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Redemption of contribution periods for members of private pension schemes
Redemption payments are used to cover, with a charge borne by the claimant, some periods expressly envisaged by the law and not covered by contribution. They are credited once the claim by the worker, pensioner or their survivors is accepted.
Unlike imputed contributions, redemption contributions are always on a payment basis and conclude with the payment of an amount.
The legislation states that the following may claim the redemption contribution:
- workers enrolled on the Compulsory General Insurance (AGO) scheme;
- members of one of the special pension schemes for self-employed workers;
- members of the Separate Pension Fund (Gestione Separata) for para-subordinate workers;
- members of special, substitute or exclusive pension funds managed by the INPS.
The main types of redemption contributions are:
- redemption contribution for courses of study pursuant to article 2 of legislative decree n. 184 of 30th April 1997;
- redemption contribution of the creation of a reversible life annuity of omitted or statute-barred contributions (article 13 of law n. 1338 of 12th August 1962);
- redemption contribution of periods of work carried out with ongoing and coordinated employment relationships prior to 1st April 1996 (article 51, law n. 488 of 23rd December 1999);
- redemption contribution of periods of interrupted or suspended employment relationships (article 5 of legislative decree n. 564 of 16th September 1996);
- redemption contribution of periods between one employment relationship and another in the case of discontinuous, seasonal or temporary work (article 7 of legislative decree n. 564/1996);
- redemption contribution of periods of inactivity related to part-time employment relationships (article 8 of legislative decree n. 564/1996);
- redemption contribution of periods of employment in community services for the purpose of calculating pension amounts (article 8, paragraph 19 of legislative decree n. 468 of 1st December 1997);
- redemption contribution of years of work experience carried out by financial advisers (article 1, paragraph 198 of law n. 662 of 23rd December 1996);
- redemption contribution of community service undertaken on a voluntary basis after 1st January 2009 (article 4, paragraph 2 of decree-law n. 185 of 29th November 2008, as converted into law n. 2 of 28th January 2009; legislative decree 40/2017);
- redemption contribution of periods of leave due to serious family reasons (article 1, paragraph 789, law n. 296 of 27th December 2006);
- redemption contribution of periods of employment completed abroad (article 51, paragraph 2, law n. 153 of 30th April 1969, as amended by article 2-octies of decree-law of 2nd March 1974, n. 30, converted, with amendments, by the law of 16th April 1974, n. 114, and article 3, paragraph 1 of legislative decree n. 184 of 30th April 1997);
- redemption contribution of periods of optional leave for maternity leave extraneous to the employment relationship (article 35, paragraph 2, 26th March 2001, n. 151);
- redemption contribution of a period of training leave (article 5, paragraph 5 of law n. 53 of 8th March 2000);
- redemption contribution payment of periods not covered by contributions (article 20, paragraphs 1-5 of decree law n. 4 of 28th January 2019, converted into law n. 26 of 28th March 2019;
- additional redemption contribution periods provided for by specific legal provisions.
The claim should be made at the claimant’s applicable regional INPS office with the required documentation attached. The amount to be paid (redemption contribution cost) is advised via a registered letter sent by the INPS along with the statement approving the redemption contribution claim, which also indicates the terms and conditions for payment.
The approval statement, sent by registered mail, contains the first MAV payment slips and indicates the payment terms. 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 MAV payment slips can be printed directly from the INPS website using the dedicated service. For this you must have a tax code and PIN issued by the Institute (for certain individual cases only the tax code is required).
Alternatively, you can make a claim through the Contact Centre by calling +39 803 164 (free of charge from Italian landlines) or +39 06 164164 from mobile networks. A copy of the payment slip will then be sent to the claimant’s address or email address.
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 or use of the Unicredit SpA website, available to account holders);
- on-line, via the Payment Portal on the INPS website, by taking the following pathway: Services > All Services > Payment Portal > Redemption Contribution, Reconciliation and Returns Services > Log in to service. The payment can be made using the pagoPA system via an “On-line payment” with either a credit, debit or prepaid card, or debit account, or by using a “pagoPA payment notice". Said payment notice containing the IUV (Single Identification of Payment) code must be printed out and taken to 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 Contribution, Reconciliation and Returns Services > Log in to service > Log in > Previous Payments section.
Payment can be made in a lump sum within 60 days of receipt of the approval, or in instalments. The latter type of payment is granted if the claimant is not retired and if the redemption contributions are not to be used immediately for pension entitlement.
If paying in instalments:
- for the majority of redemption contributions, the number of monthly instalments cannot exceed 60 (with the exception of the redemption contribution of periods of study if the related application was submitted after 31st December 2007 and the redemption contribution of periods corresponding to civil service on a voluntary basis, for which payment is extended to 120 interest-free instalments);
- the total redemption contribution cost must be increased by the statutory interest calculated at the rate in force, if required by the relevant legislation;
- the cost must be divided into consecutive monthly instalments of no less than €27 each;
- the first instalment must be paid within 60 days from receipt of the approval notification for the redemption contribution claim.
If, during the extension period, the interested party reaches their right to a pension and submits the relevant claim, the payments in instalments must be discontinued and the remaining cost paid in one single instalment.
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.
Late payment of the lump sum or first instalment will, upon claim and if permitted by law, be considered as a new application submitted on the day of late payment. Late payment of subsequent instalments may also be considered, upon claim and if permitted by law, as a new application. If the late payment is made within 30 days of the due date, the late payment will be considered valid (no more than five times) and interest will be charged for the period of delay.
The termination of instalment payments for the redemption contribution cost will result in the crediting of a contribution period for a duration corresponding to the sum of the paid capital.
The explicit withdrawal of the claim by the insured individual either before receipt of the approval notification or implicitly (non-payment of the charge or the first instalment) does not prevent the insured individual from submitting a new claim for redemption contribution for the same reason and for the same periods. In this case, the cost of the charge on the date of the new application will be recalculated.
Following payment of the charge, the contributions are deemed as paid in good time and are placed within the period to which they relate, even if payment is made at a later date. They are therefore useful for:
- proving entitlement to all social security benefits;
- determining the right for voluntary continuation;
- proving entitlement to pension benefits, including the retirement pension, and the sum thereof.
The claim to the INPS can be made on-line using the dedicated service.
Alternatively, the claim can be made by:
- Telephoning the contact centre on +39 803 164 (free from Italian landlines) or +39 06 164 164 from mobile phones;
- Electronic services offered by patronage institutes and intermediaries thereof.
For further information please refer to the INPS circular of 29th December 2016, n. 228.