New reform for the self-employed

How settled Lorenzo lovePresident of AT A on his Twitter account of currently 3,269,250 registered self-employed, 52% (1,698,930) contributes to the minimum base of €944.40/month for paying a monthly social security contribution of €286, 48% (1,570,320) are quoted for a base higher than the minimum and 1 million of the self-employed contribute for a tax base of more than €1,500/month. However, it must be said that the percentages given by Lorenzo Amor are far from the estimates of other sources, which put the number of self-employed under 47 years of age contributing to the minimum base at 85-90%.

So far, every self-employed person under the age of 47 has been able to freely choose their contribution basis, regardless of their actual income. Well, the so-called “Recovery, Transformation and Resilience Plan for the Spanish Economy” presented yesterday by the President, Pedro Sanchezis considering a new reform for the self-employed, which appears to limit this freedom of choice in tax bases and aligns the self-employed’ contributions with real income.

This change has already been discussed before by the representatives of the self-employed group, with the approval of associations such as UPTA or UATAE, but now clashes with ATA, which understands that it is not the best time to tackle the reform or price increases of any kind. Although insured by social security that the application of the proposal will be gradual, the self-employed of ATA reply that given the current crisis, any increase is prohibitive.

The Minister for Social Security, Jose Luis Escriva However, he claims that many more self-employed people would benefit from a reduction in quotas than those who would be harmed by an increase. Anyway, this contribution reform that would affect the future of self-employed pensions is an issue that includes that Toledo Pactwhose commission has not yet made a specific recommendation to the nation’s government.

Why do freelancers pay more?

Although José Luis Escrivá insists on remembering that more contributions mean higher benefits and a better pension, the truth is that so far a large proportion of the self-employed who have taken advantage of this freedom of choice have opted for the minimum payment. The reason given is that they always pay more than they receive without their rights ever being equal to those of a General Scheme worker. Accordingly, those who are doing well prefer to use alternative products that secure their pension, such as a pension plan, rather than increase their social security contributions.

Another reason some put forward is that few self-employed would benefit from the decline. Many doubt that such a high percentage of freelancers actually charge that €944.4 per month (of which their share of €286.1 is deductible) because their economy would be unsustainable. The implication of this vision is that the increase would affect more self-employed people than are generally considered.

We’ll have to wait to find out, as the concrete numbers of the reform have not yet been outlined. Details are still to be clarified, e.g. B. Knowing what is meant by real income in order to determine the appropriate ratio – invoicing or net income; Who is affected by the measure, taking into account that the applicable law prohibits changing the contribution basis from the age of 47; to know whether the entitlements received would be proportional to the contribution bases or whether the reform would affect, among other things, the beneficiaries of incentives for new self-employment. In short, it is necessary to know exactly who will benefit from the reform and who will be harmed.