A Turning Point in Self-Employed Contributions: Reform Path Forward

No time to read?
Get a summary

the royal decree regulating the reform of the self-employed contribution system moved forward at the Congress of Deputies this Thursday, advancing as a bill at the request of several parliamentary groups. it is described as a “starting point” that can and should be developed further.

the reform, which marks the first step toward basing contributions on actual income for the self-employed, was approved by 260 votes in favor (representing PSOE,PP, United We Can, PNV and PdeCAT); 66 against (VOX and Ciudadanos) and 25 abstentions (ERC, Bildu, BNG). its processing as a bill received almost unanimous support, with only one vote against out of 349.

the Minister of Inclusion and Social Security, José Luis Escrivá, argued that the self-employment reform would enhance the fairness, flexibility and sustainability of the system. he noted that it would extend social security protections to the self-employed group.

in his remarks to Congress, Escrivá recalled that the reform responds to the mandate of the Toledo Pact from 2020, results from an agreement with social representatives, and meets one of the milestones of the recovery plan.

“a turning point”

the minister affirmed that the reform would represent a “turning point” for the self-employed, who have long faced an abnormal situation in the European context due to a disconnect between income and contributions.

regarding the new contribution quotas, he stated that contributions would be “significantly reduced” for self-employed individuals whose net income falls below the minimum interprofessional salary (smi), and would be “similar or lower” for those earning up to the smi threshold of 1,700 euros.

escrivá highlighted that the new system is “much more” than a set of new bands, arguing that it constitutes a structural reform in the relationship between the self-employed and social security.

as announced earlier by the PP, the party voted in favor of the initiative, though its deputy, Tomás Cabezón, urged that the measure be processed as a bill, viewing the royal decree as a starting point that could incorporate improvements.

this stance echoed concerns raised by MPs such as PNV’s Íñigo Barandarián, who urged the government to use the royal decree mechanism only for the last time, given doubts about its impact on the content.

nevertheless, Barandarián declared support, calling it a “good deal” that adheres to the Toledo Pact recommendations and seeks to bring self-employed contributions closer to actual income.

PSOE calls this “historical justification”

not surprisingly, the coalition government partners PSOE and United We Can backed the reform. socialist MP María Mercè Perea framed it as a “historical claim,” while UP spokesperson Isabel Franco described the law as one that makes important progress for the group and ends an ineffective and discriminatory system [citation].

Bildu chose abstention, and its deputy Oskar Matute explained that although the reform improves some conditions for the group, it does not fully resolve underlying problems, calling it a partial solution [citation].

“inadequate” for CKD

ERC representative Joan Capdevila pointed to perceived inadequacies in the proposal and highlighted problematic scenarios, such as self-employed farmers with the lowest pensions or disabled self-employed workers, urging careful consideration of these impacts [citation].

only Ciudadanos and Vox voted against the reform. the Vox party member María Inés Cañizares argued that the new contribution system centers on three axes: alleged deception, higher collections and restrictions on the freedom of the self-employed, including the suppression of voting rights [citation].

No time to read?
Get a summary
Previous Article

ECB Minutes Reveal Tension Behind July Rate Move

Next Article

Omoda C5 Debuts with Rich Interior and Tech Suite