You may also consult the Processes and Procedures section for a simplified version
What is the severance benefit for self-employed workers?
In accordance with the revised text of the General Social Security Act, self-employed workers have a specific system for protection in the event of cessation of activity, which is compulsory and is intended to provide self-employed workers, affiliated to the Social Security and registered in the Special Scheme for Self-Employed Workers or in the Special Scheme for Sea Workers, with the benefits and measures established in this law in the event of total cessation of the activity that led to registration in the special scheme, despite being able and wishing to carry out an economic or professional activity for profit.
The cessation of activity may be permanent or temporary.
The temporary cessation may be total, which entails the interruption of all activities that may lead to registration in the special scheme in which the self-employed worker is included, in the cases regulated in Article 331, or partial, when there is a reduction in activity under the terms provided for in this law.
This protection includes:
- the payment of a monthly severance benefit,
- and social security contributions for common contingencies, with particularities in certain cases.
What requirements must be fulfilled to access the severance benefit?
You must be a self-employed worker included in the Special Scheme for Self-employed Workers (RETA), including workers in the Special Scheme for Self-employed Agricultural Workers (SETA), who start the contribution for termination of activity from 1 January 2012 and to economically-dependent self-employed workers (TRADE), or else be a Self-employed Worker included in the Special Scheme for Sea Workers, and must also:
- Be affiliated and registered with the Social Security.
- Have a minimum contribution period for cessation of activity of 12 months in the 24 months immediately prior to the legal situation of cessation of activity.
- Provide evidence of the legal status of cessation of activity.
- Have applied for withdrawal from the REM due to cessation of activity, except when the legal situation of cessation of activity is determined by the causes provided for in sections 4 and 5 of article 331.1.a) of the revised text of the General Social Security Act (TRLGSS), and due to temporary force majeure provided for in article 331.1.b) of the aforementioned revised text.
- Subscribe to the activity commitment and provide evidence of active availability for reincorporation into the labour market through training activities, professional guidance and promotion of entrepreneurial activity to which the public employment service of the corresponding autonomous community or, where appropriate, the Social Marine Institute may call you. It will not be necessary to sign the activity commitment when the cessation of activity is determined by the cause set out in sections 4 and 5 of article 331.1.a) of the TRLGSS, nor when the cessation of activity is temporary due to force majeure.
- In the event of permanent cessation, be under the ordinary retirement age, unless there is no proof of the contribution period required for this.
- Be up to date with Social Security contribution payments.
- None of the incompatibilities provided for in the revised text of the General Social Security Act should apply.
- When the self-employed sea worker has one or more dependent workers, compliance with the guarantees, obligations and procedures governed by labour legislation shall be a prerequisite for the cessation of activity.
- In order to be entitled to the severance benefit provided for in Article 331.1.a) 4 and 5, the self-employed worker may not carry out another activity unless he or she undertake multiple activities, at the time of the event giving rise to the severance benefit, in which case it will be compatible with the employed work that he or she had been carrying out, provided that the sum of the average monthly remuneration for the four months immediately prior to the entitlement and the severance benefit results in an average monthly amount that is less than the amount of the minimum interprofessional wage in force at the time the entitlement arises, excluding the proportional part of the extra payments.
Where should the application be submitted and what is the deadline?
The severance benefit application should be submitted to the Mutual Society which covers the worker's professional contingencies or to the Public State Employment Service if they are covered by the INSS or to the Social Marine Institute if this is the entity that covers such professional contingencies.
The application can be submitted up to the last day of the month following the month in which the activity terminated. If the application is submitted after the deadline has passed, and provided that the self-employed worker complies with the other legally stipulated requirements, the days between the date on which the application should have been submitted and the date on which it was submitted shall be deducted from the period of receipt of the benefit.
The managing body will pay the social security contributions due during the period of receipt of the benefit, provided that the application has been made within the stipulated period. Otherwise, the managing body shall take over from the first day of the month following the month in which the application was made.
The application must be accompanied by the necessary supporting documentation.
Duration of benefit payments
Generally, the period of enjoyment of the benefit will be calculated according to age and the worker´s contribution periods over the 48 months prior to acquiring legally out-of-work status, as shown in the following table:
|Months in which contributions were paid
|From 12 to 17 months
|From 18 to 23 months
|From 24 to 29 months
|From 30 to 35 months
|From 36 to 42 months
|From 43 to 47 months
|With 48 months
Amount of benefit payments
The amount of benefits paid will be 70% of the base pension, which is calculated on the basis of the worker’s average income contributions during the 12 months prior to becoming legally unemployed. For cessations under sections 4 and 5 of article 331.1.a) of the TRLGSS and cessations due to partial temporary force majeure, 50% of the regulatory base will be applied.
The maximum amount will be 175% of the Public Indicator of Multiple Effect Income (IPREM), except in the case that the worker has one or more children in their care, in which case the amount will be either 200% or 225% respectively of the aforementioned indicator.
The minimum amount will vary from between 107% to 80%, depending on whether or not the self-employed worker has children in his care.
