
FAQ on extraordinary economic measures by Covid-19
Since the state of alarm was decreed in Spain, the Central Government has been adopting different urgent and extraordinary measures aimed at alleviating the economic impact of the Covid-19 health crisis. Euriux Lawyers which celebrates 25 years as the largest group of lawyers in Spain, makes you a compilation of the different economic measures aimed at companies, SMEs and freelancers.
Activity-cessation allowance
It is known as the unemployment of the self-employed. The Royal Decree-Law of 17 March establishes the procedures to be followed. Self-employed workers whose activity has been suspended or whose turnover has been reduced by 75% as a result of the pandemic can apply for it. To do so, they must be up to date with their Social Security payments and have been registered in the Special Regime for Self-Employed Workers (RETA) on 14 March.
ICO Credits
From 6 April, banks started to grant state-backed loans through the Instituto de Crédito Oficial (ICO) to self-employed and SMEs affected by the Covid-19 crisis in need of liquidity (although it can be applied retroactively to loans applied for since 18 March).
Mortgage payment moratorium
Small entrepreneurs and the self-employed who have no activity as a result of the state of alarm or who have suffered significant losses may opt to stop paying the mortgage payment on their premises or office for three months, a period that may be extended by agreement of the Council of Ministers. If the requirements are met, which include having seen their turnover fall by at least 40%, those affected should contact their bank to request the application of this measure due to the Covid-19 crisis.
Tax arrears
One of the latest decisions taken by the Government has been the one-month moratorium granted to companies and the self-employed for the payment of taxes (VAT, personal income tax and corporate tax instalments). Thus, they will be able to file their tax returns until 20 May, instead of doing so by the deadline, which ended on 20 April, and until 15 May in the case of direct debits, which expired on Wednesday 15 April.
ERTE and bonuses
The coronavirus crisis has led thousands of companies to apply a Temporary Layoff Plan (ERTE) to their workforce. Estimates suggest that there are already more than 3.5 million workers affected by this alternative promoted by the government, which seeks at all costs to maintain employment. All affected workers can receive unemployment benefits, even if they have not paid the 360 days of contributions that are generally required to be eligible for this benefit. During the first six months the worker will receive an amount of 70% of the regulatory base and 50% thereafter.
Sick leave due to incapacity for work
Self-employed persons who have been infected or who have been forced to remain in quarantine due to contact with infected persons may apply for medical leave. Royal Decree Law 6/2020 of 10 March states that, as an exceptional measure, they may receive the benefit that corresponds to an accident at work.
Pension plan redemption
During the six months following the declaration of the state of alarm, the self-employed who have ceased their activity and the owners of establishments whose opening to the public has been suspended due to Covid-19 and who are participants in pension plans, "may, exceptionally, make their consolidated rights effective", according to the BOE of 31 March.
Social voucher and supplies
An extension has been decreed until September of the social voucher for those affected by the coronavirus crisis, while a moratorium is guaranteed for the payment of supplies such as water and electricity for vulnerable groups.
Rental Subsidies
It articulates rental subsidies, suspends evictions for six months and contracts will be automatically renewed for half a year if they expire now. Vulnerable tenants (the unemployed, those affected by an ERTE or the self-employed) will be eligible for zero-interest microcredits to be repaid in up to 10 years, and the state will assume the debt if vulnerability is maintained.
Farmers
The unemployed, workers with agricultural subsidy, agricultural income or unemployment benefit will be able to work in the countryside without losing their unemployment benefit.
Unemployment
During the alarm period, delay in claiming unemployment benefit or resumption "shall not reduce the duration of entitlement to benefit".
Domestic Workers
The Government has approved in the Council of Ministers extraordinary subsidies of 440 euros for temporary workers who were not entitled to unemployment; and for domestic workers of 70% of their contribution base, without this being incompatible with other jobs.