Given the complexity of reform negotiations to ensure that the self-employed contribute according to their income, the Ministry of Security is trying to negotiate with social agents and self-employed groups at least the initial roll-out of the reform for the next three years, and leave it to fully adapt later. The department, headed by José Luis Escrivá, is trying to get a social agreement on new quotas only until 2025, the amounts of which have not yet been closed, and lay the foundations for completing the transition in subsequent years, according to sources from the Negotiations.
Thus, the idea that the ministry had been considering since April, about finalizing the reform only until 2025, and which it explored in the course of bilateral contacts with the parties to the negotiations, prevailed. This Friday, Social Security is back at the table for a formal dialogue that hasn’t met in weeks to formally present the idea and see the possibilities of social agreement.
Three self-employed organizations – UATAE, ATA and UPTA – positively assessed this Friday’s meeting and showed a willingness to reach an agreement, which was not certain until a few weeks ago.
Negotiations to change to an income-based contribution system for the self-employed instead of an elective system such as the current one have been a commitment for many years and a recommendation of the Toledo Pact, but have proven far more complex. than expected. Negotiations have been going on for a year now, with more or less intensity, and until recently the parties were very far apart.
The reform is due to be approved “in the first half of 2022” under a commitment with Brussels, as outlined in the Recovery and Resilience Plan, but the rollout was already envisaged in documents sent to the European Commission as “gradual from that date”.
Challenges: set amounts and legal framework for the future
Finally, it seems that this Friday the idea that the parties have agreed to start a reform to unlock the talks has prevailed. That is, it is a rollout over the first three years, from 2023 to 2025, a period during which the self-employed will already begin to contribute based on income levels. They now contribute to an elective system that forces 85% of the self-employed to contribute to the minimum, which also includes minimum social protection (low, birth permits, pensions).
The first task of the negotiations now is to establish these income groups and their associated quotas until 2025, which have yet to be determined. So far, the idea has persisted to have 13 income categories in which the self-employed can travel up to 6 times a year according to their income projections.
As for the monthly payments in each of these income categories, they are not yet closed, the sources insist in negotiations. During bilateral contacts in recent weeks, sums ranging from 200 to 400 euros per month were discussed, but at this Friday’s meeting, the ministry did not consider them, they indicate from the social dialogue. The highest fees, if the amount of 400 euros per month will flourish, will be reduced compared to some previous offers.
But beyond defining the detailed deployment for the next three years, the next challenge is how to translate into law what happens next. In other words, a full transition of the system to contributions based on the “real income” (or net income) of self-employed workers.
This issue is of fundamental importance to the parties to the negotiations who are most convinced of the contribution according to income, who fear that the reform will not be sufficiently “linked” to the coming years (during which the government may change) and that the legal changes will remain only in part. reform with what has been achieved and explained by 2025. The parties least favorable to this change, the ATA and the association of employers of which it is a part (CEOE), are suspicious of quota increases that apply to people with higher incomes.
After the meeting, ATA and UPTA showed their willingness to negotiate until an agreement was reached without further details, while UATAE stressed that “it is important to make more efforts to reduce the low-pit quota and improve social protection.”
The parties will continue negotiations in the coming days. “At the meeting, it was confirmed that progress had been made since the beginning of the talks and common ground was confirmed. There is a common will to continue working on the agreement,” the Ministry of Social Security emphasizes.
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