The Government will extend the extraordinary aid for self-employed workers who have ceased activity beyond June 30, just as will happen with the temporary layoff schemes (ERTEs) for salaried employees. This was confirmed by the Minister of Inclusion, Social Security and Migration during a virtual press conference held at the General Council of Economists. He stated that the conditions for extending this aid cannot yet be confirmed, as they are still being agreed upon with social partners and associations representing the self-employed, and must also be reviewed by the Delegate Commission for Economic Affairs.
The expiration of the extraordinary benefit for cessation of activity on June 30th has created uncertainty for this group. However, we want to inform you that the Government intends to extend this aid beyond June 30, 2020, as will happen with the temporary layoff schemes (ERTEs) for employees due to force majeure. This was confirmed by the Minister of Inclusion, Social Security and Migration during a virtual press conference held at the General Council of Economists, where he stated that the conditions for extending this aid cannot yet be confirmed, as they are still being agreed upon with social partners and associations representing the self-employed, and must also be reviewed by the Delegate Commission for Economic Affairs.
The extraordinary benefit was introduced during the state of alarm by Royal Decree-Law 8/2020, of March 17, on urgent extraordinary measures to address the economic and social impact of COVID-19, to cover "the termination of activity caused by a situation that is in any case involuntary.".
Its duration is necessarily linked to that of the state of emergency, whose sixth and final extension is valid from June 8 to 21. Taking into account the regulations issued during the health crisis and unless otherwise agreed, the benefit will end on June 30.
Proposals from the self-employed workers' group to extend the benefit
The main associations of self-employed workers, ATA, UPTA, and UATAE, have been requesting that the Ministers of Economy, Labor, and Social Inclusion decouple the duration of the extraordinary benefit from the state of emergency, as well as exempt the self-employed from paying their social security contributions. These associations base their demands on the government's decision to allow, through a Council of Ministers agreement, the extension of Temporary Employment Regulation Files (ERTEs) for certain sectors of activity, based on data periodically collected by the tripartite labor monitoring commission. They also cite as an example the specific situation of groups with similar characteristics whose rights have been protected (such as seasonal workers).
Therefore, it has been claimed:
- The extension of the benefit, in some cases until December 31.
- Maintaining this situation until the billing figures allow the group to have the economic resources to face the new normal with minimum guarantees, and to be able to cover the expenses generated by their businesses.
- The use of the benefit linked to non-voluntary or unforeseen restrictions on the activity, as well as to a criterion of income decline.
- The individual study of each case, since the same activity may not present the same case studies as another depending on the territory and environment in which it is developed.
- Define the extraordinary benefit in quarterly periods, to facilitate the mutual insurance companies' control of compliance with the requirements regarding the reduction of income through quarterly tax returns.
Regarding the procedure officially requested jointly by the ATA and UPTA associations for a "new extraordinary benefit", it distinguishes:
- The possibility of extending the extraordinary benefit through a Council of Ministers Agreement, starting on June 30.
- Access is granted to workers who, being registered and actively contributing to Social Security and having maintained this status during the second quarter of 2020, are not beneficiaries of the extraordinary benefit for cessation of activity and meet one of the following conditions: their activity was affected by restrictions due to health measures and protocols beyond June 30; and their income was reduced by at least 75% in the second quarter of 2020 compared to the first quarter of this year. They should maintain their registration and active status during the period of receiving this new benefit.
- The incorporation of self-employed workers not benefiting from the extraordinary benefit for cessation of activity who, being affiliated and in a situation of registration as of May 31 (remember that the request to the Government materialized in that month) have not requested the benefit, and the workers who prove to have contributed, at least 90 days between April 1 and October 31, 2019 (seasonal activities), provided that they meet one of the requirements indicated in the previous paragraph and maintain the affiliation and registration.
- An extraordinary benefit for cessation of activity from September 30 to December 31, when the event causing its granting in the previous quarter persists (this case would only lead to the exemption of 50% of the Social Security contribution, and not to the 75% that would be general in this proposal).
In cases where automatic renewal is not granted, the process would begin with an application period during the first ten business days of July, submitted to the corresponding mutual insurance company and accompanied by a sworn statement. The mutual insurance companies themselves would issue a provisional approval decision, which would entitle the insured to receive the benefit, subject to subsequent review.
Therefore, the main claim would extend, according to this proposal, until September 30, also anticipating that by means of a Council of Ministers Agreement it may be extended even further until the end of the year, taking into account the restrictions on activity for health reasons that remain at that date.
On the other hand, and apart from the temporary extension of the benefit, a special subsidy for self-employed workers linked to seasonal activities and tax incentives have also been urged, among many other proposals.
So far, and without prejudice to reinforcement measures for certain groups (agricultural workers, artists in public shows, etc.) the measure of extending the extraordinary benefit has not been adopted, nor the adoption of long-term plans that address the multiple factors that affect the self-employed.
Consequently, these workers face the end of the extraordinary benefit and a situation of uncertainty and insecurity, given the difficulties in many sectors of economic activity and considering that the reopening of their businesses entails a series of labor costs and expenses that could not be compensated without this support.
Let us remember that the benefit is one more protection measure, which is accompanied by others such as the recognition and payment of aid, ICO loans (requested by more than one million self-employed workers), microloans, the moratorium on the payment of contributions or the deferral of debts with Social Security, as well as various state and regional subsidy programs
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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