Unemployment benefits in Spain

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Unemployment benefits in Spain are contributory and non-contributory. They are part of social security system in Spain and are managed by the State Public Employment Service (SEPE). Employers and employees contribute to the unemployment contingency fund and if an unemployed person fulfills certain criteria they can claim an allowance which is based on the time they have contributed and their average wage. A non-contributory benefit is also available to those who no longer receive a contributory benefit dependent on a maximum level of income.


What is Unemployment Insurance?
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History

The current unemployment insurance system was established by act of parliament on 23 of July 1961 in the form of the Seguro Nacional de Desempleo (National Unemployment Insurance). It followed previous systems established starting in the 1930s. A reform in 2010 resulted in the inclusion of the self-employed and domestic workers within the scheme.


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Contributory benefits

The main allowance paid to the unemployed is a contributory allowance known as 'prestación por desempleo'.

Requirements

In order to receive a contributory benefit a person must be legally unemployed after making unemployment contributions at least 360 days in the last 6 years and be registered with the employment authorities as available for work

Benefit Amount and duration

The unemployment benefit is paid for a minimum of 4 months and maximum of 24 months, based on the period that the unemployed person has contributed.

The benefit amount is based on the most recent 180 days salary with both a minimum and a maximum amount. The average daily salary of the last 180 days is multiplied by 30 to arrive at a monthly benefit base. The monthly benefit amount is 70% of the monthly base for the first six months of unemployment and 50% of the monthly base for additional months, unless limited by the minimum or maximum amounts allowed. The base amount is supplemented if the unemployed person has dependent children. A dependent child lives with the recipient and is either under age 26 or 26 or older with a disability of 33% or more. A child may not be a dependent of multiple unemployment recipients.

Minimum and Maximum Benefit Amounts

The monthly benefit amount limits are calculated using the monthly Public Income Index or es:Indicador Público de Renta de Efectos Múltiples (IPREM). Unemployment from part-time employment is modified based on the number of hours worked.

Withheld Amount

Personal income tax (see Taxation in Spain) and Social Security contributions are withheld from the monthly benefit amount. While receiving unemployment benefit, a worker must remain registered with Social Security. The amount of Social Security withholding from the unemployment benefit will be based on the average withholding for "common contingencies" (4.7% of salary) from the previous six months of employment.


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Non-contributory benefits

The 'Subsidio de desempleo' is a non-contributory benefit targeted at those who no longer qualify for the contributory benefits due to duration of unemployment or lack of contributions and is means-dependent.


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Finance

Both the contributory and non-contributory benefits are financed through a 1.55% contribution by employees and 5,5% by employers on employees salaries up to 3262 euros per month

Source of the article : Wikipedia



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