Italy’s budget plan sets aside €3.1 billion over ten years to gradually reduce waiting times for the end-of-service payment, known as TFR, for public employees who retire after reaching the age or service limit. The changes would move the system closer to immediate payment, but would not cover all public-sector workers leaving their jobs.
The reform would be phased in. Starting in 2028, the wait between retirement and the first payment would be shortened by three months each year for three years. The first instalment is already due after nine months, following a reduction from 12 months under last year’s budget law.
From 2031, the plan would raise the threshold for receiving the payment in instalments. That threshold currently stands at €50,000. The amount payable in the initial instalment would increase by €10,000 a year until the threshold is eliminated on January 1, 2035. At that point, workers retiring after reaching the age or service limit would receive their payment immediately, as private-sector employees do.
The measure does not change the rules for public employees who leave because of seniority or to take a job in the private sector. They would still wait 24 months for the first instalment, followed by annual payments capped at €50,000 each. For benefits exceeding €100,000, the full payment can take five years, and administrative delays may extend that period.
The Constitutional Court is due to hold its final hearing on the issue on January 14, 2027. The court has previously urged reform, and its final decision is expected to consider whether the budget measures are sufficient. The case involves both constitutional protections for deferred pay and the need to safeguard public finances.
Sources: Il Sole 24 Ore Italia.