Four benefits struggling self-employed people in Spain can apply for

If you're an "autónomo" (self-employed person) in Spain who is struggling to make ends meet due to the coronavirus pandemic, there are several financial support packages that you should know about.

Four benefits struggling self-employed people in Spain can apply for
Photo: Martaposemuckel/Pixabay

Many of Spain's 3.2 million self-employed people (around 16 percent of the country's working population) have seen their income sources dry up during the country's lockdown and subsequent economic recession. 

Fortunately, a new set of government measures came into force on October 1st which aim in part to help self-employed workers who may have seen their businesses suffer during the pandemic. 

These financial support measures will be available until January 31st 2021. Find out below which type of aid you might be eligible for. Each one can be applied for through your mutua, which was assigned to you when you became autónomo

1)   Cese de actividad ordinario (cessation of normal business activity)

This benefit covers autónomos who have had to stop doing their usual economic activity because of the pandemic or those whose income has dwindled because of it. It was brought into force in July, but has now been extended.

Requirements: Applicants must have been contributing social security payments and been signed up to the autónomo system for the past 12 months. Your turnover for the fourth quarter must have fallen by 75 percent compared to the same period in 2019, and your income cannot exceed €5818,75 or €1939,58 per month.

2)   Ayuda por bajos ingresos (help for low earners)

The benefit for low-income workers has been put into place for all those autónomos who do not meet the conditions for the benefit above, such as those who have not contributed to the social security for the past 12 months. They will receive around 50 percent of the minimum contribution base, approximately €760.

Requirements: To be eligible for this benefit, income must not exceed minimum wage, set at €950 per month. You will also have to prove that your income has fallen by 50 percent in this fourth quarter, compared to the first three months of the year.

Taxes for autónomos. Photo: Steve Buissinne/Pixabay 

3)  Ayuda por suspensión de actividad (Suspension of business activity)

This help is aimed at autónomos who have had to close their businesses due to Covid-19 restrictions, such as those who might work in nightlife venues that have now been ordered to close.

Workers who are eligible for this benefit will receive 50 percent of the minimum contribution base, approximately €760 or 70 percent of the minimum contribution base (€950) if they have a large family and they are the sole earner.

Requirements: The applicant must have been discharged from their work within the last 30 days, prior to the application, in order to benefit.

4)  Ayuda para temporeros (Help for seasonal workers)

Like the first benefit, this help for seasonal workers has now also been extended. This is for those who have worked at least four months between June and December of this year. 

Requirements: You must have worked less than 120 days during 2018 and 2019 to be eligible. In addition to this, your income so far in 2020 can't have exceeded €23,275. 


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Spain to slap new tax on millionaires whilst cutting taxes for low earners

Spain will cut the income tax of low-earning households and introduce a new tax for residents whose wealth exceeds €3 million, the latest chapter in the fiscal war being waged between the left-wing national government and its right-wing regions.

Spain to slap new tax on millionaires whilst cutting taxes for low earners

The government will reduce the income tax on people earning up to €21,000 ($20,200) per year, or one in two workers, Budget Minister María Jesús Montero told a news conference om Thursday.

At the same time, she confirmed the government will slap a new tax in 2023 and 2024 on residents whose wealth exceeds €3 million to help pay for inflation relief measures.

This so-called “solidarity” tax will affect some 23,000 people, or 0.1 percent of taxpayers, and raise €1.5 billion for state coffers over the two years, she added.

Prime Minister Pedro Sánchez’s government announced last week that it would create a temporary tax on the wealthiest population without giving details.

“Since we began governing, we have been working to make our fiscal system more progressive, efficient and strong enough to support social justice,” Montero said.

The announcement of the tax changes comes as Spain is gearing up for local elections in May 2023 and a general election expected at the end of next year.

Last week, the right-wing leader of Spain’s southern Andalusia region decided to axe wealth tax and lower income tax in a bid to attract wealthy taxpayers.

Within a matter of days, Valencia’s left-wing regional president announced a reduction in income tax for the vast majority of taxpayers in the eastern autonomous community. 

Spain’s Personal Income Tax (IRPF) is a state tax, but half of its collection is controlled by the autonomous communities.

READ MORE: How Spain’s politicians are waging a tax war ahead of 2023 elections

Spain is battling a surge in inflation as a result of the fallout from the war in Ukraine and the reopening of the economy after pandemic-related lockdowns.

The country’s inflation rate eased to 9.0 percent in September as energy prices fell, down from 10.5 percent in August, but remains high.

Sánchez has in recent months rolled out aid packages to help households and businesses weather the inflationary pressure, which has soared across Europe due to the Ukraine war.

It has introduced free public transport, subsidised petrol prices and temporarily slashed the sales tax on gas among other measures, in moves that are expected to cost some 30 billion euros — or 2.3 percent of Spain’s gross domestic product.