The Ministry of Labor is preparing regulations to reform the unemployment protection system, simplifying and improving the level of assistance and creating a complementary benefit to the contributory one.
According to the text submitted to prior public consultation, the new unemployment assistance protection may be received by those who do not have the necessary contribution requirements to access the contributory benefit or by those who have exhausted it and cannot find a job. In this way, the protection received by those who did not come from a job will no longer be classified as unemployment protection.
Likewise, it will extend the duration of the subsidies to compensate for the repeal of the active insertion income (RAI) and extraordinary unemployment benefit (SED) programs, guaranteeing protection for a longer period of time.
With this reform, the Ministry wants to expand unemployment protection, improving coverage by increasing the duration of subsidies and eliminating the protection gaps in the system currently in force. This will simplify the procedure, making access and permanence in the subsidy more flexible and reducing administrative burdens, while at the same time linking this protection to the commitment to monitor and carry out a personalized employment itinerary.
Currently, the unemployment protection system is complex, with a contributory benefit, another assistance, agricultural income, protection for self-employed workers, job training programs, minimum income and non-contributory benefits. Added to this are the different regional programs that go beyond unemployment protection, since they guarantee minimum resources.
Reform of hiring incentives
The Ministry of Labor is also drafting regulations that will simplify and standardize the bonuses in social contributions to encourage hiring, which entail an expense of 1,821.6 million euros per year. According to the document submitted to prior public consultation by the Ministry of Labor, the incentives for hiring via bonuses in social contributions together account for around 25% of total spending on active labor market policies.
Thus, in the case of quota bonuses, which are supported by the budget of the State Public Employment Service (SEPE), the expenditure in 2020 amounted to 1,821.6 million euros, the document details. To this must be added the incentives applied through subsidies granted by both state and regional employment services which, given their disparity, are not calculated.
The text defends that the incentives, although they facilitate the obtaining of employment in periods of crisis, have some “modest positive effects”, which are mainly found “in individuals with a medium-high level of training” and that “do not last in the time after the incentive wears off. “
The subsidies and bonuses applied to hiring “have not been able to solve the structural problems of the labor market, proving ineffective in achieving an impact that lasts over time.” For this reason, the text continues, “a review and update of these must be carried out, which allows the reordering of resources to reinforce the customization of active policies, with the ultimate objective of achieving maximum effectiveness and efficiency in their application.”
Incentives should be aimed at improving the employability of very specific groups with low employability, especially in recessive periods, he adds.