Immigration Law

Pensions and Social security in Italy: a guide

retire in italy pensions

Retiring in Italy: A Comprehensive Guide for Foreigners

This guide will provide you with all the essential information about retiring in Italy, including the different types of pensions available, the eligibility requirements, and the process of applying for a pension.

Types of Pensions in Italy

There are different types of public pensions in Italy:

  • old-age pension
  • seniority pension
  • disability benefit
  • survivor’s pension
  • war pension

Eligibility Requirements for a Pension in Italy

To be eligible for a social pension in Italy, you must meet the following requirements:

  • You must be at least 67 years old.
  • You must have paid into the Italian social security system for at least 20 years.
  • You must have resided in Italy for at least 10 years.

If you do not meet all of these requirements, you may still be eligible for a partial pension.

Applying for a Pension in Italy

To apply for a pension in Italy, you must submit an application to the Italian National Social Security Institute (INPS). The application can be submitted online, by mail, or in person at an INPS office.

The following documents must be submitted with your application:

  • A copy of your passport or identity card
  • A copy of your birth certificate
  • A copy of your marriage certificate (if applicable)
  • A copy of your social security card/ tax code in Italy
  • A statement of your earnings from the past 20 years
  • A statement of your contributions to the Italian social security system

Age of Retirement in Italy

The age of retirement in Italy is gradually increasing. For those born after 1959, the retirement age will be 67 years old. There are some exceptions to this rule, for example, people who have worked in physically demanding jobs may be eligible to retire earlier.

Retiring in Italy as a Dual Citizen

If you are a dual citizen of Italy and another country, you may be eligible to receive a pension from both countries. However, the rules for receiving a pension from two countries can be complex. It is important to contact the social security agencies in both countries to find out what your options are.

Regarding the tax aspects of pensions, Italy has signed agreements to avoid double taxation, which allow for the exemption of pension taxes in the country of disbursement and taxation solely in the country of residence.

Italy has established agreements with Albania, Algeria, Saudi Arabia, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Belgium, Belarus, Brazil, Bulgaria, Canada, China, Cyprus, South Korea, Ivory Coast, Croatia, Denmark, Ecuador, Egypt, United Arab Emirates, Estonia, Russian Federation, Philippines, Finland, France, Georgia, Germany, Ghana, Japan, Jordan, Greece, Hungary, India, Indonesia, Ireland, Iceland, Israel, Former Yugoslavia (the Convention currently applies to Bosnia and Herzegovina, Serbia, and Montenegro), Kazakhstan, Kuwait, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Morocco, Mauritius, Mexico, Moldova, Mozambique, Norway, New Zealand, Oman, the Netherlands, Pakistan, Poland, Portugal, Qatar, United Kingdom, Czech Republic, Slovak Republic, Romania, Senegal, Singapore, Syria, Slovenia, Spain, Sri Lanka, United States of America, South Africa, Sweden, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, Uganda, Former Soviet Union (the successor states apply the Convention unless they conclude and bring into force their own Convention), Uzbekistan, Venezuela, Vietnam, Zambia.

How does the pension system work for foreigners residing in italy?

The subject is very complex, diversified, and depends on the agreements that italy has made with various countries.

There are two main categories:

  1. eu workers (who have the same rights and duties as Italian workers)
  2. non-eu foreign citizens who come to Italy to work and then stay or return to their home country.

EU citizens

Eu citizens enjoy the same conditions as Italian workers, both in terms of pay and working conditions, including pension. For these workers, all periods of insurance or contributions accrued in different countries are added together and they receive a final “pro-rata” treatment based on the work performed in the various countries and the relative contributions.

EU citizens who have lived and worked in Italy for at least 5 years are eligible for an Italian pension. They must have made contributions to the INPS or have been self-employed in Italy for at least 5 years.

The pension is paid in the country of “last residence” or in the country where the application was submitted.

Non-EU citizens with agreements

A non-eu citizen who is regularly employed in Italy is entitled to pay all social security contributions.

For some countries, for example, there are specific agreements that create a legal situation that is very similar to that of eu countries. In these cases, the worker, whether they remain in Italy or return to their country of origin, will be entitled to their full pension.

