraph 6 of decree law 1999, n. introduced, for claims submitted from 29th January 2019, a different system for calculating the cost of redemption payments for courses of study as per article 2 of legislative decree 184/1997, in cases where the redemption payment claim is submitted before the applicant reaches 45 years of age and concerns periods that are part of the contribution calculation system.
The conversion law of 28th March 2019 n. 26 removed the age threshold of 45 for admission to the new calculation methods. As a result of this amendment, since 30th March 2019 - the date on which law 26/2019 came into effect - claimant can exercise their right to redemption payment using the new calculation criteria, regardless of their age on the redemption payment claim date, provided that the additional necessary requirements are met. Significantly, the new procedures for calculating the redemption payment costs of university courses only apply to periods of study which are part of the future pension's contribution system.
In this case, the cost is determined based on the minimal cost for artisans and traders in force in the year in which the claim is submitted and based on the rate of calculation of pension benefits in force in the same period within the Dependent Workers' Pension Fund (FPLD). The reference salary amount is related to the period subject to redemption payment and is attributed temporally and proportionally to said period. The contribution is re-evaluated in accordance with the rules of the contribution system related to the claim date.
For the year 2019, the minimum annual income to be taken into account for calculating the IVS contribution (disability, old age and survivors’ contribution) payable by artisans and traders is € 15,878.00. The rate of 33% is applied to this amount. Therefore, for applications submitted during 2019, the cost for redemption payment of one year of a course is €5,239.74.
- Redemption contribution requested by "unemployed individuals". The cost for periods to be redeemed consists of the payment of a contribution amount for each year to be redeemed. Said contribution amount is equal to the minimum annual taxable amount for artisans and traders multiplied by the pension benefit calculation rate of the Compulsory General Insurance (AGO) scheme (in force during the year in which the claim is submitted).
The requirements for the redemption contribution of university degrees are as follows:
- the claimant must have obtained a university degree or equivalent;
- the periods for which redemption contribution is claimed must not be covered by compulsory or imputed contributions or by redemption contributions not only to the fund to which the claim is submitted but also in other social security schemes referred to in article 2, paragraph 1 of legislative decree 184/1997;
- the claimant must contribute (at least one compulsory contribution) to the pension system where the redemption contribution is claimed, with the exception of the provisions of law n. 247 of 24th December 2007 for claims submitted as of 1st January 2008.
HOW CAN I CLAIM?
The graduate citizen must submit the redemption contribution application to the INPS on-line using the dedicated service.
For further information please refer to the circular of 27th May 2011, n. 77.
The cost is paid using the applicable payment by notice (MAV) slips sent by the INPS along with the approval statement.
The payment slips can be paid at any bank branch with no additional cost or at all post offices, with the payment of the applicable postal commission.
The payment by notice (MAV) slips can be printed on-line using the dedicated service or can be requested from the Contact Centre by telephoning +39 803 164, free of charge from an Italian landline, or +39 06 164164 from a mobile phone. In this instance, the operators will send a copy of the payment slip to the requested address or via e-mail.
By providing your case number and tax code you can pay in the following ways:
- via shops that are part of the "Reti amiche" (friend networks) circuit, a network of newsagents authorised to provide certain cash financial services:
- newsagents and payment points part of the Lottomatica and SisalPay network;
- Unicredit SpA bank branches (payment in cash available to all users, or debits from current accounts available to account holders, or use of the Unicredit SpA website for on-line users);
- on-line on the INPS website using following pages: Services > All Services > Payment Portal > Redemption Contribution, Reconciliation and Returns Services > Log in to service, using the pagoPA system to proceed to "On-line payment" by credit card, debit card, prepaid card or debit account. Alternatively pay using the “pagoPA Payment Notice” by printing the payment notice containing the IUV (Unique Identification of Payment) code and visiting one of the PSP (Payment Service Providers), bank branches, payment institutions or retailers who are part of the pagoPA network.
It is also possible to make direct debit payments in instalments to the account. Simply visit the bank or post office where your account is registered and fill in an SDD form. The form must contain the predefined fixed amount option, which involves the waiver of the right to a debit reimbursement within eight weeks (legislative decree n. 11 of 27th January 2010).
Once the debit authorisation has been communicated, the INPS will send a letter of confirmation indicating the start month of the service and the amounts relating to due dates in the year. Whilst waiting for the confirmation letter from the INPS, payments must continue to be made using the MAV payment slips or via the other payment methods indicated, meeting the monthly due dates.
Starting from the activation date of the service you must no longer use the payment slips with a payment deadline after the activation date itself.
The automatic debit can be withdrawn by the taxpayer at any time provided that advance notice is given to the bank or post office. Any remaining instalments can be paid using the other payment methods.
At the beginning of the calendar year following the one in which payments were made, the tax certificate can be viewed in the Payment Portal by taking the following pathway: Services > All Services > Payment Portal > Redemption Contributions, Reconciliation and Returns Services > Log in to service > Login > Previous Payments section.
For applications submitted from 1st January 2008, the redemption contribution fees for a degree course can be paid to the relevant social security systems in a single lump sum or in 120 interest-free monthly instalments. The interested party may exercise their right to pay off the debt in a smaller number of instalments, which are nevertheless interest free.The pension holder will not be able to request payment in instalments and entering into retirement will result in the benefit of any instalment payments in progress being withdrawn and the obligation to pay the remaining capital in a lump sum.
Failure to pay the amount in a lump sum or to pay the first instalment is considered as withdrawal of the application and is archived by the INPS without further obligations.
Withdrawal does not preclude the possibility of submitting a new redemption contribution claim for the same qualification and period. In this instance, the redemption contribution cost will be recalculated according to the date of the new application.
For instalments after the first instalment, payment made after the due date with a delay of no more than 30 days is permitted no more than five times. Further payments made after the assigned due dates may, at the express request of the interested party, be considered as a new application and will result in the recalculation of the amount payable.
All payments made for partial amounts or for a smaller number of instalments within the assigned time frames will be validated by determining the credit of the insurance period corresponding to the amount paid.
Any changes in address or personal information must be promptly communicated to the Institute.