The extraordinary plenary session held yesterday in the Lower House has given the green light to the Royal Decree extending coverage for cessation of activity to the entire group and exempting RETA workers on sick leave for more than 61 days from paying contributions. The Royal Decree extending the limits of 250,000 and 150,000 euros for those who pay taxes using the objective estimation system has also been approved. Both will be processed as a Bill.

The Congress of Deputies yesterday gave the green light to two Royal Decree Laws (RD) that fully affect the self-employed group: the one that improves the social protection of the group with the universalisation of the contribution for cessation of activity and the one that extends the limits of modules. Both will be processed as Bills, which implies that the approved measures should be improved thanks to the fact that the groups have the possibility of presenting amendments. In addition, as it is an urgent procedure, the final text would be ready before the month of May, since the processing period will be between two and a half and three months, half the time taken in ordinary procedures.

The first of these, the Royal Decree for the revaluation of public pensions and other urgent measures in social, labour and employment matters, approved by the Council of Ministers on 28 December, expands social protection for the self-employed by incorporating "on a mandatory basis" contributions for previously voluntary contingencies, such as cessation of activity and occupational contingencies.

In the case of the so-called “unemployment benefit” for self-employed workers, coverage is doubled to two years, double the amount currently in force. In addition, with the expected revenue from this concept, which the Government sets at 322 million euros in the draft General State Budget, the contributions of those self-employed workers on sick leave from the 61st day onwards will be paid, a new feature that is also included. For this purpose, Sánchez's Executive has allocated a budget of 105 million euros.

The aforementioned Royal Decree also includes the increase of 22.3% of the minimum contribution bases due to the increase in the Interprofessional Minimum Wage up to 12,600 euros per year (900 per month calculated in 14 payments). This percentage will not be passed on to the 2.9 million self-employed workers who contribute on the minimum basis. For these, the revision is limited to 1.25%, set at 944.40 euros each month during 2019. Contribution benefits that, in the words of the Minister of Labor, Migration and Social Security, Magdalena Valerio, are incorporated to stimulate the entry of entrepreneurs into the system, "the self-employed are a fundamental part of the labor market," she asserted.

A provisional rise

However, as stated in the Royal Decree and recalled by Valerio herself, this increase will be provisional "until a substantial change is made to the way in which contributions are determined in this special Social Security regime, which is made based on the bases chosen by the interested parties and which, after the announced modification, will be determined by the amount of income actually received, in accordance with the provisions for this purpose in the General Social Security Regime".

This issue will be discussed on the one hand at the dialogue tables with the associations representing the group, and on the other hand in the Subcommittee for the Reform of the RETA (Special Regime for Self-Employed Workers). It should be noted at this point that this is the first time that the contribution bases of the group are below those of workers in the General Regime, which range between 1,050 and 1,466.40 euros per month.

For self-employed corporate workers and those who during the past year 2018 have hired 10 or more employees, the contribution base is 1,214.10 euros per month.

Self-employed workers who pay the maximum amount will not be exempt from the same increase that will be applied to employees. This amount will be increased by 71%, reaching 2,077.80 euros per month.

Flat rate review

The Flat Rate will also be revised from 50 to 60 euros and will be extended to self-employed workers in the agricultural sector. The Royal Decree also allows self-employed mothers who return to work after maternity to benefit from the aforementioned flat rate of 60 euros for the 24 months following their return to work.

Likewise, the automatic return of 50% of the excess contributions of self-employed workers in a multi-activity regime is recognised.
There is also progress for self-employed workers with a sudden disability of more than 33% who will be able to access the framework of incentives and support for employment.

For the Minister of Labour, Magdalena Valerio, these “measures imply the strengthening of social protection and the improvement of the protective action of the Special Regime for Self-Employed Workers”. They also aim to “advance in improving the balance of income and expenditure of the system from all perspectives: financial, economic and social”.

Pensions

In terms of pensions, the Royal Decree Law ratified today in the extraordinary Plenary Session includes an increase of 3% for those receiving the minimum benefit and 1.6% for the rest. In this regard, the minister stressed that the 10.3 million public pensions “will rise above the cost of living”. Its approval is of “utmost importance for pensioners, their situation will improve in quantitative and qualitative terms”.

It should be remembered that at the end of March the Government will pay a "small payment" of 13 euros to pensioners, which will compensate for the difference of one tenth between the increase in the CPI projected at 1.61 TP3T and the actual increase at the end of 2018, which was 1.71 TP3T. This measure will cost the Executive 127 million euros.

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