The Government is working against the clock to reform the system of unemployment benefits. A range of aid designed to provide a minimum income (480 euros) to people in unemployment who have already exhausted the rest of their contributory benefits and who are in a situation of special vulnerability. Currently this aid benefits almost one million people throughout Spain. And the reform proposed by Labor would mean adding other 400,000 people who are currently without work and without any income. The entry into force of the reform is still unclear, but Labor points to the June 1, 2024.
The coalition is committed to this reform with Brussels within the framework of receiving European funds and is rushing to comply with this in view of the fourth disbursement (10,000 million euros) that the Government plans to request before the end of the year. And, according to sources in Díaz’s department, it is already committed that the new system will not imply cuts in benefits. Labor sources insist that the terms of the unemployment benefit reform have been negotiated with the European Commission.
Furthermore, they emphasize that there are sufficient resources to address this reform, since the SEPE has a surplus. Next week they will publish the exact data, which will be around the 4.8 billion euros the positive balance for the State due to the difference between contributions and payment of contributory benefits.
However, not all the Government has the same answer to the question “What should the new subsidy system be like?” The first vice president and Minister of Economy, Nadia Calvinoand the second vice president and Minister of Labor, Yolanda Diaz, these days they are experiencing their umpteenth clash over this issue. After diverging on how much it should raise Minimum salarywhat scope should the ‘Rider’s law or what aspects and how it should be regulated or not labor reform, among others.
How do Calviño and Díaz clash now to reform unemployment benefits? According to the different sources consulted, the scheme managed by the head of Economy is focused on promote full employment and reorganize aid to encourage more that the unemployed accept job offers. On the other hand, her Labor counterpart aims to improve protection, allowing more people to receive these subsidies and increasing their amount, among others.
One of the main points of friction between the two wings of the Government is the age at which unemployed people could access one of these assistance subsidies. Currently, the subsidy that most people receive is the one designed for people over 52 years of age. An aid that the Government of Mariano Rajoy restricted, that Pedro Sanchez recovered in 2019 and now promises to improve. Labor sources point out that Calviño’s department had proposed raising from 52 to 60 years the age to have access to this subsidy.
Under other conditions, unemployed people over 45 years of age and those under this age with family responsibilities can also access the subsidy.
Yolanda Díaz aspires to extend the subsidy to the unemployed under 45 years without family responsibilities, which would add some 150,000 new beneficiaries to this subsidy.
Currently the subsidy for people over 52 years of age has an amount of 480 euroswhich is the equivalent of 80% of the IPREM (the indicator that marks its exact amount each year). Both vice presidents agree on the convenience of increasing the initial amount of the benefit, which would decrease over time. From here the approach of one and the other is very different.
Always according to the Labor version, Díaz intends to increase the subsidy received at the initial time (660 euros) and then begin a downward path that would end in the current amount of 480 euros; Calviño, for his part, would have proposed starting at 600 and ending at 300 euros.
Thus, Labor advocates for a subsidy of 660 euros During the first six months, 540 euros in the following six months and 480 euros starting from the year of unemployment, until completing 30 months of the benefit. While Economy would propose 600 euros during the first trimester, 480 euros in the second, 390 euros in the third and 300 euros in the fourth and last quarter of the maximum 12-month benefit, under the Economy scheme. If in the first case, the total cost of 30 months of benefit could add up to 7,698 euros after 30 months, Calviño’s formula would lead to a sum of 4,410 euros for the 12 months of benefit.
The duration of the benefit
The proposals handled by the Government differ in who will be able to collect it, how much the aid will amount to and also how long they will be able to receive it. While Calviño’s scheme advocates a maximum subsidy of 12 months duration, Díaz aims to maintain the current maximum duration of 30 months. From their department they insist that 80% of current recipients do not completely exhaust their right to subsidy. In any case, the reform includes that the benefit be collected from the first month of your request and not, from the following, as is currently the case.
In both cases, after the end of the benefit, if the unemployment situation persists, the unemployed person would collect the Minimum Living Income (IM V).
Compatible with a job?
The reform of the unemployment assistance subsidy system aims to improve social protection while encouraging the incorporation of the unemployed into the labor market. That is why the design has been carried out in parallel in recent months with the new employment law, although this has prospered and the subsidy reform has not yet.
One of the keys to improving insertion is to make the collection of Sepe aid compatible with the first salary for a period of time. Here the intention of Work is to allow both incomes to be combined, 100%, during the first 45 days of employment contract. While, on this point, Calviño’s position has not emerged.
Extension of agricultural subsidy
Of the almost one million people who are currently receiving a Sepe subsidy, just over 80,000 receive the agricultural subsidy or ‘peonada’, as it is popularly known. This aid is currently restricted to people who work in the fields or agricultural sector in Estremadura and Andalusia and that during part of the year they are left without work due to the very nature of the collection campaigns.
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Now the intention of Labor is to extend this aid to all of Spain and that any laborer in the agricultural sector of any autonomy can benefit. This could expand coverage to 250,000 people. The Economy approach on this issue has not emerged.
What happens if a job offer is rejected?
One of the most controversial elements of the model proposed by the Ministry of Economy is to toughen the punishments for those unemployed who reject job offers to continue receiving aid. Here, Trabajo explains that Economía wanted to modify the infringements and sanctions law (LISOS) to generate incentives against the underground economy. Given that the LISOS regulates infractions committed by companies, it could mean expanding the fines for those companies that hire the unemployed ‘in B’, offering them less salary since they make it compatible with the public subsidy. For its part, the Work approach does not include any modification to the so-called ‘activity agreement’ nor about the notion of ‘proper placement’ for an unemployed person who receives an offer from employment services.