Date Published: 03/12/2020
ARCHIVED - Social security contributions rise for the self-employed in Spain at the end of a disastrous year
ARCHIVED ARTICLE
620,000 of Spain’s 3.2 million autónomos are currently not working and 85 per cent report a drop in income
In general terms 2020 has been an extremely difficult year for the more than 3.2 million self-employed workers in Spain, and the situation has not been made any easier by the implementation of increases in their social security contributions and other monthly costs as the year nears its end.
It should be pointed out that the latest increases are not the result of recent government decisions, rather they are the consequence of the activation of adjustments which were agreed upon some time ago for the period 2019-2021, but this will not make the pill any easier to swallow for the hundreds of thousands whose income has been severely depleted during the coronavirus pandemic. The latest increase is due to the activation of clauses which specified rises of 0.2 per cent and 0.1 per cent in two categories within the overall rate paid: these clauses were due to come into effect in January but were placed on hold when the first wave of Covid began to hit Spain, and for the majority of “autónomos” this means that their monthly social security contribution will rise from the minimum of 283 euros to 289 euros. Those paying the maximum contribution will suffer a rise of 37 euros to 1,245.
Six euros a month may not appear much, but the increase will be applied retrospectively over the previous 8 months, and a further pre-agreed rise of 0.3 per cent is on the way in January with no sign as yet that the government will waive it: when the agreement was reached the Spanish economy was growing at 3 per cent per year, but this year GDP is likely to fall by between 9 and 12 per cent and although there are calls for the next increase to be postponed, the high costs of fighting the coronavirus pandemic will undoubtedly result in higher taxation somewhere along the line, so it's difficult to envisage the government failing to apply the increase when it has already been agreed.
These increased costs for the self-employed come at an extremely difficult time for the members of ATA, the national association of self-employed workers. The organization estimates that losses in the sector in this year amount to 60,000 million euros, and that one in four members has lost at least 30,000 euros of income, most of them involved in the leisure sector or independent traders.
Three quarters of the self-employed are currently working at less than full capacity due to restrictions placed on their businesses to combat the pandemic, while 620,000 are effectively closed down at present. 4.1 per cent of those included in an ATA survey report that they have not worked since the first national state of coronavirus emergency was declared in March, while 56.5 per cent are working at half of capacity and only 15.7 per cent are operating as they would have expected at the start of the year.
The effect on their income has been little short of drastic: 85 per cent are making less money, around half have seen their invoicing fall by at least 60 per cent and 6.4 per cent – or around 200,000 people – have no income at all at the moment.
Almost 45 per cent of the self-employed in this country have applied for ERTE furlough schemes since March, and among those who employ others only around 20 per cent have taken all of their staff back on.
Not surprisingly, taken as a collective the self-employed are not optimistic about the future, with almost two thirds expressing the opinion that the economy will take at least two years to recover. One in ten expects to have to close his or her business eventually, and in this context Lorenzo Amor, the president of ATA, calls for the extension of aid programs until at least 31st May 2021 as well as government strategies designed to stimulate consumer spending: if these are not provided, he warns that the results will include more businesses closing down and more jobs being lost.