Unemployment Benefits: Eligibility, Duration, and Amount
Protection for Unemployment
The purpose of this provision is to protect those who, being able and willing to work, have lost their jobs or have seen their normal working hours reduced. Thus, unemployment can be total (when workers temporarily or permanently cease their work, failing to receive wages) or partial (when their working hours and pay are reduced by at least a third). The provision of unemployment has two levels: tax and welfare, both mandatory. The first is to provide benefits as an alternative to wage income, and the second (complementary to the above) is to protect workers who are in one of the situations described in Article 215.
Those entitled to this benefit, having contributed to it, are workers in the general scheme, staff contracted under administrative law, and civil servants at the service of the government (Article 205.1), as well as employees of other special schemes to protect this contingency, and those released from prison.
Unemployment Protection Includes the Following Benefits:
- At the contributory level:
- Provision for total or partial unemployment.
- Payment of the company’s contribution for Social Security while collecting unemployment benefits.
- At the welfare level:
- Unemployment allowance.
- Payment of contributions to Social Security benefits for healthcare, family protection, and, where appropriate, a pension, while receiving the unemployment benefit.
In addition, specific training, development, counseling, retraining, and vocational integration of unemployed workers and others whose purpose is the promotion of stable employment, by general or regional administration.
Unemployment Benefit (Contributory)
The most important reforms have affected the taxable level of protection, which we will explain below.
Requirements of the Beneficiary
Article 207 of the LGSS establishes the requirements for entitlement to these benefits. Thus, the persons named require the following criteria:
- Be affiliated with Social Security in situations of being registered or equivalent.
- Have completed the minimum period of contribution, which is 360 days, within 6 years before the legal unemployment situation or the time when the obligation to contribute ceased.
- Be legally unemployed and prove their willingness to actively seek employment and accept appropriate placement.
- Have not reached the required age for entitlement to the contributory retirement pension, unless they have not covered the period required for it.
Application of the Benefit
The amendments approved by Royal Decree-Law 5/2002 introduce a new procedure for the application for recognition of this right. Now, to apply for the provision, once the legal situation of unemployment has occurred, not only is registration as unemployed required, but also the signing of an activity commitment, referred to in Article 231 of the LGSS.
Duration
The duration of the benefit has not changed, which depends in any case on the period of insurance in the last 6 years before the legal situation of unemployment occurred or when the obligation to contribute ceased.
Amount of Benefit
The amount is a function of the worker’s base salary. The base salary is the average of the bases of Accidents and Occupational Diseases, for which they are listed in the 180 days prior to legal unemployment or the moment when the obligation to contribute ceased.
The amount to be received is:
- During the first 180 days, 70% of the base.
- From day 181 onwards, 60% of the base.
The amounts thus calculated may not exceed the upper limit or be lower than the minimum limit set.
The maximum unemployment benefit is 175% of the Public Income Indicator of Multiple Effects (IPREM), unless the employee has one or more dependent children, in which case, the amount will be 200% or 225% of that indicator, respectively.
The minimum unemployment benefit is 107% or 80% of the IPREM, depending on whether or not the worker has dependent children, respectively. In the event of unemployment due to loss of part-time employment, the minimum and maximum amounts referred to above shall be determined taking into account the IPREM in proportion to the hours worked.
For these purposes, the IPREM increased by one-sixth, in force at the time of the accrual of the right, is taken into account.
Suspension, Resumption, and Termination of the Provision
The reform, on the contrary, has affected the causes of suspension of benefits and the assumptions of resuming them. These are basically technical amendments, referring to specific legislation such as the Law on Offences and Penalties of Social Order and the Labour Procedure Act.
Regarding the suspension of the provision, it can vary from one month to three or even involve the extinction of the provision, depending on whether the violations are minor, serious, or very serious. To learn what these violations are, one must refer to the Law on Offences and Penalties in the Social Order.
The enforcement of a sentence involving deprivation of liberty and the performance of work whose duration is less than 12 months are maintained as grounds for suspension of the provision.
A new case of suspension is introduced, where the employer makes use of the declarative sentence of unfair dismissal and has opted for reinstatement of the worker. In this case, the worker’s provision will be suspended during the pendency of the appeal (Article 295 LPL).
With respect to the resumption of perception, it is still officially in cases of punishment at the request of the interested party in the rest. However, the resumption of perception necessarily involves registration as unemployed and, following the reform of RDL 5/2002, the signing of an activity commitment.
The grounds for termination of the provision remain unchanged, being basically the following:
- Expiry of the period of delivery.
- Rejection of an offer of suitable employment or refusal to participate in social collaboration work, employment programs, or promotion, training, and retraining, except for just cause.
- Imposition of a penalty of extinction.
- Performance of work lasting no more than 12 months.
- Reaching retirement age.
- Transition to retirement or permanent disability, in the degree of permanent total incapacity for the usual occupation, permanent total incapacity for any work, or severe disability.
- Change of residence abroad.
- Voluntary renunciation of the right.
