The four 'unemployment' aids created by the new reform of the self-employed

The reform of the self-employed agreed in the social dialogue is already in the BOE. The legal text breaks down the details of the new contribution system, by which workers will pay based on their earnings starting in 2023, but it also includes a second leg that is more unknown and that the self-employed groups have fought a lot during the negotiation. This is the improvement of social protection, basically focused on the so-called 'employment of the self-employed', the benefit for cessation of activity. This will be more accessible, but in addition four new modalities are created by which aid can be received.

The Minister of Social Security, José Luis Escrivá, highlighted this second area of ​​the reform on Tuesday after the Council of Ministers, on which he indicated that it already had its antecedent in the pandemic. Given the stoppage in the country due to COVID and its subsequent effects on the economy, the coalition government deployed extraordinary 'unemployment' aid for the group that were extended as the ERTE. These came to cover practically half of the more than three million self-employed people, compared to what happened in the previous crisis, in which the group was abandoned.

Now, the reform includes some changes to make the ordinary 'unemployment' that already existed more accessible and also establishes new situations that will give the right to aid.

The 'unemployment of the self-employed', or the benefit for cessation of activity, was little known due to its limited scope, which the self-employed groups (ATA, UATAE and UPTA) blamed on its difficult access. With the previous government of Pedro Sánchez, Minister Magdalena Valerio has already agreed to changes so that it reaches more self-employed workers, such as the obligation to contribute for this contingency for the entire group – still very low (0.9%) compared to what the self-employed pay. wage earners due to unemployment (from 7% to 8%) and doubled its maximum durationup to two years of 'unemployment' compared to the previous twelve months, among other measures.

In the current decree of Minister Escrivá, the minimum contribution required to receive the benefit is relaxed. If previously it was necessary to have contributed for at least twelve months "continuously and immediately prior" to the cessation of activity, now access is allowed with at least 12 months of contributions "included in the twenty-four months immediately prior" to this situation.

In addition, for the new forms of partial 'stoppage', by which workers can receive help and keep their businesses open with reduced activity, the requirement that excluded workers who had reached the legal retirement age has been eliminated.

The legal text breaks down new situations that give the right to severance pay, which can be summarized into these four types:

1) Partial cessation due to reduction in activity

Until now, the 'stoppage' of the self-employed could only be collected if the activity ceased completely, the workers' business was closed, either permanently or temporarily. Now, the Government enables the possibility of receiving a benefit for partial dismissal, with an amount of 50% of the contribution base (instead of 70% of ordinary 'unemployment'). Beneficiaries will be able to receive the aid while they continue to work.

Two situations are established, for the self-employed with dependent workers and those who do not:

— With dependent workers: those who have at least 60% of their workforce suspended, or with all workers with at least a 60% reduction in working hours given a situation of great loss of activity (with a fall of at least 75% of income in the previous two quarters).

In addition, the self-employed applicant for partial benefit must have low earnings: the monthly net income of the self-employed worker during those quarters "for all the economic, business or professional activities carried out" cannot reach the minimum interprofessional salary or the base reduced by the one that came contributing (if this is less than the minimum wage).

— Without dependent workers: the self-employed person requesting the aid must have "collectible debts with creditors" whose amount exceeds 150% of ordinary income or sales during the two fiscal quarters prior to the request. In those quarters, these revenues or sales have had to collapse, at least 75% compared to the same periods of the year or previous years.

The worker cannot have returns above the SMI or the reduced base for which he was previously contributing.

2) Partial 'stoppage' due to force majeure

Until now, the ordinary 'stoppage' of the self-employed could be perceived in a situation of force majeure that meant the total cessation of activity. The reform also enables for these situations of "force majeure" the possibility of charging partial termination, with which the beneficiaries can receive the aid and work, with an amount of 50% of the regulatory base.

They will have access to aid "when the interruption of the company's activity affects a sector or work center, there is an emergency declaration adopted by the competent public authority and there is a drop in income of 75% of the company's activity company in relation to the same period of the previous year", collects the rule. In addition, the monthly income of the self-employed worker must be less than the "minimum interprofessional salary or the amount of the base for which he was contributing if it were lower."

3) Provision for new ERTEs due to cyclical crises

The Government creates specific aid linked to the new ERTE, the Network Mechanisms that were approved in the labor reform. On the one hand, the so-called "benefit for the sustainability of the activity of self-employed workers in a sector of activity affected by the RED Mechanism for Flexibility and Stabilization of Employment in its cyclical modality". These ERTEs are designed for economic crises and it highlights that workers are not required to comply with the minimum contribution required for the cessation of activity, nor does their perception consume quoted time.

In the event of having dependent workers, the self-employed must have applied a Network Mechanism that reaches at least 75% of the workforce, as well as having suffered a reduction in income in the two previous quarters of 75% and that their net income does not reach the minimum wage or the reduced base for which he was contributing. If you do not have workers, the aid applicant must meet the last two requirements.

The amount of the aid will be 50% of the regulatory base "provided for in section 3 of the reduced table", somewhat below the minimum wage, as well as the payment of half of the Social Security contributions (the other half must be paid by the worker). The duration of the aid varies according to the case, with the possibility of extensions, but in no case can it be extended for more than one year.

Then there is a kind of employment commitment, as with the ERTE, by which the beneficiaries are required to maintain their activity six months after receiving the aid.

4) Provision for new ERTEs due to sectoral crises

The "benefit for the sustainability of the activity of self-employed workers in a sector of activity affected by the RED Mechanism for Flexibility and Stabilization of Employment in its sectoral modality" is designed for the new sectoral ERTEs, aimed at restructuring sectors. This formula has already been inaugurated, with travel agencies.

In this case, the usual quoted minimum is required. The rest of the key requirements are repeated with respect to the previous benefit (Network Mechanism for at least 75% of the workforce, 75% drop in income and income below the SMI).

The aid will be paid in a single payment and must be invested in the activity, the professional reorientation of the self-employed person. This must provide a requalification plan and have an "investment project and activity to be developed". In addition, the beneficiary will only have to pay half of the Social Security fee.

The amount of the benefit will depend. In the case of freelancers with dependent workers in their companies, it will be 70% of the regulatory base "and its determination will be linked to the duration of the RED mechanism", which in no case may exceed what would correspond to the benefit for ordinary cessation given the quoted time. For those applicants without dependent employees, the amount of the benefit will be 70% of the regulatory base given their contribution periods.

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