installments from 200 to 590 euros

It has taken more than a year of negotiation, but there is a social agreement on the reform so that the self-employed contribute according to their "real income". The Ministry of Social Security led by José Luis Escrivá has managed to close the consensus with the social agents and the main self-employed organizations for the deployment of this far-reaching reform, between 2023 and 2025. With the new Special Regime for Self-Employed Workers (RETA ), self-employed workers will contribute based on what they earn, like salaried workers, and not what they choose, which means that almost nine out of ten pay the minimum possible. After much dance of figures, 15 income brackets are established with fees between 200 euros and 590 euros per month from 2025, which will be reached progressively over the next two years.

To close the final agreement, Minister José Luis Escrivá put another offer on the table last Friday: the self-employed with net income below 670 euros will quote 230 euros per month in 2023, which will be reduced to 225 in 2024 and will remain in 200 euros in 2025. For workers whose net income is above 6,000 euros, the last tranche, they would pay Social Security 500 euros in 2023, to rise to 530 euros in 2024 and stay at 590 euros from 2025.

The last proposal of the Ministry that has facilitated the agreement is very far from the previous approaches of the minister. The refusal of ATA, the self-employed association that belongs to the CEOE, to accept the highest prices and the contrary positions of UATAE, linked to CCOO, and UPTA, related to UGT, to give free rein to an agreement until they were lowered the contributions for the lowest returns and that the door was left open beyond 2025 so that the contributions of the self-employed with higher incomes continued to rise have delayed an agreement that seemed closed since June 1.

To get an idea of ​​how Escrivá has had to modulate his position, in January 2022 the proposal that was on the table It had 13 sections and the self-employed with net returns below 600 euros were going to contribute with 282 euros per month in 2023, with a system that annually lowered the amount to be paid until 2031, which would remain at 184 euros per month. In the case of the self-employed with higher incomes, the barrier was placed at 4,050 euros, and followed an upward progression that went from a price of 352 euros in 2023 to 1,267 euros per month in 2031.

The organization close to the CEOE was the one that caused the most problems in the final agreement. Although ATA was in favor of the amount of the installments and the sections, there was no unanimity in the organization to approve the points of the benefits for cessation of activity, with which the final approval was transferred to a discussion that ended in the Wednesday morning within the Executive Committee of the employers' association.

It has cost, but now yes!
This morning we reached a pre-agreement with @inclusiongob on the new contribution system for the self-employed and their benefits
In the next few hours it will be submitted to the governing bodies of @CEOE_ES @cepyme_ Y @autonomosata for ratification

– Lorenzo Amor (@lorenzoamor_ata) July 20, 2022

The reform that is going to be tested finally supposes a reduction in the contribution of the workers who earn the least, since today the minimum quota is 294 euros per month (or 377 euros for the self-employed). Instead, it will mean an increase in what the self-employed with higher earnings pay, who will gradually adjust their contribution to their net income. It must be taken into account that of the more than three million self-employed workers, the largest number, about 1.3 million workers, are in the lowest bracket with less than 670 euros per month.

The system has been designed to be flexible, so that the self-employed will be able to change sections according to their income. The agreement provides that Social Security admits changes in the contribution base every two months. However, the public body will follow the evolution of the contributions of the self-employed and their income and may demand payment of the difference in the event that the worker had net income greater than the section for which he was contributing.

The social agreement also includes an improvement in social protection, mainly in the call unemployment of the self-employed or cessation of activity. The unions and progressive organizations insisted that, along with a fairer contribution based on income, Social Security also had to improve some benefits like this one.

In this sense, it has been agreed that for the cessation of activity, a 60% reduction to the entire workforce or the suspension of the contracts of 60% of the workforce is sufficient, compared to the 75% previously requested. The requirement of having contributed for the previous twelve months without interruption to access the cessation of activity is eliminated, now they require having contributed at least 12 months in the last 24 months and the requirement of not having reached the ordinary retirement age in the case of temporary or partial cessation of activity.

In addition, the reduced flat rate (70 euros per month) is maintained for workers who start their activity in the first two years. The Government proposed to restrict it only to low-income people, but it was finally extended to all new self-employed. This was one of ATA's main claims.

Another aspect that has caused the most problems to reach an agreement has been to establish in the law that at the end of the transition period of the reform the price will be fulfilled according to the net yields. According to UATAE, "the guarantee of consolidation of the system has been achieved and therefore the continuation of greater reductions as of 2025, together with the improvements in terms of cessation of activity and the commitment to continue negotiating future improvements to the system".

The general secretary of UATAE, María José Landaburu, has declared that "progress has been made so that in 2025 the quota remains at 200 euros for the section with the least income and 220 euros in the next section, which allows us to move towards the definitive contribution model for real income in a fairer way”.

📺This morning I was able to announce on @LaHoraTVE the approval of @uatae_es to reach an agreement with @inclusiongob. I have taken the opportunity to clarify some doubts that arise regarding the agreement reached.

🤔 When will the new quotas for the self-employed apply?

– Mª José Landaburu (@MJLandaburu) July 19, 2022

Reform demanded for years

The agreement will be embodied in a law with which the Government will comply with a legislature commitment from the coalition of PSOE and United We Can, but also with a recommendation from the political majority in the Toledo Pact to ensure the future of Social Security and the public pension system.

That the self-employed could decide how much to contribute generates several dysfunctions, such as minimal social protection (pensions, sick leave, childbirth permits), but also an abnormality by which low-income workers and those who earn thousands of euros a month They pay the same month after month. Because 86% of the self-employed contribute as little as possible.

In addition, this situation has generated a significant deficit in the Social Security self-employment regime (RETA), much greater than in wage earners. According to the latest data from the Ministry, the hole reaches around 10,000 million euros and means that the system spends twice as much on benefits as it earns on contributions.

This change in the self-employed system is therefore framed in the pension reform to make the Social Security system more sustainable. From now on, Minister José Luis Escrivá and his new 'number two', Borja Suárez, will have to start negotiating the remainder of the second block of measures to comply with the promised changes. All before the end of the year and under the watchful eye of Brussels.

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