The General Law of Social Security considers “appropriate placement” that which corresponds to the worker’s usual occupation or any other, in accordance with their physical and educational qualifications, involving a salary equivalent to that established in the sector in which the job is offered, regardless of the amount of benefit to which they are entitled, and does not involve a change of habitual residence, unless they have appropriate accommodation possibilities in the new place of employment.
In any case, proper placement means the activity coincides with the last work performed.
Unemployment Allowance (Welfare Level)
Beneficiaries are unemployed individuals who, having registered as job seekers for a period of 1 month, have not rejected any offer of suitable employment or refused to participate in promotion, training, or retraining, and lack income of any kind above, calculated monthly, 75% of the SMI, excluding the proportional part of two months’ pay, and are in one of the following situations:
- Have exhausted unemployment benefits and have family responsibilities.
- Have exhausted unemployment benefits of at least 360 days, lack family responsibilities, and are over 45 years of age at the time of exhaustion.
- Are Spanish-working immigrants who, having returned from countries outside the European Economic Area, or where there is no agreement on unemployment benefits, can prove they have worked at least twelve months in the last six years in these countries since their last departure from Spain and are not entitled to unemployment benefits.
- Have been released from prison and have no right to unemployment benefits, provided that the deprivation of liberty has been more than six months.
- Have been declared fully incapable or disabled to the degree of permanent partial disability for the usual occupation as a result of a record review due to an improvement in their disability status in the degree of permanent total incapacity for the usual occupation, permanent total incapacity for any work, or severe disability.
- Are unemployed persons who, meeting the requirements referred to in paragraph a) above, except for the waiting period, are legally unemployed and not entitled to contributory benefits for not having completed the minimum contribution period, provided that they:
- Have paid at least three months and have family responsibilities.
- Have contributed at least six months but have no family responsibilities.
- Are workers over 52 years of age, even if they have no family responsibilities, who are in one of the situations described in the preceding paragraphs, have contributed to unemployment for at least six years during their working lives, and can prove that, at the time of application, they meet all requirements except age, to access any contributory retirement pension in the social security system.
- Are unemployed individuals over 45 years of age at the time they have exhausted their entitlement to unemployment benefits of 720 days, who meet all the requirements of Article 215.1.1, except for the waiting period, will be entitled to a special allowance prior to the application for unemployment benefits provided for in paragraphs a) and b), provided that they have not been entitled to a new contributory benefit or were not entitled to the subsidy provided for in the preceding paragraph.
Duration
The general rule is that the duration of the grant is six months, renewable up to eighteen. However, there are exceptions in extending the maximum and where it is possible to extend the grant beyond the initial six months (Article 216).
The amount is 75% of the SMI, excluding the proportional part of the two bonuses. In the event of unemployment due to loss of part-time work, the amount will be proportional to the hours worked (with exceptions).
Incompatibilities and Subsidy Provision
The provision and unemployment benefits are incompatible with the operation of self-employment or self-employment, except when it is done part-time. They are also incompatible with obtaining pensions or economic benefits of a Social Security nature, except that they would be consistent with the work that led to the provision.
Exceptionally, if the employment promotion programs are aimed at groups with greater difficulty entering the labor market, the perception of unemployment benefits can be compatible with pending receipt of paid employment, in which case the managing body may pay the employee the monthly amount of benefits in the amount and duration to be determined, without including Social Security contributions.
In this case, during the perception of benefits, employers must pay workers the difference between the benefit or unemployment benefit and the salary allotted to them, also being responsible for Social Security contributions for the total wage indicated, including the amount of the benefit or allowance.
To promote employment and geographical mobility, the managing body shall pay the amount of one month’s duration of unemployment benefits or three months of unemployment benefits, pending charge, to the beneficiaries of these to fill a job that entails a change of place of residence.
All these measures have been introduced in the reform of RDL 5/2002.
The Agreement and Proper Placement
As noted above, the reform includes an obligation on the worker in the signing of an activity commitment, and the obligation to actively seek employment, participate in actions to improve employability to be determined by the public employment service, where appropriate, within a route to employment.
The commitment includes active job search activity, accepting a good fit, participating in specific activities of motivation, information, guidance, training, retraining, or professional insertion to enhance their employability, and meeting the other obligations contained in the LGSS.
Proper placement is considered the profession demanded by the worker and one that corresponds to their usual occupation, or any others that fit their skills and physical and educational qualifications. In any case, proper placement means the activity coincides with the last work performed.
After a year of continuous receipt of benefits, in addition to the above professions, alternative placements deemed by the public employment service that can be performed by the worker may also be considered suitable. The salary for the position cannot be less, in any case, than the SMI, deducting travel expenses.
Amount (Newly Introduced by Decree-Law 3/2004 of June 25)
The amount of unemployment benefit will be equal to 80 percent of the monthly IPREM in effect at the time.
In the event of unemployment due to loss of part-time work, the amount shall be levied in proportion to the hours previously worked.
Nevertheless, the amount of the grant for those over 45 years of age will be determined on the basis of the family responsibilities of workers and according to the following percentages of the monthly IPREM in effect at the time:
- a) 80 percent when the worker has no family or dependents.
- b) 107 percent when the worker has two dependents.
- c) 133 percent when the worker has three or more dependents.