It has being a long time in coming but it would appear that the Ministry of Employment has finally heard the cries of thousands of self-employed business owners in Spain with regards to their right to unemployment benefits. Due to the economy’s poor state of affairs, many self-employed people have had to say goodbye to their dreams and hard work as the current climate has made it impossible for them to maintain their businesses afloat. This is also true for thousands of workers who have lost their jobs but the difference is they at least the right to unemployment benefits until they manage to find other employment, sadly, this in not the case for those who are self-employed.
In 2011, it seemed that there had been a breakthrough on that front when additional measures were included in the self-employed monthly contribution so that if the business bombed, they could claim unemployment much in the same way an employee would as long as they could prove that the business had catastrophically failed on all levels. This triumph didn’t last long due to the difficulty of proving absolute failure to the authorities; in fact, Social Security rejected approximately 75% of all claims made even though the business owner had been paying an additional amount each month in that concept. As a result, many business owners decided to remove that “benefit” from their monthly fee, as it didn’t seem worthwhile and only fueled the idea that there is a definite inequality in comparison to workers on contract.
In order to opt for this supposed benefit, an additional 2,2% was added to the base amount for at least one year and was linked at the same time to other benefits in the event of work related accidents and illness so by coupling these benefits, the contributor could expect to pay 7% more on top of the normal rate which as we know in Spain, it is one of the highest rates in the world. Recent changes in legislation also incline towards making contributions towards unemployment obligatory for all new self-employed persons.
The presidents of self-employed workers associations ATA and UPTA are in agreement with the Ministry’s line of thinking but at the same time they feel that the additional 2,2% should be reduced so that the majority will be able to opt for this benefit. In order to facilitate access to unemployment benefits, it looks as if previous requirements will be less discriminating so instead of proving losses of between 20% and 30%, all the business owner would have to do is show losses over a 12-month period.
As long as the requirements upon applying for the benefit improve immensely, this could be a positive move that will bring an element of security to anyone wishing to start their own business, however, nothing is given away, everything has a price and in this instance, we could be looking at an increase across the board in monthly contributions from the year 2015 to coincide with contributions towards unemployment for self-employed business owners becoming mandatory.
Bear in mind that recent statistics have shown that self-employed business owners generated 47.309 new jobs in Spain during the first half of 2013. This fact alone should be enough for the government to relax certain laws to enable them to continue along those lines, focus on growing their businesses, therefore creating and maintaining further job positions without the extra burden of paying increased social security contributions and taxes since they really have been the driving force that has basically kept the economy afloat.
The objective in any case is to provide self-employed business owners with certain guarantees and securities so to that end, we can only cross our fingers and hope the government listens to its people and the associations that defend the interests of business owners to bring about improvements to current conditions for a hard working group.