Exemptions, postponements and moratoriums on Social Security for the coming months
Royal Decree Law 11/2020 of March 31, which adopts urgent complementary measures in the social and economic sphere to deal with COVID19, establishes a series of measures to make the payment of Social Security contributions more flexible, both for the Special Regime for Self-Employed Workers, as well as for the General Regime of Social Security.
How will these measures affect the quotas generated in the coming months? Below we detail how they affect according to the situation of each company:
1. Self-employed with the right to extraordinary benefits for cessation of activity.
Self-employed workers affected by the forced closure or loss of income of 75% or more will have the right to request the extraordinary benefit for cessation of activity.
This feature implies that they will not pay social contributions while they collect said benefit and that will be accounted for as a listed period.
- What about the March fees? In the case of having paid the corresponding fees prior to the granting of the benefit, the General Treasury of Social Security (TGSS) will automatically return the corresponding proportional part (from the declaration of the state of alarm, from March 14 to 31 ). In addition, for those who have not been able to meet that fee as of March 31, they will not have surcharges for late payment from March 1-13, when they had normal activity. When they pay, they will be considered regularized without the need to pay any type of surcharge.
- What happens to the quota for the month of April? The TGSS will not charge them the corresponding fee while the state of alarm continues. The benefit will cover until the last day of the month in which this declaration ends (currently, until April 30)
- What about the May and June fees? During these months, they can postpone social contributions at a reduced interest of 0,5% (normally 3,5% applies). To access these postponements, they must be self-employed affected by COVID-19, and that they are benefits of the benefit for cessation of activity, that do not have debts with Social Security and cannot have another postponement in force before.
- Non-postponed amount: Of the contribution fee in the Special Regime for Self-Employed Workers, there is a part of this fee that cannot be postponed and that must be paid, which in the case of a self-employed person will be between € 20 and € 45, depending on the contribution base and the activity carried out.
2. Self-employed workers who continue their activity and who are NOT entitled to the benefit for cessation of activity.
The self-employed who have maintained their activity and have not accessed the extraordinary benefit will be able to access flexibility measures to improve their situation during these months.
- What about the fees for May, June and July? The Ministry has approved a moratorium (without interest) of six months for these fees (until November and December 2020 and January 2021). Their requirements will be established by ministerial order.
3. Companies that have submitted ERTE's due to Force Majeure.
The measures for companies that meet the requirements to submit Temporary Employment Regulation Files also vary depending on the month in which we are. These fees, unlike in the case of freelancers, are paid one month after the accrual date.
- What about the March fees? The companies that have seen the ERTE approved due to force majeure derived from the declaration of the state of alarm are exempt from paying the proportional part of the contributions for the month of March of the workers affected by this ERTE (between 14 and 31).
- April fees. The exemption of fees will be maintained for the duration of the period of suspension of contracts or reduction of authorized working hours. From that moment they may request the deferral at 0,5% interest.
- May and June installments (Payable in June and July). They may request the postponement of these installments with an interest of 0,5%.
4. Companies that have maintained their activity.
Companies that have not submitted ERTEs due to force majeure will also enjoy flexibility measures:
- Fees to pay in May, June and July. They will be able to benefit from the 6-month moratorium for the installments corresponding to the months of April, May and June (whose payment period is one month later) if they meet the requirements and whose payments with the accepted moratorium will be in November and December 2020 and January 2021.
In all the above cases, both for freelancers and for companies, the term to request the moratorium or postponement of fees will be from 1 to 10 of the month of payment of said fee, that is, we must request it from May 1 to 10 for the fees that must be paid on May 30, 2020.
