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The explosion in fuel prices has revived an old discussion: ‘With these prices, it is no longer worth going to work.’
You have probably already come across such a statement on social networks. According to this comment, the journey to work is so expensive that it would be better to stay at home.
© Screenshots vu Facebook
REVIS is the social inclusion income that replaced the guaranteed minimum income (GMI) in 2019.
Financially speaking, it would be easier receive REVIS than to go to work. There are also discussions about the support launched by the state: people receiving REVIS are entitled to so much financial support, that this income is not so far from the minimum wage. As a result, a number of people believe that the 40-hour work week is no longer worthwhile for that small financial difference.
Faced with these claims, we wanted to know for sure and did the maths based on a case study. Which is more advantageous? REVIS or SMIC?
The study launched by our colleagues at RTL is based on three different scenarios that consider income and financial support.
Housing benefits have been deliberately left out. The same applies to travel costs, including fuel costs, since these vary greatly depending on the car, traffic and distance. The April 2022 salary band is also affected, but has not been included in this calculation.
In our example, we are talking about Max, who lives in Luxembourg. The 27-year-old has never worked before and lives in a flat owned by his parents for free.
In this case, Max earns EUR 2,256.95 gross per month. In Max’s situation, this gives a net income of EUR 1,997.55. Because of his low income, he is entitled to financial support. In principle, Max can claim the cost-of-living allowance and the solidarity allowance. In addition, Max receives the recently announced energy bonus.
The calculation is as follows:
- Social minimum wage: 23,970.6 euros per year (net)
- Cost-of-living allowance: 1,652 euros per year
- Energy bonus: 200 euros per year
- Solidarity allowance: 345 euros per year
This gives an annual income of 26,167.6 euros net, which corresponds to 2,180.63 euros net per month. The amount of the solidarity allowance varies according to the municipality of residence.
In this case, Max earns EUR 2,708.35 gross per month. This corresponds to a net income of EUR 2,286.58. With the qualified minimum wage, Max already earns too much to claim a cost-of-living allowance, and he is not entitled to the solidarity allowance either. For the new energy bonus, the ceiling has been raised, so Max can get this bonus.
The calculation is as follows:
- Minimum qualified wage: 27,438.96 euros per year (net)
- Energy bonus: 200 euros per year
This gives an annual income of 27,638.96 euros net, which corresponds to 2,303.25 euros net per month.
Since Max lives alone, he is entitled to a REVIS of 1,583.6 euros. Only the contributions for health and care insurance are deducted from the REVIS. This amounts to EUR 58.61. This means that the National Solidarity Fund pays him about EUR 1,525 per month. In addition, Max can apply for subsidies.
The calculation is as follows:
- REVIS: 18,300 euros per year
- Cost of living allowance: 1,652 euros per year
- Energy allowance: 200 euros per year
- Solidarity allowance: 345 euros per year
This gives an annual income of 20,497 euros, which corresponds to 1,708.08 euros per month.
It is true that REVIS allows you to use a number of subsidies and to escape high fuel prices by not having to commute to work and back. But by going to work, you have a lot of extra income, even if you only earn the social minimum wage. It should be added that even with the minimum wage you are entitled to certain subsidies and this is also true with the qualified minimum wage.
With Max’s example you get this, including subsidies:
- REVIS: 1,708.08 euros per month
- Social minimum wage: EUR 2,180.63 per month (net)
- Minimum qualified wage: EUR 2,303.25 per month (net)
Max therefore has an extra budget of 470 euros per month if he goes to work for the social minimum wage instead of the REVIS. With the qualified minimum wage, the gain amounts to almost 600 euros.
People who receive REVIS must agree to work with ONIS, the National Office for Social Inclusion, and follow an ONIS activation plan. The ONIS is responsible for social inclusion. Therefore, a person receiving REVIS commits to participating in activities, community work, courses and further training. If they participate for a limited period of time in community service, they are entitled to additional financial support, calculated on the basis of the minimum social wage. The aim of these measures is to prepare REVIS recipients for the labour market and to promote inclusion in the market. When they are ready to enter the labour market, they are transferred to ADEM.
REVIS recipients who do not participate in activation measures should expect progressive sanctions. First, they receive a written warning, then the amount of their REVIS is reduced by 20% for three months and on the third offence their REVIS is withdrawn for three full months.
REVIS recipients are exempt from the ONIS scheme in three cases:
- if they are raising a child, for which they receive child benefit, without having any means of care
- if they are acting as a carer in the context of the care insurance
- if they finish their secondary education.
It should be added that in some cases the REVIS beneficiary may have to repay the amounts received. This is the case, for example, if the beneficiary inherits or somehow obtains money from a new job that they have not earned.