Lower-income autónomos to pay less social security in Spain
Rather than a fix monthly rate, freelancers will soon be able to pay social security based on how much they earn.
The government is moving towards a progressive tax system for those claiming autonomo in Spain. This has been a long standing campaign by some low income freelancers that have to pay a fixed rate of social security.
Under the current system, those on autonomo can choose which monthly social security tax they pay. The more expensive rate give more benefits down the line. However, 84% of those on autonomo chose to pay the lowest bracket.
This new system will mimic Spain’s current income tax framework. The Social Security Ministry and the Tax agency are pooling their data in order to facilitate the system.
Sources from the government departments have said that the importance of the new system is simplicity. Extra paperwork for those on autonomo will lead to confusion and failure of the plan.
Some are against the new system. Lorenzo Amor, president of the self-employed workers association ATA, thinks that now is a bad time to introduce new payment systems for a low income bracket. He believes that it might lead to higher monthly payments for some freelancers.
He said: “We will not support any change in the contribution system for the self-employed that means a raise in their contributions. This is not the right time, and the self-employed are really struggling.
Other self employment associations have welcomed the plan. José Landaburu, secretary general of UATAE said: “The current system is unfair, since those with lower incomes are harmed, as they have to make a contributive effort that is above their possibilities,”