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WORKING IN SPAIN

How long do you have to work in Spain before you can claim unemployment benefits?

Unemployment benefits, known as 'el paro' in Spanish, have certain preconditions attached to them, including a set amount of time you need to work before you can claim. Here's what you need to know.

Published: 24 May 2023 16:41 CEST
How long do you have to work in Spain before you can claim unemployment benefits?
How long do you have to work in Spain before claiming unemployment benefit? Photo: CESAR MANSO / AFP

Normally in Spain, in order to claim unemployment benefits you must have contributed a minimum of 360 days to social security within the last six years, that is, to have worked for at least one year.

But what happens if you haven’t worked in Spain for a full year? Can you still claim?

What happens if you suddenly lose your job and haven’t worked long enough to qualify?

Here’s what you need to know.

Minimum time working

Firstly, it’s important to understand unemployment benefits in Spain generally come in two types: contributory out-of-work benefits, based on what you’ve contributed in the past, or a flat rate unemployment benefit given to people with insufficient contributions.

There’s also a different type of benefit for the long-term unemployed who have exhausted their contributory benefits, though this tends to be targeted more at older workers. You can read more about it here. 

However, if you have worked for less than a year in Spain, you may still be entitled to some form of unemployment benefit.

According to the SEPE website (the government department that pays unemployment benefits, Servicio Público de Empleo Estatal) the type and duration of benefit depends on the number of months you have paid in social security contributions and whether or not you have family responsibilities and dependents. 

In order to qualify for el paro despite having worked for less than a year, there are also a few further requirements:

  • You must be legally unemployed
  • Be registered as a jobseeker
  • The SEPE website states that you must have paid unemployment contributions for at least 3 months if you have family responsibilities or at least 6 months if you do not, but less than 360 days. (If you have paid contributions for 360 days, you would be entitled to the full contributory benefit, which is different).

It can all sound a little technical, but fortunately, SEPE has a useful calculator which you can find here. It allows you to calculate what you’re entitled to, how much, and how for long.

Duration and amount

As mentioned above, the duration of your benefit depends on the number of months you paid contributions for and whether or not you have family responsibilities.

If you have dependents, the unemployment will last three, four or five months if you have contributed to social security for three, four or five months, respectively.

Generally speaking, if you’ve paid in more than six months the benefit will last for 21 months. If you have paid contributions for six months or more (in this case, the entitlement will be recognised for six months, and can be extended for six-month periods until its final duration).

READ ALSO: Spain approves new €600 per month unemployment benefit for artists

If you have no dependents and meet the other requirements, the benefit lasts for six months if you have paid contributions for six months or more.

In the case of permanent, discontinuous workers, known as the ‘long-term unemployed’ in Spain, the benefits last for a period equal to the total number of months of contributions made in the year preceding the application.

How much is it?

Non-contributory unemployment benefit is equal to 80 percent of public multi-purpose income indicator (or IPREM, as it’s known) the tool used to calculate public benefits in Spain. In 2023 it works out to €480 per month. Beneficiaries of this state help have received a boost in 2023, with the amount going from €463.21 per month to €480 per month, almost €17 more per month.

In the event of loss of part-time work, this amount will be paid in proportion to the hours previously worked in the last contract.

READ ALSO: How residents over 52 in Spain can get aid of up to €480 a month

During the time you receive the benefit, SEPE pays the relevant contributions corresponding to health care benefits and, where applicable, family protection and services.

In the case of unemployment benefits for workers over 52 years of age, the SEPE must also pay retirement contributions. The contribution base is 125 percent of the minimum contribution ceiling in force at any given time.

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AMERICANS IN SPAIN

EXCLUSIVE: What the new Spain-US social security deal means for Americans

The Local speaks to the Spanish government and tax experts to understand what the new social security and pensions agreement between the United States and Spain means for American workers, digital nomads and pensioners in Spain.

Published: 15 May 2024 11:10 CEST
EXCLUSIVE: What the new Spain-US social security deal means for Americans

In early April, the United States and Spain announced a new social security and pension agreement.

