Coronavirus in Spain, fines, unemployment benefit and more.
“May you live in Interesting times”.
I would love to be living in very uninteresting times just now, but as you are aware, that is not the way things are!
Spain has been hit pretty bad by the virus. According to the official reports Spain is flattening the curve. Because of the welcome news that deaths and new infections are falling here, the government is working out how to gradually ease the lockdown.
We’ve been closed since before St. Patrick’s day, and the initial shutdown has been extended to April 25th.
The government is looking into increased testing, gradual return to work and isolation for those in danger. The possibility of face masks being compulsory in public for at least a number of weeks is very real. It is not ideal, but what really matters is that along the Orihuela Costa, where we are based, people are generally safe.
For the next week or two, we are operating on very limited resources. The courts are largely closed, most new build developments are temporarily shut, the town hall is closed, and there is not all that much actual helping of clients we can do.
That said, many autonomo or self employed people are still working. This means that our clients, existing and potential ones, have at least some access to lawyers, accountants, estate agents, rental agents etc.
We are not accessing our normal communication channels daily so if you need me to forward your query onto the relevant external service provider, please email me. I can tell you very little is happening just now in the conveyancing, property, or tax sectors, although a little positivity is the number of enquiries we get from people who intend to buy property this year. Spain is still Spain!
Don’t despair if your enquiry is not responded to immediately, we’ll make sure the experts get back to you as soon as they can.
Be patient, it’s only for a little while.
My private email is:
One of the questions many clients are asking is:
What’s happening with the economy in Spain?
Who is open for business? Is there any available government aid? As you’d expect during this economic meteorite, nothing is easy. The rules have changed daily it feels like, and what we are reporting here is only the way it’s all been explained to me by Mari Carmen of MC Consultants. She is our external expert in these matters.
A couple of the points explained to me by Mari Carmen are:
THE CONSTRUCTION SECTOR
The construction sector in Spain was booming just a few weeks back. Here in Cabo Roig, we have a large number of sites being developed and they are currently closed. We are led to believe that smaller sites can reopen from next Tuesday, 14th. We don’t know why this is the return date as the rest of us are in lockdown until after April 24th. All essential workers are required to carry certificates, ID and paperwork to prove they are legitimate. The reality is that the Government’s official BOE buletin often leaves as many questions as answers regarding benefits and pay. This is not a time for employers to try to get rid of staff overheads, that is for sure. Employers especially now, must be careful!!
WHAT IS AN ERTE?
This word, Erte, which many people had never heard of before two weeks or so ago is “An expediente de regulacion temporal de empleo”. What it really means is that a firm can use the ERTE, or special law, to temporarily lay off staff and in some cases, cut hours. At the same time, the workers can claim unemployment benefits.
In theory, this Denmark style scheme is a positive step for both the economy and workers. The problem is that the rules are still largely unclear. We do know that for the employee, during the first six months of the crisis, workers are entitled to 70% of their base salary. This in theory will drop to 50% from the seventh month, in the unlikely event we get there.
The amount the employee gets, is calculated from an average of the previous 6 months employment, excluding any other benefits such as mileage. If hours are cut rather than reduced to zero, normal wages must be paid for the percentage of the day worked.
In order qualify a worker must have:
- Worked for 360 days work in the past six years:
- Have hours of work reduced by between 10% – 60%:
WHAT IS IPREM IN SPAIN?
The Multiplier for the Public Income Index (IPREM) is an index used in Spain as a reference for the granting of economic aids, grants, allowances or the unemployment benefit among others. This index was established in 2004 to replace the Minimum Wage as a reference for these aids.
The IPREM is published annually via the Budget Law. We have to use the latest officially published value as a reference. This will allow us to determine whether our income is more than a certain number of times greater than the current IPREM.
Employers can make ERTE applications for a company’s entire workforce or just a % of the employees.
There may be as many as three quarters of a million people claiming ERTE benefits during the crisis.
At Spanish Solutions we applied for and were granted our ERTE. We did all the work on behalf of the employees working with SEPE, the Spanish body that deals with benefits. From our point of view, we just had to notify workers, then Mari Carmen submitted the application for us.
We needed to provide supporting evidence to explain why coronavirus had damaged our business activity. We thought we’d get it all approved within a 24 hour period, but it took 14 days!
For people who have contracted Coronavirus, whether or not they are “essential” they must inform their employer, take the necessary precautions, and they will be entitled to 75% of base salary during the down time. This will be paid through Social Security and can be topped up by the employer to the full amount.
SELF EMPLOYED (AUTONOMOS)
Autonomos workers, or self employed people have been able to apply for the paro de los autonomos since last year. Good timing. To get this payment, you must have worked as an autonomo for 12 months in Spain. You must be legal, registered and up to date with all Social Security payments.
