Beggars and buskers in Madrid are requested to declare their earnings

Around 3,000 people in Madrid have been receiving a 400-euro subsidiary benefit for a decade

The social security department in the region of Madrid is reported to be tightening up its control over the 400-euro subsidiary benefit payments made to the long-term unemployed, asking them to declare any earnings made through begging, busking or collecting scrap metal.

The intention of the “Renta Mínima de Inserción” (RMI) benefit is to ensure that those with no source of regular income are able to survive financially, and an article in national newspaper El País suggests that some of the beneficiaries are so stunned by the request for information that they disclose a random amount. This amount is then augmented to make a deduction from the 400-euro payment, so that if a beggar reports that he or she receives 100 euros per month it will be treated as if the gross amount received were 190 euros, reducing the RMI payment to 210 euros.

The earnings statements are required on a monthly basis, and the regional government reports that all calculations are made according to the specifications of the law which established the RMI. Therefore, if a scrap metal collector declares that he is no longer receiving income, the following month’s benefit is re-calculated.

This question highlights just how difficult it is for those who live on or below the poverty line in Spain to get by and improve their situation, with any income they do manage to scrape together often failing to make any difference to their lifestyles. In fact, it is suggested that many actually invent earnings in order to justify the fact that they are managing to stay afloat, thus making themselves poorer.

There is no question that the conditions for receiving the RMI payment are designed to prevent tax fraud, but cases such as these highlight the dangers of treating all undeclared earnings in the same way. It is hard to see busking or begging as “undeclared economic activity” in the same way as working in crop fields or behind a bar without a contract of employment, and there is even an argument that those who collect and sell scrap metal and other items (as long as they do not do so by stealing the wiring from street lamps) are performing a valuable public service: after all, they contribute to recycling by their activity, help to keep neighbourhoods clean, and often do a favour to householders by saving them a trip to the recycling park!

The RMI benefit is received by around 30,000 families in the region of Madrid, and consists of 400 euros per month if it is for a single-person family unit. A second family member qualifies the beneficiary for 112.67 euros more, while after that additional dependents add another 75.11 euros each up to a maximum of 735.90 euros.

In Madrid a third of those receiving this benefit have been doing so for over 5 years, and as many as 11.6 per cent for at least a decade.