EurWORK European Observatory of Working Life

Guaranteed minimum income scheme assessed

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Portugal's RMG guaranteed minimum income scheme marked its fourth anniversary in July 2001. The government took the opportunity to announce that RMG recipients are to be offered jobs or training, and that a study will be launched to examine the social and occupational progress of former beneficiaries.

A guaranteed minimum income (rendimento mínimo garantido, RMG) was created in Portugal by Law 19-A/96 of 26 June 1996 (PT9703107F). The RMG constitutes a minimum base-line income to cover essential needs (and is thus separate from the national minimum wage, which covers the minimum rates that employers must pay their employees). The RMG is essentially a contract, providing an income in exchange for a commitment to participate in a social integration programme (programa de inserção social). The RMG consists of a monthly payment that is conceived as the "minimum" to which all citizens having reached the age of majority and being resident in Portugal have a legally-established and recognised right. The amount of the RMG is based on a formula that takes into account the size of the household and the age of the members, but it is well below what is considered to be the poverty line. Following the enactment of Law 19-A/96, the RMG scheme was introduced on a one-year experimental, pilot basis from 1 July 1996 before being recognised as a universal right on 1 July 1997.

July 2001 marked the fourth anniversary of the full introduction of the RMG, and the Minister of Labour and Solidarity took this opportunity to announce a measure whereby, as of September 2001, people receiving the RMG who do not have an occupation or a health reason for not being able to work will be offered a job or training. This measure is aimed at giving RMG beneficiaries and their families the opportunity for progressive social and occupational insertion.

Target population and take-up

Very poor individuals and families satisfying the following requirements are entitled to the RMG:

  • they must be aged 18 or over or, if not, must have minors in their care, or be married or pregnant;
  • they must be legally resident in Portugal;
  • they must undertake to enter and follow an integration programme, unless this is impossible for reasons of age, health or other factors arising from their family situation;
  • they must be prepared to apply for the social security benefits to which they are entitled and exercise their right to collect possible credits or food support; and
  • they must provide proof of severe poverty.

According to a 1998 study of the experimental phase of the RMG (PT9901120F), the recipients at this stage were "people who have inherited the dominant economic and social traits that are typical of poverty and social exclusion from their families. They have not had much schooling, they entered the labour market at an early age and their careers are marked by precarious, intermittent, unqualified jobs and difficulty entering vocational training. "

Four years on, according to official data, almost 7% of the Portuguese population has benefited from the RMG scheme, and most of the 680,000 people that have received the subsidies live in the districts of Oporto, Viseu, the Azores or Lisbon.

In all, 220,000 families have received RMG According to the data for April 2001, GMI was being paid to 132,000 families, representing 390,000 beneficiaries, which indicates a substantial reduction, as in December 2000 the project involved 418,256 people from 142,000 families. According to figures issued by the Secretary of State for Social Security, an average of 2,000 people join the RMG scheme every month, while 3,800 leave. The number of new applications fell from 93,4987 in 1998 to 62,778 in 1999 (and 12,227 in the first quarter of 2000). Of those receiving RMG, the largest single group are in one-person households, followed by those in two-member families. Over 80% beneficiaries receive RMG for 13 months or more, with nearly half of them receiving it for over 24 months.

Offer of employment or training

The Minister of Labour and Solidarity announced in July 2001 that about 80,000 RMG beneficiaries will receive job or training offers between September and December. The Institute of Employment and Vocational Training (Instituto de Emprego e Formação Profissional, IEFP) will call in beneficiaries and make them concrete offers of work or of training enabling them to enter the labour market. The measure is aimed at RMG beneficiaries between the ages of 18 and 55 who are able to work but have no jobs. According to the Minister, this measure will make it possible to monitor whether the beneficiaries are really unemployed or not. He added that the RMG is a measure aimed at mobilising people, thus responding to critics who consider that the RMG is an "invitation to idleness". For this reason, he will continue his commitment to maintaining and developing RMG, which he considers a universal measure promoting inclusion based on a commitment of trust between society and its citizens.

A survey is also to be conducted of about 300 former beneficiaries of social integration programmes to find out what people who had received RMG and were then considered reintegrated into society are currently doing. This survey will study the path followed by these individuals and obtain reliable reports on what has changed in their lives and on whether they were actually reintegrated into society when they stopped receiving the benefit.

Commentary

The RMG, as a social policy measure, serves to fill a gap in the social protection of the disadvantaged. It is, however, important to create instruments or measures to control and evaluate this process. The new measures announced recently should pave the way for the social inclusion of RMG beneficiaries. (Ana Almeida, UAL)

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