Who is right in the debate over unemployment benefits reform?

Will the reform cut unemployment benefits?

No, in general. It was just the opposite before. The reform increases the amount of aid and expands the group of beneficiaries; so much so that some experts associated with Fedea estimate that the reform will cost 2.5 billion euros a year (a figure considered excessive by the Ministry of Labor).

On the one hand, the reform expands the scope of the right to subsidies for the unemployed Under 45 years of age, without family responsibilities already agricultural workers Unlike those in Andalusia or Extremadura (which already have access to subsidies). Those who prove that their contribution period is shorter six month even if they lack family responsibilities. In total, it is estimated that the reform will expand the group of possible beneficiaries by approximately 400,000 people.

Also reform increases the amount of subsidy. So far the amount of the subsidy over the entire period (usually 30 months) has been equivalent to: 80% of IPREM (Very Effective Public Income Indicator). This 80% of IPREM is currently equivalent to 480 Euros. The reform improves the initial amount of aid, gradually reducing it:

• In the first semester: 570 Euros or 95% of IPREM

• From month 6 to month 12: 540 Euro or 90% of IPREM

• From the 12th month: 480 Euro or 80% of IPREM

(IPREM is a reference that the Government reviews periodically and is likely to revalue by 2024, which will increase the amount of benefits).

Moreover, the reform proposed by the Labor Party includes another measure in favor of the unemployed; eliminates months of waiting The period between the expiry of the contribution and the collection of the subsidy, which deprives the unemployed of access to resources for 30 days.

So why is Podemos talking about cuts?

Actually, The reform involves cuts in one respect. Currently, the State contributes to Social Security for people over 52 with a subsidy of 125% of the minimum contribution base (determined each year by the inter-occupational minimum wage (SMI). With the reform, this rate will gradually decrease to 100 percent in 2028. Contributing on a higher or lower basis is important in determining what will happen. Pension amount at the time of retirement. This is what Podemos condemns and is the main reason why they claim to reject the Government decree.

Why did the government decide on this cut?

The government aimed to eliminate this deduction by reducing the social security premium base of subsidy recipients from 125% to 100%. Minimum interest that an unemployed person over 52 years of age may have in accepting a job It is paid by the minimum interprofessional wage (for which contributions are made on a lower basis: 100% of the minimum base).

The Government further argues that: Following the more than 45% increase experienced by SMI In recent years, it no longer makes sense to quote 125% more than the minimum base.

What solution will the unions propose on Monday?

Leaders of CCOO and UGT, Unai Sordo And Pepe Alvarez, They recognize that reducing the contribution base from 125% of SMI to 100% is a cut. people over 52 years old people receiving subsidies.

However, they also admit that can be a deterrent Accepting a job that offers minimum wage if the unemployed person understands that he or she will receive a higher State-paid Social Security contribution by remaining unemployed.

Here’s the solution they will propose to Vice President Yolanda Díaz on Monday: Maintaining 125% overpricing. For long-term unemployed people over 52 years of age. But jobs that pay the equivalent of the minimum interprofessional wage also contribute 125% of the minimum base. In the solution proposed by the unions, The businessman will contribute over 100 percent eat contribution baseThe remaining 25% will be completed by the state. with public money.

From the unions’ point of view, spending public money this plugin will be more than compensated by the contribution savings on subsidies This will allow the unemployed to become more involved in the labor market.

What will happen now?

In practice, the overturning of Royal Decree 7/2023 by Congress does not affect the long-term unemployed for now, as the new subsidy will not come into force until June 1, 2024. Therefore, it is time to discuss and implement a new decree.

However, the rule repealed by Congress caused a setback to other issues that took effect on January 1.

Therefore, failure to approve the decree undermines the new breastfeeding leave regulation, which in practice allows workers with newborn children to intensify their existing one-hour daily leave and thus gain access to breastfeeding leave.take up to 28 consecutive days of paid leave. Or in two fractions of 14 days, or according to “all possibilities of enjoyment.”

The subsidy is also reduced in compatibility with any payments related to attending courses or completing internships undertaken by the beneficiary or any member of the family unit. Likewise, for the implementation of the sanction of not reporting the aid reduction (with the amendment, it is possible that the aid will be suspended for 3 or 6 months in the first or second violation and will not be lost until the third. Since it was regulated before it entered into force, it is directly eliminated from the first violation). Improvements in the management of unemployment capitalization have also diminished.