Spain proposes changes to unpopular new social security taxes for self-employed

The Spanish government has suggested changes to the new controversial social security rates for aútonomos which they want to introduce in 2023, this time proposing that contributions on “real earnings” should be between €214 and €991 rather than between €184 and €1,267.

Spain proposes changes to unpopular new social security taxes for self-employed
Spain's Minister of Social Security and Migration Jose Luis Escriva. (Photo: Pierre-Phillipe Marcou/AFP)

Spain’s Social Security Ministry has proposed a new version of its social security payment quota system for the self-employed after their initial proposals in January were roundly criticised.

Spain’s self-employed workers – known as autonomós in Spanish – already pay the highest monthly social security fees in the EU and have complained for years that the system is unfair. These monthly fees, which currently run up to a maximum of €294 a month after two years as self-employed, are separate from income tax. 

The new contributions system proposed in mid-January by Minister of Social Security José Luis Escrivá has been rejected by self-employed unions and many autónomos, as it could see them paying double the amount that freelancers in France and Germany pay and triple that of those in the UK.

Escrivá had suggested a system consisting of 13 different tax contribution brackets based on ‘real earnings’, from those who earn less than €600 a month to those who make more than €4,050 a month.

The new model would have introduced a minimum monthly contribution of €184 for low-earning autónomos and up to €1,267 for the top earners.

This would be done gradually over a period of eight years, so from 2023 to 2031 minimum earners would see their monthly tax contributions drop year after year, whereas high earners would see them rise year on year.

Escrivá said on Friday that after studying the negative response from self-employed unions, “substantial modifications have been made with respect to the latest proposals, in response to the different requests of the social partners”.

The new proposals

Hoping to get unions onside, the Ministry for Social Security have promised – verbally, but not yet in writing – that net income will be redefined, and that some of the costly expenses many self-employed workers face will now be allowed as deductions. 

As for social security contributions, the new plans have already been criticised as they modify contributions at the lower and upper end of the income spectrum in what is perceived to be a non-progressive way: it now proposes a €30 increase to €214 a month for the lowest self-employed earners, those earning under €700 a month, and a €276 reduction to €991 a month for the highest earners.

So the tweaked proposal is slightly better for higher earners (but still very high) and slightly worse for the lowest earners.

Cuts for high earners

The latest plans lower the monthly social security contribution for high earners to €991.44 from €1,267 as initially proposed.

Middle earners

The bulk of the reductions, however, will come in the middle earners bracket (those who earn between €900 and €1,500 a month) where a large portion of Spain’s self-employed workforce sits. 

It is believed that the full details of the new proposals, including the rejigging of the contributions, will be shared with self-employed organisations next Monday but sources say it is believed self-employed workers with a “real income” below €1,125 per month will contribute €264; those earning up to €1,300 per month will contribute €316 monthly (€36 less than originally proposed), and workers with a real income of €1,500 per month will face a €392 monthly fee (€21 less than previously thought). 

Lower earners and first-timers

It is believed those who fall in the €700 – €900 per month quota section will maintain a monthly fee of €245, and that some exceptions for new self-employed workers will be kept: if you are a first-time freelancer, for example, there are some reductions – €60 per month for the first year, €143.10 per month from months 13 to 18, €200.30 per month from 19 months to 2 years, and the same amount up until 3 years.

Unions still not happy

Yet unions are reportedly unhappy that lowest earners will, under the tweaked proposals, see an increase in contributions, whereas the very top earners will see a decrease. “It is an insufficient proposal”, said Eduardo Abad, president of UPTA. “We want there to be substantial savings for the self-employed… the upper brackets are the ones that have to make a greater contribution effort so that the lower brackets can reduce theirs,” he added.

Government reaction

The junior coalition government partner, Unidas Podemos, has also questioned Escrivá’s revised proposal. Party spokesperson in the Congress of Deputies, Pablo Echenique, said on Twitter: “The initial proposal was already unacceptable. Now they want to lower the fee for the self-employed who earn the most and raise it for the most precarious?”

