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Unemployment Benefits For The Self-employed In Spain

Social SecurityEntrepreneur

unemployment benefits

If you’re thinking of becoming self-employed in Spain, you’re probably wondering if there is an unemployment benefit for the self-employed. The short answer is no, at least not what we know as traditional unemployment. The long answer is no, but you are eligible for a similar kind of assistance. However, you will have to meet a series of very demanding requirements.

Although there is no unemployment benefit within the self-employed workers’ scheme, there is indeed an unemployment benefit for termination of activity. This benefit provides financial protection for all self-employed workers who have been forced to cease their activity completely due to circumstances beyond their control. They have done so either for a definitive time or a temporary period.

WARNING: Seek advice before starting your application and evaluate your case!

If you are thinking of applying for unemployment benefits, you should think it through and discuss your situation with a specialist adviser. However, you should be aware that this process can be pretty complex.

To give you an idea, in 2017, more than 53% of applications were rejected. In addition, Social Security collected more than 132 million euros in 2017 for cessation of activity. Of the total, only 16.5 million euros were allocated to accepted benefits, according to data revealed by the Union of Professionals and Self-Employed Workers (Unión de Profesionales y Trabajadores Autónomos).

From Selfemployed Spain, we, therefore, recommend that you contact a specialised team before you start the cancellation process as if you do so, you may lose all the coverage and bonuses corresponding to your contribution.

Requirements you must meet to claim unemployment benefits for the self-employed

We will now tell you about the conditions you must meet to qualify for the benefit.

You must have a minimum contribution period of 12 months.

The essential requirement is that you must have paid at least 12 consecutive months of uninterrupted contributions to qualify for unemployment benefits.

No Social Security debts.

You should precede the cessation of the activity with a period of losses. However, if a bad financial situation prevents you from paying any self-employed contributions, Social Security will refuse the benefit.

To avoid risks, it is advisable that you make sure that you are up to date with your Social Security payments before starting the application procedure. To do this, follow our tutorial on how to obtain a certificate of good standing.

You should note that this condition extends to any debt, including tax settlements.

You must have recorded a minimum loss volume.

One of the most controversial legal provisions concerning granting unemployment benefits is the minimum amount of losses you must have recorded.

In order to be approved, you must have a 10% loss in excess of your income over the last 12 months before you apply.

For example, if you have had a turnover of 20,000 euros in the last year as a self-employed person, you must also have a loss of at least 22,000 euros.

In these circumstances, the vast majority of self-employed professionals cannot stay at work for a year and tend to leave the self-employed regime prematurely without access to the benefit.

There is also the possibility of a termination benefit if you can prove that you have made a loss of at least 20% in excess of your income for two consecutive financial years.

Unfortunately, the higher your volume of losses, the more likely your application will be approved.

You must close your establishment before it is open to the public.

Suppose you carry out your activity in an establishment open to the public. In that case, you must close it before starting the application unless you are engaged in a different activity for which you have paid contributions during your period of employment.

If you enter insolvency proceedings, you will be entitled to the benefit.

If you go into insolvency proceedings because of your losses, you will be entitled to a termination benefit. In this case, you must withdraw an administrative licence from which you carry on your activity.

In addition, this provision extends to all those who have to pay at least 30% of the income generated during the previous year in payment of debts due to judicial or administrative enforcement.

There are circumstantial factors to take into account.

A divorce between the partners in a business makes it more likely that they will receive a termination benefit. In addition, special coverage is given to all victims of gender-based violence.

You must have been registered with RETA.

To apply for a severance benefit, you must have been registered with RETA (Social Security’s Self-employed Special Regime). In addition, it is essential that you have been covered for occupational contingencies and cessation of activity during your employment period.

The cause of termination must not be voluntary.

It would be best if you justified the cause of the cessation of activity based on supporting documents. Some of the most common are tax forms 303, 130 or income tax returns from previous years. These will also show whether you meet the requirements regarding the volume of losses.

You must also accredit the motivation that leads you to request the cessation of activity. It must be of an economic, technical, productive or organisational nature. In addition, it must be due to a cause beyond the applicant’s control. Some of the major causes could be a loss of administrative licence, a natural disaster, a divorce or gender violence.

You will have to sign a reintegration commitment.

To formalise your benefit application, you must sign an activity commitment in which you undertake to carry out training activities to reintegrate into the labour market.

You must not have reached retirement age.

You must not be old enough to start the retirement procedure to receive the benefit.

If you have hired workers, you must provide supporting documents.

Do you have or have you had one or more employees? To qualify for unemployment benefits for the self-employed, you must comply with the guarantees, obligations and employment provisions regulated by law. That must be certified by an affidavit.

How to apply for this benefit?

Your mutual insurance company or the SEPE will carry out the process. You will have to formalise the Application for the Cessation of Activity Benefit and accompany it with the necessary supporting documentation at the Provincial Directorate that corresponds to you:

What is the deadline for submission?

In order to apply for the benefit, you must have registered with the RETA and officially ceased your activity. However, you should be aware that there is a maximum period of 30 days from then to submit the application.

What is the amount of the benefit?

The amount you will receive is 70% of the regulatory base calculated on the average of the bases you have paid contributions to during the last 12 months before the cessation of activity. 

In addition, the minimum amount to be received will not be less than 80% of the Public Multiple Effect Income Indicator if the self-employed person does not have dependent children and will be a maximum of 107% if they do have them.

If you have paid contributions at a lower rate than the minimum rate, the maximum amount to be received will be 175% of the IPREM. If you have one child, the maximum will be 200%, and if you have more than one child, the maximum will be 225%.

Duration of the unemployment benefit for self-employed persons

The duration of the severance benefit varies according to the number of contribution periods completed within the 48 months before the legal situation of cessation of activity. Of which at least 12 must be continuous and immediately prior to the situation of cessation of activity, under the following scale:

Contribution periodDuration
from 12 to 17 months4 months
from 18 to 23 months6 months
from 24 to 29 months8 months
from 30 to 35 months10 months
from 36 to 42 months12 months
from 43 to 47 months16 months
48 months and older24 months
Table of the duration of the activity termination benefit for self-employed workers

You can claim the benefit for the second time in a row

If you have received unemployment benefits, you are entitled to make a new application. To do so, at least 18 months must have elapsed since the payment of the previous one was completed.

As you can see, this is a long process, and you will need to consider different factors. Before taking the step, we recommend you study your situation with a specialised team.

Be Self-employed in Spain And Collect Unemployment Payments

The Minimum Contribution Base Of The Self-employed In Spain

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