The Ministry of Labor, led by Yolanda Díaz, along with the Ministry of Economy, implemented an increase in unemployment subsidies. The change was carefully weighed because a too-generous rise could reduce the incentive for beneficiaries to engage with the Public Employment Service. The Ministry of Economy explained that the new subsidy model aligns with European Union guidelines and aims to actively drive job search among beneficiaries.
The agreement represents a practical resolution to a debated issue. The Ministry of Labor yielded to some extent to the Economy’s demands, adjusting unemployment benefits in line with Brussels policies. These non-contributory benefits remain essential for those who have exhausted their contributions and are still receiving support, counting roughly 900,000 individuals. The goal was to launch 2024 with a refreshed system, with Díaz suggesting that the measure receive approval from the Council of Ministers before year’s end.
“This Government expands workers’ rights. We are the government of beneficial policies,” stated Yolanda Díaz after a Council of Ministers meeting. The agreement between the Ministries of Economy and Labor centered on raising the final subsidy amount, previously set at 480 euros per month. The calculation references 80 percent of the IPREM, and the adjustments push benefits higher in the initial months while the minimum eligibility age for support was revised.
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New unemployment benefit plans foresee a rise in benefits from 480 to 570 euros in the first six months. This system will take effect on January 1, 2024, with the following structure for benefit collection:
- From 0 to 6 months: 570 euros or 95 percent of IPREM
- From 6 to 12 months: 540 euros or 90 percent of IPREM
- From 12 months: 480 euros or 80 percent of IPREM
The aim is to reach more people and keep beneficiaries actively seeking employment. A major EU objective is to promote an active working life, and this reform is designed to prevent recipients from settling in and ceasing to look for work.
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Another key change is the lower age threshold for applying for support, opening eligibility to a broader group of applicants, potentially including more than 400,000 new entrants. The subsidy will also allow income earned from work for up to six months to be combined with the subsidy, aiding a smoother transition back into the labor market.
Subsidy reform will include control measures to minimize fraud. Regular checks will verify that beneficiaries continue to meet the eligibility criteria, and there will be an obligation to file an annual income tax return, similar to practices under other existing social programs. Income documentation will be required to ensure proper qualification and ongoing eligibility.
While some specifics remain to be defined, the agreement between the Economy and Labor ministries marks a meaningful step forward for workers. Core aspects such as scope, amount, duration, and alignment with employment goals have been strengthened, contributing to the personal and professional development of all affected individuals.