Self-employed’s social security contributions are a story that seems set to rumble on into 2022.

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Spanish government divided over proposed menstruation leave bill

Talk of abortion policy reform and proposed menstrual leave has dominated Spanish discourse this week, but it’s also dividing Spain’s coalition government.

Spanish government divided over proposed menstruation leave bill

Spain’s PSOE-fronted coalition government recently outlined proposals that have dominated public discourse in the country.

But the legislation, which would allow women over the age of 16 to get abortions without the permission of their parents and introduce ‘menstruation leave’ for those suffering serious period pains, has not only divided Spanish society but the government itself.

The proposals would make Spain a leader in the Western world, and the first European Union member state to introduce menstrual leave, and changes to abortion law would overturn a 2015 law passed by the conservative People’s Party that forced women aged 16 and 17 to obtain parental consent.

The wide-ranging bill would also end VAT on menstrual products, increase the free distribution of them in schools, and allow between three and five days of leave each month for women who experience particularly painful periods.

READ MORE: What are Spain’s abortion laws for foreign residents and visitors?

Menstrual leave

Ángela Rodríguez, the Secretary of State for Equality, told Spanish newspaper El Periódico in March that “it’s important to be clear about what a painful period is – we’re not talking about slight discomfort, but about serious symptoms such as diarrhoea, fever and bad headaches.”

“When there’s a problem that can’t be solved medically, we think it’s very sensible to have temporary sick leave,” she added.

Cabinet politics

The proposals are slated for approval in cabinet next week, and judging by reports in the Spanish media this week, it is far from reaching a consensus. It is believed the intra-cabinet tensions stem not from the changes to abortion and contraception accessibility, but rather the proposed menstrual leave.

The junior coalition partner in government, Podemos, largely supports the bill, but it is believed some in the PSOE ranks are more sceptical about the symbolism and employment effects of the proposed period pain policy.

Vice President and Minister of Economic Affairs, Nadia Calviño, said this week: “Let me repeat it very clearly: this government believes and is absolutely committed to gender equality and we will never adopt measures that may result in a stigmatisation of women.”

Yet Second Vice President and Minister of Labour, Yolanda Díaz, who is viewed as further to the left than President Pedro Sánchez and other PSOE cabinet ministers, is reportedly “absolutely in favour” of the measure to reform Spain’s “deeply masculinised” labour market.

Sources in the Spanish media have this week also reported that some PSOE cabinet ministers feel the proposed paid leave not only plays up to stereotypes of women, or stigmatises them, like Calviño says, but also places them at a disadvantage in the world of work.

Minister of Inclusion, Social Security and Migration, José Luis Escrivá, stated that while the government should seek to improve women’s employment protections, it should also seek to boost their participation in the labour market under “better conditions.”

In that vein, some feel menstrual leave could be used a form of of employment discrimination similarly to how pregnancy has been historically, and the policy would, in that sense, actually be more regressive than progressive in enshrining women’s workplace rights. 

READ MORE: Spain eyes free contraception for under-25’s

Trade unions

Trade unions are also sceptical of the menstrual leave legislation. Cristina Antoñanzas, deputy secretary of UGT, one of Spain’s largest trade unions, has echoed those in the cabinet who feel the proposals could “stigmatise women.” She added that “it does women a disservice.”

Public opinion

A survey run by INTIMINA found that 67 percent of Spanish women are in favour of regulating menstrual leave, but also that 75 percent fear it is “a double-edged sword” that could generate labor discrimination.

The survey also found that 88 percent of women who suffer from disabling and frequent period pain have gone to work despite it. Seventy-one percent admitted that they have normalised working with pain.

Cabinet showdown

The proposed menstrual leave policy will be debated in cabinet next week when the Council of Ministers debates and approves the broader abortion and contraception reforms. According to sources in the Spanish media, and many cabinet ministers themselves, it seems a consensus on menstruation leave is a long way off.