Escrivá and the self-employed try to agree on the quotas according to income until 2025 to unblock the negotiation

Given the complexity of the negotiation of the reform so that the self-employed contribute according to their income, the Ministry of Security tries to agree with the social agents and the self-employed groups at least the initial deployment of the reform, for the next three years, and leave for later its complete adaptation. The department headed by José Luis Escrivá tries to obtain a social agreement for the new quotas only until 2025, of which the amounts are not yet closed, and lay the foundations for the transition to be completed in the following years, according to sources from the negotiation.

How much do the self-employed and wage earners pay to Social Security and what does the future system mean according to income

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It imposes like this the idea that the ministry had been considering since April, of finalizing the reform only until 2025, and which it explored through bilateral contacts with the negotiating parties. This Friday, the Social Security has met again the formal dialogue table, which has not been convened for many weeks, to officially present this idea and see the possibilities of a social agreement.

The three self-employed organizations –UATAE, ATA and UPTA– have positively valued this Friday's meeting and have shown their willingness to reach an agreement, something that was not so certain just a few weeks ago.

The negotiation to move to a contribution system for the self-employed according to their income instead of an elective one like the current one has been a commitment for years and a recommendation of the Toledo Pact, but it has turned out to be much more complex than expected. It takes negotiating one yearwith more or less intensity, and the parties were shown very far apart until recently.

The reform must be approved "in the first half of 2022" by commitment with Brussels, as stated in the Recovery and Resilience Plan, but the deployment was already foreseen in the documents sent to the European Commission as "gradual from that date ”.

Challenges: set amounts and legal basis for the future

Finally, it seems that this Friday the idea prevails that the parties agree on the beginning of the reform to unblock the negotiation. That is, this deployment for the first three years, from 2023 to 2025, a period in which the self-employed would already begin to contribute based on income brackets. Now they contribute with an elective system, which causes 85% of self-employed workers to contribute for the minimum, which also implies a minimum social protection (low, birth permits, pensions).

The first challenge of the negotiation at this time is to set these income brackets and the associated quotas until 2025, which are yet to be defined. Until now, the idea has been maintained that there are 13 income brackets, in which the self-employed can transit up to 6 times a year according to their income forecasts.

On the monthly installments in each of these income brackets, they are yet to be closed, sources from the negotiation insist. In the bilateral contacts of the last weeks, amounts of between 200 and 400 euros per month were addressed, but these have not been addressed at this Friday's meeting by the Ministry, they indicate from the social dialogue. The highest fees, if the amount of 400 euros per month is successful, would be downgraded from some earlier proposals.

But beyond setting the detailed deployment for the next three years, the next challenge is how to translate into law what will happen next. In other words, the complete transition of the system towards contributions based on the "real income" (or net income) of self-employed workers.

This issue is fundamental for the parties to the negotiation that are most convinced about the contribution according to income, who fear that the reform will not be "tied" enough for the coming years (in which the Government may change) and that the legal change will remain only in a partial reform, with what has been achieved and explained until 2025. The parties least favorable to this change, ATA and the employers' association of which it is a part (CEOE), are suspicious of the increase in the quotas that would apply to people with more income .

After the meeting, the ATA and UPTA have shown their willingness to negotiate until reaching an agreement, without further detail, while the UATAE have highlighted "that it is essential to make a greater effort to reduce the quota of the low sections and in the improvement of social protection”.

The parties will continue negotiating in the coming days. “In the meeting it has been verified that progress has been made since the negotiation began and meeting points have been evidenced. There is a shared will to continue working on an agreement”, highlights the Ministry of Social Security.

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