The minimum amount will not be applicable to those self-employed workers that contribute for a base pension below the minimum.
The maximum and minimum ceilings shall not apply for cessations under sections 4 and 5 of article 331.1.a) of the TRLGSS and cessations due to partial temporary force majeure.
For the purposes of the maximum and minimum amounts of the severance benefit, the monthly IPREM in force at the time when the entitlement begins shall be taken into account, increased by one-sixth.
The Managing Body will pay the Social Security contributions for common contingencies, which will include temporary incapacity and will be made for the same periods of receipt of the benefit, except for cessations under headings 4 and 5 of article 331.1.a) of the TRLGSS, in which the managing body will pay 50% of this contribution, and will pay it to the self-employed worker, and the other 50% will be paid by the self-employed worker, who will be responsible for paying all the Social Security contributions. When gender violence is a determining factor in the temporary or permanent cessation of the activity, during the first six months there is no obligation to pay contributions, but they will be considered effective for the purposes of Social Security benefits and from the seventh month onwards contributions will start to be paid.
Management of benefit payments
Benefit payments will be managed by the Mutual Society which covers the worker’s professional contingencies, or by the Social Marine Institute if it is the entity that covers the aforementioned professional contingencies.
If the application is submitted on time, the worker will begin to receive the benefit, in the cases provided for in Article 331.1.a), on the day following that on which the termination of their membership of the special scheme to which they were assigned takes effect.
However, in cases of cessation of activity as provided for in Article 331.1.a).4, given that the corresponding Social Security scheme does not require deregistration, entitlement to the benefit shall commence on the first day of the month following notification to the labour authorities of the company's decision to reduce the working day by 60% for all the company's employees or to temporarily suspend the employment contracts of 60% of the company's workforce.
Similarly, in the cases referred to in Article 331(1)(a)(5), as no deregistration from the corresponding special scheme takes place, entitlement to the benefit shall commence on the first day of the month following the month in which the application was made.
In cases of total or partial temporary suspension of activity as a result of force majeure as provided for in Article 331.1.b), entitlement shall arise on the day on which the occurrence of the force majeure is proven by means of the appropriate documents, and it shall not be necessary to deregister from the corresponding special scheme.
In the other cases regulated in Article 331, entitlement shall arise on the first day of the month following the month in which the suspension takes effect as a result of the cessation of the activity.
Requirements for self-employed workers:
- Undertake to pay contributions corresponding to unemployment benefit.
- Apply to the Mutual collaborating with Social Security or the Managing Body to which they pay severance protection cover.
- Provide the documentation and information necessary for the recognition, suspension, termination or resumption of the benefit.
- Not work as an employee or self employed worker while receiving the benefit, except for terminations under sections 4 and 5 of article 331.1.a) of the TRLGSS and termination due to partial temporary force majeure, which are compatible with the activity causing the termination, provided that the net monthly income while receiving the benefit does not exceed the amount of the minimum interprofessional wage in force at the time of entitlement, excluding the proportional part of the special payments, or the amount of the base for which contributions were paid, if this is lower.
If, at the time of the event giving rise to the severance benefit, you are an employee, this will be compatible as long as the sum of the average monthly remuneration for the 4 months prior to the entitlement and the benefit results in an average monthly amount lower than the amount of the minimum interprofessional wage in force at the time the entitlement arose, excluding the proportional part of the extra payments.
- Sign off from the benefit in the event that the benefits are suspended or expire, or the worker no longer meets the entitlement requirements.
- Sign and comply with the requirements of the activity commitment, except for terminations under sections 4 and 5 of article 331.1.a) of the TRLGSS and terminations due to temporary force majeure.
- Repay any unduly received benefit payments.
- Appear at the request of the managing body.
- Be at the disposal of the Public Employment Service of the corresponding Autonomous Community, or of the Social Marine Institute, where applicable, in order to carry out the training, professional guidance and entrepreneurial activity promotion activities to which they are called.
- Participate in specific motivation, information, guidance, training, retraining, or professional insertion activities to increase their employability, which are determined by the Public Employment Service of the corresponding Autonomous Community, or by the Social Marine Institute, where applicable.
Suspension and expiry of benefit payments
The benefit will be suspended if a sanction for a minor or serious offence is imposed, for serving a custodial sentence, for being self-employed or working for others for a period of less than 12 months, except in the cases of cessation of activity provided for in sections 4 and 5 of Article 331.1.a), or partial temporary cessation of activity due to force majeure, which will be compatible with the activity causing the cessation, under the terms provided for in Article 342.1, and for moving abroad for a continuous period of less than 12 months to seek or perform work or professional development or international cooperation, and for occasional trips abroad for no more than 30 calendar days once a year, provided they have been previously reported to and authorised by the managing body.
Benefit payments will expire at the end of the stipulated period for their payment, as well as in the event of a worker undertaking employed or self-employed work for 12 months or more, incurring a sanction or any of other the reasons listed in the revised text of the General Social Security Act.