How much unemployment benefit are self-employed workers entitled to?

The cessation of activity benefit (prestación por cese de actividad), or unemployment benefit for the self-employed (paro del autónomo), is an unemployment benefit for self-employed workers

.

Find out what this coverage involves, the requirements you must meet to qualify for it, its duration and amount, and the grounds on which a cessation of activity may arise.

REQUIREMENTS FOR APPLYING FOR THE CESSATION OF ACTIVITY BENEFIT

You must have a minimum contribution period of twelve months

To qualify for a cessation of activity benefit, you must have contributed for a minimum of twelve consecutive months without interruption.
The cessation of activity must be preceded by a period of losses, and you must be up to date with your Social Security payments.

This condition extends to any debt, including tax assessments.

You must have recorded a minimum level of losses

To receive the benefit, you must have losses 10% higher than the income received during the last 12 months before submitting the application. For example, if you invoiced €10,000 during your last year as a self-employed worker, you must also have losses of at least €11,000.

It is also possible to qualify for a cessation of activity benefit if you can show that you recorded losses at least 20% higher than your income over two consecutive financial years.

You must close your premises previously open to the public

If you carry on your activity in premises open to the public, you must close them before starting the application, unless you use them for a different activity for which you contributed while active.

If you enter insolvency proceedings, you will be entitled to the benefit

If, owing to your level of losses, you enter insolvency proceedings (concurso de acreedores), you will be entitled to a cessation of activity benefit. In this case, an administrative license under which you carry on your activity must be withdrawn.

In addition, this provision extends to all those who, as a result of judicial or administrative enforcement proceedings, must pay at least 30% of the income generated during the previous year toward debts.

There are circumstantial factors to take into account

A divorce between the members who, as partners, make up a business makes it more likely that a cessation of activity benefit will be obtained. In addition, special coverage is given to all victims of gender-based violence.

You must have been registered with the RETA

To apply for a cessation of activity benefit, you must have been registered with the Special Social Security Scheme for Self-Employed Workers (Régimen Especial de Trabajadores Autónomos, RETA). It will also be essential that, while active, you were covered for occupational contingencies and cessation of activity.

The reason for the cessation must not be voluntary

The reason for the cessation of activity must be substantiated by supporting documents. Among the most common are Personal Income Tax (IRPF) returns from previous years. These will also show whether you meet the requirements regarding the level of losses.

The reason leading you to apply for the cessation of activity benefit must also be proven. It must be economic, technical, productive, or organizational in nature. It will also be essential that it be due to a cause beyond the applicant’s control. Some of the major causes could be the loss of an administrative license, a natural disaster, a divorce, or gender-based violence.

You must sign a reintegration commitment

To complete your benefit application, you must sign an activity commitment (compromiso de actividad) under which you will undertake to carry out training activities with a view to re-entering the labor market.

You must not have reached retirement age

To receive the benefit, you must not have reached the age required to begin the retirement process.

If you have hired workers, you must provide supporting documents

To access unemployment benefit for the self-employed, you must ensure compliance with the labor guarantees, obligations, and provisions established by law. This must be attested by means of a sworn statement.

HOW TO APPLY FOR THIS BENEFIT

The process will be handled  through your mutual insurance company collaborating with Social Security (mutua) or the Spanish Public Employment Service (SEPE). You must complete the Application for Cessation of Activity Benefit and submit it, together with any necessary supporting documentation, to the relevant Provincial Directorate:

FILING DEADLINE

To apply for the benefit, you must have deregistered from the RETA, formalizing your cessation of activity. However, you should be aware that there is a maximum period of 30 days from that point to submit the application.

AMOUNT OF THE BENEFIT

The amount payable is 70% of the benefit calculation base (base reguladora), calculated as the average of the contribution bases on which you contributed during the last 12 months prior to the cessation of activity. In addition, the minimum amount payable will not be less than 80% of the Public Multiple-Effects Income Indicator (Indicador Público de Renta de Efectos Múltiples, IPREM) where the self-employed worker has no dependent children, and will be a maximum of 107% where they do.

If you contributed on a base lower than the minimum, the maximum amount payable will be 175% of the IPREM. If you have one child, the maximum will rise to 200%, and if you have more than one child, the maximum will rise to 225%.

DURATION OF THE CESSATION OF ACTIVITY BENEFIT

The duration of the cessation of activity benefit will vary depending on the contribution periods completed within the 48 months preceding the legal situation of cessation of activity, of which at least 12 must be continuous and immediately prior to that situation of cessation, according to the following scale:

– 12 to 17 months: 4 months
– 18 to 23 months: 6 months
– 24 to 29 months: 8 months
– 30 to 35 months: 10 months
– 36 to 42 months: 12 months
– 43 to 47 months: 16 months
– 48 months or more: 24 months

If you have received a cessation of activity benefit, you are entitled to submit a new application. To do so, at least 18 months must have elapsed since payment of the previous benefit ended.

As you can see, this is a lengthy process in which various factors must be taken into account. Before taking this step, it is advisable to review your situation with a specialized team.