A new proposal has been put forward by the Government on the contribution system for self-employed, based on real income. Jose Luis Escriva is the Minister of Social Security. He is trying to reach an agreement with social agents in a situation that is unlikely to be easy. The CEOE is against it, and there is only a month before the deadline with Brussels for the CEOE to have created the new model and receive a new installment from European funds.
The vast majority of self-employed people, approximately 2.2 million, will pay a lower fee. Just over 750,000 who earn more than 1,700 euro per month will see a significant increase in their monthly contribution. However, only 36% to 87% of those with net incomes of more than 1,700 will see a substantial increase in their monthly payment. The rest of them, around 236,000, will continue to pay 294 euros per mois, the current minimum fee.
The draft, which this newspaper was able to access, will likely undergo modifications as it still needs to be approved by the main organizations. The new quotas will range from 250 to 550 euros for self-employed based upon thirteen sections that are based net returns (income less deductible expenses).
The minimum fee for the new system is 250 euros for self-employed people earning less than 670 euro per month. This will result in a savings of 44 euros per calendar month and 528 euros annually. This is where the majority of the group is concentrated: it employs more than 1.3million people.
The second section applies to those earning between 670 and 930 euros. This is roughly 220,000 people who have to pay a contribution in the amount of 260 Euros. The quota increases to 270 euro for those who earn between 900-1,125 euros per month. This is for people who earn less than the minimum wage, which is just over 351 000 people.
The monthly fee for Social Security will be 290 euros for people earning between 1,125 to 1,300 euros (about 312,000). However, the current 294 euro fee is paid by those with incomes between 1,300 and 1,700 Euros, which is more than 236,000.
The quotas increase in importance and exponentially from here. It increases to 400 euro for those earning between 1,701 to 1,900 euros, to 440 euros per month for those earning between 1,901 to 2,330 euros per lună; to 460 Euros for those entering between 2,330 to 2,760 euros and to 480 Euros for those placed between 2,760 to 3,190 euros.
The fee rises to 500 euros from this amount, and even to 520 euros for people with incomes between 3,620 to 4,050 euros. The 236,000 self-employed workers earning more than 4,050 euro will have to pay a contribution in excess of 550 euros. This is almost twice the amount as currently.
Escriva’s latest concession is already included in the new proposal: only agree on the quotas over the next three years, and not with a nine-year horizon as he originally wanted. However, it is still possible to negotiate if these amounts will be applied from 2023 or gradually increased to become effective in 2025.
ATA, the majority organization of self-employed, has already said “no” to the proposal that “would involve raising prices disproportionately with falling prices, between 33%-90% for 800,000. and 15% for 1.2million self-employed. It is therefore unlikely that an agreement will be reached.
