The Royal Decree-law 8/2020 of 17th of March has been approved with urgent and extraordinary measures to confront the economic and social impact of COVID-19. This decree includes a series of measures to support employees, families or vulnerable groups who are noticeably affected by the current circumstances. It also establishes measures to make temporary activity adjustments more flexible in order to avoid dismissals. Additionally it presents measures to guarantee financial liquidity to sustain the economic activity against the eventual difficulties resulting from the situation generated by the current health crisis.
Here is a summary of the the main exceptional economic, financial and tax measures:
Social services and supplies
600 million Euros will be used to finance basic Social Security benefits. These benefits will cover healthcare measures for the elderly, people who are dependant on others and vulnerable groups. The money will be transferred to the Autonomous Communities and Local entities in order to finance these essential benefits.
Basic supplies such as electricity, water and gas, or telecommunication services will also be guaranteed.
Unemployment benefits in the case of ERTE
Everyone affected by a Temporary Employment Regulatory File (ie. ERTE as per its Spanish acronym) due to force majeure will receive unemployment benefits even if they have not been contributing long enough to be entitled to receive them. The benefit to be received will be based on the average of the tax bases contributed while working for the company over the last 180 days.
This benefit will count as part of the contribution period, therefore it will not decrease the contribution time the beneficiary might be entitled to in the future due to end of activity.
Mortgage payment deferral for the acquisition of main residence
Mortgage payments for the purchase of the main residence will be deferred. This will apply to mortgages granted to debtors in a situation of economic vulnerability, that is:
- Mortgage debtors who become unemployed or, business owners or professionals who are suffering a substantial loss of income or a substantial sales drop.
- In general, the total income of the family unit does not exceed the limit of 3 times the Public Income Index (IPREM for its Spanish Acronym) in the month previous to the moratorium. IPREM’s weighing will increase based on the number of children, or in in the cases of one-child families or disability of one member of the family unity.
- Mortgage payments, plus expenses and basic supplies, exceed or are equal to 35% of the net income of all the members of the family unit.
- The family unit has suffered a significant alteration of their economic circumstances in terms of effort to afford payment of their dwelling, as a consequence of the health emergency.
Right to adapt working times and reduction of working hours
Employees who can prove that they need to take care of their spouse or partner or blood relatives up to second degree within the framework of the exceptional circumstances needed to prevent the transmission of COVID-19, will be entitled to adapt and or reduce their working times.
In this case, the company and the employee have to do their best in order to reach an agreement.