The Government, to its credit, has unveiled a massive package of measures for the self-employed.
Vat (IVA), corporation tax and income tax can now be deferred. It is the first time this happened and it applies for business owners who turned over less than €6 million in 2019.Spain has also approved a payment for self employed people whose business has closed, temporarily or permanently, or where their turnover has fallen by 3/4.
We wonder what the regional governments have in store? It is believed they have set aside billions of euro for the self employed and SMEs- the heart of the economy.
They have also agreed a measure to suspend the Social Security payments for the self-employed.
Although it’s all confusing, unnecessarily so, at least the government is reacting and hopefully they will help us to get out of the economic situation so many of us find ourselves in right now.
GETTING FINED IN SPAIN DURING CORONAVIRUS
Spain has implemented some of the strictest lockdown procedures in the world.
How do you punish stupidity while hoping to deal with the COVID-19 outbreak? Well, here fines are handed out for breaking the rules. The rules include prohibiting people from being out on the streets, with the exception of those essential employees, those shopping, or walking their dog with a five minute limit. Turns out drinking beer in Benidorm while signing football songs, changed to anti-Coronavirus songs for amusement, did not constitute essential.
Other activities that attracted some of the 30,000 fines handed out to date include:
One man was fined for walking his goat and there have been fines for numerous chicken and cat walkers.
A person in Murcia city was fined for dressing as a Tyrannosaurus Rex while walking on the streets there. The video is hilarious though, and it’s already had millions of views. Seriously, a T-Rex walking down the street… What’s not to like?
Five geniuses on the Spanish island of Tenerife were fined after breaking the country’s lockdown procedures, by boasting about it on social media.
The lads were found to have disobeyed the lockdown playing football in the park. They have been grand had they not posted it on Facebook. The picture of them all together along with the hashtag “#yomequedoenlacalle (I stay on the street) appears to have annoyed authorities.
It gets dumber….
A 77 year old Spanish pensioner should have known better but, he has been fined. The multa is not for walking his goldfish but he has been fined for “hunting Pokemon”. Yes, he was “hunting Pokemon” on the streets of Madrid and found guilty for infringing public safety laws by playing outside his home.
It gets even more dumber….
A man has been fined 135 euros after trying to walk from France to Spain. He was saved by local mountain rescue service who say he was “exhausted, shivering, cold and lost” by the time he was eventually picked up.
He needed to be saved and taken by hospital by helicopter from the Pyrenees after attempting to get to Spain to buy cheap cigarettes.
The unfortunate man, from Perpignan, 25 km from the Spanish border initially set off by car. When he was stopped at the border, he continued by foot before becoming lost and his ordeal really then began.
There are a load more of these are you can see that there is a need for the implementation of fines from 600 to 30,000 euro!
So called “serious incidents”, (I thought getting lost in the Pyrenees was serious) can also result in custodial sentences between three months and up to four years. A lady, I heard on the news this morning, was jailed for breaking the lockdown rules, having racked up 8 fines in 15 days on the island of Mallorca.
Maybe this is a good place to end.
Have a safe and happy easter everyone.
One last dumb story, again unfortunately totally true:
Never waste a good crisis.
King Felipe VI of Spain did not waste any time in distancing himself from, and renouncing any future inheritance from his father. This sounds a little “#megixit and the suspiciously red haired prince” but it’s a quite serious story. Had it not been for the Coronavirus, the heat on the emeritus king Juan Carlos regarding suspected financial issues involving Saudi Arabia, millions of euro and some Swiss bank accounts would be unbearable.
The decision of the young king comes following reports that Felipe VI appears as a beneficiary of two foundations in Panama. These are called Zagatka and Lucum. The latter fund is under investigation by anti-corruption prosecutors for allegedly, in 2007, taking an unexplained $100 million payment from Saudi state. Eight years ago, a further 65 million was transferred to Corina Larsen, a Monaco based business woman and old friend of Juan Carlos, with no obvious explanation apart from it being a donation. It is fascinating that this emerged as part of the Panama papers, an innocent unintended consequences as seen on the Netflix movie “the Laundromat”.
The king of Spain was found out and uncovered by a widow in the states whose husbands insurance company, based in Panama refused to pay his insurance after a boating accident. She could have quite by accident, uncovered one of the biggest financial scandals ever in Spain.
Last bit, I promise….
It also emerged this week that King Juan Carlos is in isolation in part on his royal jet suggesting that the Reign in Spain is in fact mostly on the plane.
How long have I waited for the opportunity to use that gag?
Happy Easter everyone- We’ll be back, bigger and better than ever soon.
Stay safe, Ian, Lynne and the team.