The Wage Compensation Fund in derogation (CIGD) is a wage subsidy measure to support companies that cannot use ordinary tools either because they were originally excluded from this cover or because they have already exhausted the period of regular cover to which they are entitled.
The CIGD may be granted or extended to dependent workers working as blue-collar, white-collar or managerial staff, including apprentices and agency workers, with at least 12 months’ service on the date on which the service period begins, except as provided for in Article 6, paragraph 1 of Inter-ministerial Regulation No. 83473 of 01 August 2014.
With regard to the workers receiving the benefit, including apprentices, please refer to INPS Circular no. 56 of 29 March 2016, paragraph 2(b).
The CIGD benefit may be claimed by legal parties that are legally qualified as businesses (pursuant to Article 2082 of the Italian Civil Code), small businesses as referred to in Article 2083 of the Italian Civil Code (small-scale plot farmers, artisans, small traders) and social co-operatives as referred to in Law no. 381 of 08 November 1991, with reference to workers who have established an employment relationship with the co-operative.
The CIGD is granted by the region or autonomous province with a Resolution, if the support claim comes from production units located in a single region or autonomous province, or is granted by the Ministry of Labour and Social Policies, in agreement with the Ministry of Economy and Finance, with a special Inter-ministerial Regulation, if the claim comes from so-called ‘multi-localised’ companies, that have production units located throughout the national territory.
The regions and autonomous provinces may grant the CIGD based on resources that are made available to each regional authority by decree of the Ministry of Labour and Social Policies, in agreement with the Ministry of Economy and Finance.
INPS Circular no. 107 of 27 May 2015 and INPS circular no. 56 of 29 March 2016 specify the regulatory and management flow aspects of the regional and inter-ministerial CIGD.
The following table shows the maximum allocation limits of the CIGD:
Maximum allowed duration
01 January 2014 - 31 December 2014
11 months within a year
01 January 2015 - 31 December 2015
5 months within a year
01 January 2016 - 31 December 2016
3 months within a year
The maximum duration for granting benefits, in relation to each of the productive units involved, shall be calculated with reference to the calendar year.
The CIGD periods shall not contribute to the fulfilment of the 36-month limit in the five-year period for the CIGS (Extraordinary Wage Compensation Fund).
For 2016, companies covered by the Wage Subsidy Fund and the alternative bilateral Solidarity Funds may choose, alternatively and in compliance with the requirements of Inter-ministerial Regulation no. 83473 of 01 August 2014, to either access the benefits provided for by these funds or to make use of the CIGD. For calculating the respective periods of use, individual institutes must be counted autonomously.
The company may not submit claims for the Wage Subsidy in derogation and claims for benefits guaranteed by the aforementioned Funds for coinciding periods.
The allowance shall be equal to 80% of the salary, including any additional monthly instalments, which the employee would have received for the hours not worked between zero hours and the contractual maximum working time, and therefore for no more than 40 hours per week.
The amount of the benefit may not exceed the maximum monthly limit established each year.
Wage subsidies shall be treated in the same way as salaries received for work carried out by third parties, including for the purposes of the rules on pension cumulation. Therefore, the same pension/remuneration cumulation scheme in force before the claim of the wage subsidies shall also apply to the retired worker who is granted the CIGD.
The CIGD can be cumulated with income deriving from the performance of ancillary work in all production sectors, up to an overall limit of 3,000 euro per calendar year. This is to be revalued annually based on the variation in the ISTAT consumer price index for blue- and white-collar households. INPS subtracts the contribution credits deriving from ancillary work benefits from the imputed contribution relating to payment supplements or income support benefits. In this case, the individual concerned will not be required to submit prior notification as referred to in Article 8, paragraph 3 of Italian Legislative Decree No. 148 of 14 September 2015.
Reimbursement of the severance indemnity accrued during the “uninterrupted” period of suspension from work shall be borne by the employer. In fact, the condition of suspension from work, through the intervention of the CIGD, does not fall within any particular case that considers its compensation to be a benefit funded by non-contributory resources.
Any worker who carries out paid work without having notified the local INPS office in charge shall no longer be eligible.
Notifications made by employers and temporary work agencies shall be considered valid for the purpose of complying with reporting obligations.
With the Decree of the Ministry of Labour and Social Policies and the Minister of Economy and Finance No. 83473 of 01 August 2014, the criteria to be adopted for granting the Wage Compensation Fund in derogation have been outlined.
To benefit from the Wage Subsidy in derogation benefits the company must have pre-emptively used regular flexibility instruments such as residual and accrued holidays, leave, and time in lieu.
The benefit may be granted to workers who are suspended from work or who work short hours due to a reduced or suspended production due to:
- company situations caused by transitional events that cannot be attributed to the entrepreneur or to workers;
- business situations caused by temporary market conditions;
- corporate crises;
- restructuring or reorganisation.
The CIGD may never be granted for the company’s termination of activity or by part thereof.
Companies which make use of the CIGD are obliged to pay the additional contribution to which Article 5 of Italian Legislative Decree No. 148 of 23 September 2015 introduces a progressive measure for the payment of periods of wage subsidies used.
For 2016 the regions and autonomous provinces may grant Wage Subsidy in derogation benefits from the criteria referred to in Articles 2 and 3 of Inter-ministerial Regulation No. 83473 of 2014, for 50% of the resources attributed to them.
When can I claim?
The claim must be submitted within twenty days of the date on which the suspension or reduction of working time began, accompanied by the report of the trade union agreement and the list of workers concerned.
In the event of late submission of the claim, the CIGD shall commence from the beginning of the week preceding the submission date of the claim.
For direct payment to the worker, the company must submit form IG/Str/Aut (code SR41) to INPS online.
For payment of the balance, Italian Legislative Decree no. 148/2015 has laid down the procedures and time limits for the reimbursement of benefits. The adjustment or reimbursement claim for the supplementary benefits paid to the workers must be made within six months of the end of the current pay period or, if later, from the expiry of the validity period of the concession or of the date of the measure granting it (authorisation by INPS). For benefits concluded before the decree’s entry into force, the six months shall run from that date.
How can I claim?
In the case of crises involving production units located in a single region or autonomous province, the CIGD claim must be submitted by the company to INPS online by using the dedicated service (Digiweb platform), or to the region, with derogation form IG/15 (code SR100). If the claim is submitted to the region, it must transmit both the concession determination and the SR100 claim in the Earners’ Information System (SIP).
In the event of crises involving production units located in different regions or autonomous provinces, the company must submit an appropriate claim to the Ministry of Labour and Social Policies. Following the investigation, the Ministry itself will issue a special Inter-ministerial Regulation granting the service, after which the company may submit the claim (code SR100), indicating the regulation number, to INPS online by using the dedicated service (Digiweb platform).