El Paro - Unemployment benefit in Spain
El Paro (unemployment benefit)
In order to claim El Paro (unemployment benefit) in Spain, you must have contributed to the system and the amount that you receive is dependent on various factors. El Paro can be claimed from 4 months up to a maximum of 2 years, depending on the contributions accumulated during the previous 6 years.
- You must have a social security number (número de seguridad social).
- You must have worked for a minimum of 360 days over the last 6 years as part of a contract – The 360 days doesn’t have to be continual or for the same employer.
- You must have lost your job involuntarily – this includes, your contract not being extended, being fired or your hours being reduced by more than a third.
- You must be registered as a job seeker for the entire period in which ‘el paro’ is received.
How to apply for unemployment benefit
To receive El Paro from the first day after your contract ends, 2 registrations must be made within 15 working days of your contract ending.
SEPE or INEM
How much will I receive?
There are several factors that will determine how much unemployment benefit you receive, for example: the number of children per family, whether you have claimed previously and how much you were earning each month whilst employed (taking the average figure from the last 6 months).
Typically, the amount will be 70% of the gross amount of your monthly wage for the first 6 months. After this, the percentage is then reduced to 50% of your monthly wage.
However, there are minimum and maximum amounts that you can claim, for example the maximum amount available in 2021 for people without children is €1,153.33, and the minimum is €527.24.
Please note: The Government will deduct your social security contribution from your unemployment benefits (of course, the amount varies per person). Therefore, whilst receiving unemployment benefit, the worker must remain registered with Social Security and deductions will be made for things such as; Family Protection, Retirement, Permanent Disability, Death and Survival, Temporary Disability, Maternity, Health and Pharmaceutical Assistance.
The amount deducted will be the average of the worker’s contributions for these things in the last six months of employment. However, payment of the business contribution will be made in full by the Spanish Public Employment Service.
DARDO (unemployment card)
In order to maintain job seeker status, it is necessary to renew your unemployment card (DARDO) on the dates indicated.
On the last day of your employment, your employer will ask you to sign a Finiquito. Make sure you check it thoroughly for any errors and ask your employer to explain the calculation before signing it, as once signed, you cannot challenge it.
The Finiquito is a receipt that lists the payments due and their concepts, the sum will have accumulated over the length of your contract but may not have been paid to you by the time the contract ends. Therefore, it serves as acknowledgement of payments that need to be signed by the employee.
Such payments include:
- Whatever salary is due.
- Holidays not enjoyed by the employee.
- Redundancy payment.
The ERTE: What you need to know about losing your job during the COVID-19 Crisis
What is the ERTE?
The ERTE (expediente de regulación temporal de empleo) is the equivalent of a ‘furlough’ scheme which allows companies to issue temporary redundancy to its employees to cushion the impact of COVID-19 on the labour market. The ERTE scheme has now been extended until May 2021.
What are you entitled to?
Under the ERTE scheme, you are still technically employed by the company which will continue to pay your social security contributions but not your salary. Instead, the ERTE enables those who are entitled to it to claim unemployment benefit (El Paro). This will be 70% of your base salary for the first six months, before dropping to 50% for the remaining months.
When the period covered by the ERTE is over, you will then resume your role under the same contract and subject to the same conditions.
How do you get one?
As an employee, you will be told that the scheme is being approved and your company is legally obliged to apply to the Labour Authorities within 5 days. The Labour authorities will then authorise the process and assess whether unemployment benefit is due.