Invalidi civili

Are taxes paid on the ordinary disability allowance?

Italian legislation provides many benefits for people with civil disability, reduced working capacity or holders of law 104.
Many of these concern work and assistance to the disabled, some concern the rights of the disabled person for greater social inclusion.
Other benefits are economic, such as the various social security and welfare benefits that the INPS provides based on the percentage of disability.
There is no taxation on many of these benefits, such as the civil disability pension, the social allowance and the carer's allowance.
These measures are tax-free because they do not contribute to the formation of the overall income for Irpef purposes and for this very reason they are not taxed.
These are welfare benefits which, with the exception of the accompanying allowance, are provided not only on the basis of health requirements but also income requirements.
read also Do you pay taxes on your disability pension? Why is the ordinary disability allowance different? Where a welfare measure is linked to income requirements, it ceases if the beneficiary exceeds these limits.
Usually, therefore, welfare benefits are not compatible with the work activity that would lead to exceeding these limits.
The ordinary disability allowance, however, is compatible with work activity, even if exceeding certain income limits the amount is reduced.
But what does the difference in the ordinary disability allowance consist of? This is not a welfare treatment but a social security one because it is linked to the contributions paid not only for the determination of the entitlement (at least 3 years of contributions in the five-year period preceding the application), but also of the amount.
Precisely because it is a social security treatment, the ordinary disability allowance is subject to ordinary taxation, just like income from work or pension.
The ordinary allowance, in fact, is equivalent to a pension, unlike the other benefits mentioned for disabled people.
It does not allow access, for example, to an early pension but transforms into an old-age pension upon reaching the age required for access (which in 2023 is 67 years).
read also Ordinary disability allowance, the updated guide for 2023 on requirements, amounts and cuts The ordinary allowance as a pension Just like a pension, the amount of the ordinary disability allowance is not the same for everyone, but varies based on how many and what contributions have been paid.
Like a pension, the amount of this benefit is calculated with the mixed or contributory system (based on the worker's contributory seniority) on the basis of the contributions accrued by the worker.
Furthermore, as mentioned, the ordinary allowance is partially compatible with work activity.
The disabled person who receives the Aoi and continues to work, however, will be subject to a double Cu: one from the employer and one from the INPS.
Irpef will be paid on both by adding the owner's total income.
When are taxes not paid on the ordinary disability allowance? If the annual amount of the allowance does not exceed the no-tax area for pensioners (8,500 euros per year) and the disabled person has no other income, he will not pay Irpef on the sum he receives as an ordinary allowance (precisely because the his total income falls within the no tax area).

Author: Hermes A.I.

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