The first update to the bilateral agreement between the two countries since 1986 was announced by US Ambassador to Spain, Julissa Reynoso, and Spain’s Minister of Inclusion, Social Security, and Migration, Elma Saiz.

The official agreement is unpublished so The Local spoke with a representative from Spain’s Ministry of Inclusion, Social Security, and Migration as well as international tax experts to understand the agreement in more detail.

Key aspects of the agreement

The Ministry told The Local Spain that the agreement is a step towards, bolstering mobility between Spain and the United States by improving pension calculations and social security protections.

The agreement has to do with the accumulation of benefits and affects working Americans living in Spain. There are two main components; the first affects which system people pay into (Spanish or American) and the second maximises the amount people can collect from social security.
 
Regarding paying into social security, the new agreement extends the “posting period” from three years to five years, with the possibility of extending it to seven years.

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This is meaningful for US employees who are working in Spain and means that they can now pay into the US social security system, rather than the Spanish social security system for longer.

Whereas the employee contributions in Spain and the United States are similar, 6.4 percent in Spain and 6.2 percent in the United States, the rate that employers pay differs greatly. In the United States the employer pays 6.2 percent into social security, whereas in Spain they pay 31 percent.
 
Why does this matter? “Previously when Americans moved to Spain, US employers were cutting the amount that they paid in salary because the cost of employment went up so much”, Louis Williams, Co-Founder and CEO of Entre Trámites, told The Local Spain.

It’s also made employers hesitant to grant digital nomads an Employer of Record (EOR) which would allow American workers to be on a Spanish contract.

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In terms of collecting benefits, the representative from Spain’s Ministry of Inclusion, Social Security, and Migration says, “In the calculation of the Spanish pension there have been technical modifications that will benefit especially those people who developed their last working life in the United States, without this harming those who have worked in Spain immediately before requesting the benefit.”

In other words, under the new agreement, after calculating a person’s benefits under each country’s system, the recipient will be awarded the most beneficial of those two calculations.

Impacts for self-employed workers and digital nomads

According to the Ministry, “The agreement allows self-employed workers to temporarily move to the other State while maintaining their legislation, a possibility that was previously restricted only to employed workers.”
 
This has big implications for people who avoid moving to Spain because of the complicated social security contributions scheme, as they’ll now be able to continue paying US social security taxes (rather than Spanish) for up to seven years.
 
“The interesting thing is if this is extended to digital nomads because it would make the digital nomad visa more attractive,” says Williams.

“Why? Because if you’re posted by an employer (who can now avoid high Spanish social security taxes) you’re eligible for Beckham’s Law.” The law, which does not extend to autonomous works, can cap tax liabilities at 24 percent.
 
Being posted could make life much simpler, according to Elliott Locke, ACSI, co-founder of abroaden, a financial wellbeing and education start-up for people living abroad headquartered in Barcelona.

“The calculus is harder for freelancers given the different legal structures and methods for freelancing between the two countries. In many ways, if an American moves here to work remotely, it could be beneficial for them to have their US-based employer hire them on a local contract through an employer-of-record,” Locke told The Local.
 
In short, the new agreement could make it more attractive for U.S. companies to post employees in Spain, making them eligible for Beckham’s law and allowing autonomous workers to pay into the U.S. social security system, making it more beneficial and easier to be a digital nomad in Spain.

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Who benefits from the new agreement?
 
The people who will feel this new agreement the most are employers, digital nomads, retirees who have paid into both systems over the years, and finally, civil servants. “Spain has incorporated as possible beneficiaries of the Agreement those people who have contributed to the civil servant’s regime (passive class regime), who were excluded in the previous Agreement,” says the Ministry.
 
When can we expect the new agreement to come into force?

Don’t hold your breath; this is Spain after all, but we can expect the agreement to come into force within the next two years.

The deal has to pass through Congress before approval, which is likely why it has not yet been published. If things move quickly, people could expect to benefit within a year.

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