As a result of the State of Alarm extension, a new package of economic measures has been launched to help SMEs and Self-employed workers.
The Council of Ministers has approved an array of economic measures aimed at covering groups that had been unprotected from previously approved measures, this is the case for tenants, SMEs, self-employed, and household employees.
We hope that the following information will help Spanish businesses to better understand the new economic measures adopted by the Spanish Government.
Economic Measures for SMEs
Moratorium on the payment of Social Security contributions
In these new economic measures, the Executive has approved a 6-month moratorium on the payment of Social Security contributions for SMEs, which postpones the amount of the contribution payments for April, May and June.
To facilitate carrying out the procedures with Social Security, companies and management agencies are allowed to use the Electronic Data Transmission System (RED).
This is in order to carry out electronically the applications and other procedures corresponding to:
- deferrals in the payment of debts
- moratoriums on the payment of contributions
- refunds of improper payments from Social Security.
It is a way to provide more liquidity to SMEs.
This economic measure will be of great help to SMEs to be able to maintain a short-term treasury and reduce the volume of payments to be made, thus allowing them to meet other essential payments such as salaries to employees or rent.
Flexibility in supply matters
Within these new economic measures, this one allows self-employed workers and companies to temporarily suspend their supply contracts or modify their contract modalities without penalty; it allows them to change the access fee and adjust the contracted voltage up or down, at no cost.
Once the State of Alarm is concluded, a new modification is allowed again without cost or penalty.
Given the current situation, which has led to a significant decrease in activity, it implies that many titleholders have hired a daily supply charge higher than necessary. That is why they are paying tariffs that do not fit their needs, and with this measure, they will be allowed to correct this situation and reduce the burden of fixed costs that they are suffering.
Economic measures for Self-employed workers
Moratorium on the payment of Social Security contributions
Within the new set of economic measures, there is this statute that had been so acclaimed by the self-employed has finally been granted, with which it will be possible to obtain a moratorium of 6 months in the payment of Social Security contributions of self-employed workers, corresponding to the payments of the contributions of May, June and July.
It is also established that self-employed workers who have suspended their activity and started receiving the benefit for cessation of activity and who have not entered on time the social contributions corresponding to the days actually worked in March may pay them outside the deadline without surcharge.
Among these economic measures, to facilitate the carrying out of the procedures with Social Security, companies and management agencies are allowed to use the Electronic Data Transmission System (RED) to handle electronically the applications and other procedures corresponding to the deferrals in the payment of debts, the moratoriums in the payment of contributions and the refunds of improper payments from the Social Security.
So, what does this measure mean? It is a way to provide more liquidity to self-employed workers given that now they can defer debts due in the short term at a time when their income may have been substantially reduced compared to previous months.
These economic measures will be of great help to the self-employed to be able to maintain a short-term treasury and reduce the volume of payments to be made at the end of each month, thus allowing them to meet other essential expenses such as rents and payments to suppliers.
Moratorium on mortgage payments for business premises
Those self-employed workers who have suffered a substantial loss of income or a significant drop in sales will be exempt from paying the mortgage fee to the bank. This is something that had already been approved on March 17th, only for the case of the habitual residence, so the novelty now is that it also applies to mortgages for business premises.
Economic measures for individuals
Zero-interest microloans to pay rent
Those people who are in a vulnerable situation as a result of the current crisis will be able to apply for public zero-interest microloans to their financial institution, which will have a 100% State’s guarantee and can be returned within a period of 6 to 10 years. These credits must have the purpose of paying a maximum of 6 monthly rental payments.
The fact that such loans are 100% guaranteed by the State means that, in the event that the debt cannot be repaid by the individual at the time it is due, the State will assume said debt and there will be no harm to both the individual and the financial institution.
If, once the crisis is over, the situation of vulnerability remains; the State will pay the rental debt through a public aid line that includes aids of up to 900 euros per month and 200 euros for supply or maintenance expenses, with a total amount of up to 700 million euros available to all the country.
Even in the absence of more details, the Government has also specified that the conditions of vulnerability to benefit from this aid are so wide that they will allow a large number of people to benefit, among which it has been mentioned the unemployed people affected by ERTE and by reductions in working hours and self-employed who have seen a reduction in their income.
Whithin these economic measures, this one is also intended to provide coverage to individuals in vulnerable situations who are in a situation of renting habitual residence.
Compared to the previous measure presented in relation to housing payment aids which only covered a moratorium on the payment of mortgage installments, this measure has been extended from one to three months.
Temporary contract employees
An exceptional unemployment benefit is granted for those workers who have a temporary contract of at least 2 months that has been terminated after the entry into force of the State of Alarm (March 14th, 2020), and who also did not have sufficient contributions to access another type of benefit or subsidy.
The beneficiaries of this measure will receive an aid of 80% of the Public Multiple-Effects Income Indicator (IPREM) currently set at 537.84 euros. That means, they will receive 440 euros and their duration will be of one month.
Moratorium on mortgage payments and consumer loans
As mentioned above, people who have lost their jobs or have had their income reduced as a result of the current health crisis, will see the mortgage payment moratorium extended to three months, compared to the one month that was set until now.
Due to these new economic measures, a moratorium on the payment of consumer loans for people in the same situation has also been approved for a period of three months, extendible, by agreement of the Council of Ministers.
This is intended to extend the economic aid to all types of loans that were intended at the time of approving the moratorium on mortgage payments.
Finally, the savings accumulated in their pension plans will be available to:
- those who have recently lost their jobs
- those affected by an ERTE
- self-employed workers who are in the situation of cessation of activity.
Protection for the most vulnerable; social bonus for electricity and evictions
Although the previous article talked about the extension of the social electricity bonus; now it has been decided to expand the group of potential recipients of the social electricity bonus.
Those who may be able to access to this, on an exceptional and temporary basis, are:
- individuals, in their habitual residence, with the right to contract the Voluntary Price for the Small Consumer (PVPC)
- those who have an income equal to or less than certain thresholds referenced in the Public Multiple-Effect Income Indicator (IPREM)
- those who prove that they have ceased their professional activity as self-employed workers
- or those who have seen their revenues reduced by 75% on average compared to the previous semester.
Given the current situation of confinement and movement restriction, it brings with it the uninterrupted stay at home and the consequent increase in electricity consumption in each household.
It is also forbidden to evict tenants for up to six months after the State of Alarm. This measure will be subject to certain conditions. Among others, it will apply to those cases where there is no “housing alternative”.
All rental contracts that will expire during this confinement period will also be automatically extended for a period of six months. The goal is that no one suffers increases in the cost of rent.
Subsidy for household employees
In this new set of economic measures, the domestic employees registered in Social Security before the declaration of the State of Alarm, and who have stopped providing services in one or more houses (totally or partially) will have a benefit comparable to the unemployment benefit (Paro). The aid will amount to 70% of the regulatory basis, once the dismissal or discharge from Social Security is accredited.
In conclusion
As it has already been announced in recent weeks, the Government is working to keep protecting the general public as a whole. That is why we hope that the new economic measures / term extensions of the current ones will continue to come out.
We hope that this content had been useful for all those affected by this situation, and that you will be able to benefit as much as possible from the available economic measures.
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