Non-EU citizens who remain in Italy

Non-eu citizens, even if they have not become Italian citizens, enjoy full equality of treatment with Italian workers: a non-eu citizen who comes from a country without an agreement, after having paid contributions and reached the correct retirement age, will normally receive the benefits due to them if they remain in Italy.

Here we go with a table briefly summarizing it all:

EligibilityForeigners must have lived and worked in Italy for a certain period. EU citizens need 5 years, while non-EU citizens need 10 years. Bilateral agreements apply.
Types of PensionsOld-age pension, disability pension, widow’s pension, orphan’s pension
Application ProcessSubmit application to INPS with required documents
Documents RequiredValid residence permit, proof of employment/self-employment, proof of INPS contributions, birth certificate, marriage certificate (if applicable), death certificate (if applicable), and other documents required by the specific pension program
BenefitsVary depending on the type of pension and individual’s contributions
TaxationItalian pensions are subject to taxation. The tax rate varies depending on the type of pension and the individual’s income

Retirement age differences across the EU

In the European Union, the age at which you can retire varies from one country to another.

You’re eligible to receive a pension in the country where you currently live or last worked, but only upon reaching that country’s legally stipulated retirement age. If you’ve earned pension rights in other countries, you’ll only receive those portions when you reach the legal retirement ages set by those countries.

Therefore, it’s wise to ask for the help of an expert to check in advance with each country where you’ve worked to understand how changing your retirement start date might affect your situation. Receiving one portion of your pension earlier than another could impact the total amount you receive.

For further advice, consult the pension institution in your country of residence and/or the countries where you’ve worked.

In some EU countries, you must have worked for a minimum period to qualify for a pension. In such cases, the pension institution must also consider periods worked in other eu countries as if you had been employed in the same country the whole time. This helps determine your eligibility for a pension (the principle of aggregation of insurance periods).

‘Golden Pension’ in Italy for Foreigners

The Italian government offers a special pension program for foreign retirees who move to Italy. This program, known as “Permesso di soggiorno per Residenza Elettiva“, also called “golden pension”, provides a tax break on pension income for foreign retirees who meet certain requirements. To be eligible for the golden pension, you must:

  • Be a citizen of a country outside the European Union
  • Have an annual pension income of at least €30,000
  • Move your residency to Italy

The elective residence permit is issued under distinct scenarios. The visa for elective residence allows entry into Italy for the purpose of staying for foreigners who intend to settle here and who demonstrate to have sufficient income to live independently without engaging in any work activity.

The applicant must also demonstrate:

  • the availability of a house to be elected as a residence;
  • economic resources (pensions, annuities, real estate properties, stable commercial activities, or other sources different from subordinate employment).

7% Flat Tax for Foreign Pensions in Southern Italy

Recently, a new taxation regime has been introduced. The 7% flat tax rate for retirees who earn income from foreign sources is applicable to retirees of any nationality, including those receiving an INPS (Italian National Social Security Institute). This flat tax for retirees is a favorable tax scheme that allows those already in receipt of foreign-sourced or foreign-produced pension income (including various types of pensions and similar allowances) to opt for a substitute tax of 7% instead of the standard progressive personal income tax rates.

Eligibility for the 7% flat tax is contingent upon relocating one’s fiscal residence to a municipality within the territories of the regions of Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, and Puglia, provided that the municipality has a population not exceeding 20,000 habitants.

Documents required to retire in Italy

If you’re planning to live in Italy for more than half a year, whether as a local or a foreigner with an overseas pension, you’ll need a tax code. This code is your fiscal ID for various essential activities, including registering with local services, banking, and accessing healthcare.

Have a look at our Video about the Fiscal Code for Retiring in Italy

Securing a tax code is hassle-free, especially with expert assistance. ILF – Italy law firms offer comprehensive support to expat retirees, ensuring all residency requirements are met and applications are correctly filed. For those retiring abroad in Italy, Italy law firms can evaluate your individual circumstances and address any queries regarding residency or visa needs.

To begin your journey towards a stress-free retirement in Italy, visit our page for a straightforward tax code registration process. Plus, benefit from a free 30-minute consultation with our legal professionals.