HEALTHPLAN MAGAZINE

Spain’s Minimum Income System To Cost €5.5 Billion Spain News

With the Coronavirus wreaking havoc on Spain’s economy and many citizens paying the cost through unemployment or lost income, the collation government is planning to introduce a new benefits system to help households in need.

The benefits system will provide a minimum income to families. It is predicted this will help to support around one million households across Spain. However, the minimum income system will not be available to all of Spain's citizens. Instead, it will be means-tested and will depend on the number of children in the family, the family’s poverty level and the type of family.

Initial outlines suggest the package would cost €5.5 billion, just over half of the cost of Spanish pension payments. It is believed this minimum income cost would decrease over time as the system begins to absorb other social benefits.

The scheme, designed by the Ministry for Inclusion and Social Security, will be launched in May. While it will support those suffering in the recent Coronavirus outbreak, the idea is that it will be a permanent system and comes from the commitment laid out by the coalition government last year.

As well as the Ministry for Inclusion and Social Security and its leader José Luis Escrivá, other collaborators in the scheme include the Finance Minister of PSOE, María Jesús Montero, and other key cabinet members such as the Yolanda Díaz and Pablo Iglesias of Unidas Podemos.

How Will It Work?

The system will provide a guaranteed earning to families with little to no income. There will be 12 different classifications to take into account families in any situation of extreme poverty. Then, people will be eligible to receive payments several months into employment. This is to encourage people to go back to employment rather than discouraging job-seeking.

To be eligible, beneficiaries will have to go through a household income analysis, including a review of total assets. This data will then be cross-referenced with information from the Social Security and Tax Agency.

With this, the Spanish government hopes to eliminate fraud and the underground economy at the source.

When Is The Roll Out?

While the plan is to launch the system in May, the next step for the government will be to conduct a series of meetings to ensure the central administration and the 17 regional governments are concurrent. Local councils will play a vital role in the system as they will act as the point of contact for receiving all social benefits.