It is normal that, nowadays, many conversations end up touching on the subject of the economic situation in Spain and, consequently, they talk about the unemployment benefit and the unemployment allowance. Both provide an economic amount to the unemployed, but there are differences between them that are worth knowing. If you want to know what they are, in this article we will tell you what is the difference between unemployment benefit and subsidy, Come on!

For someone who loses his or her job and has no possibility of finding another one in the short term, continuing to earn an income is paramount, especially for those who are supporting a family. For this reason, the State Public Employment Service (SEPE) has these two benefits that offer the unemployed a solution until they find a new job.

Although the best known of these two benefits is unemployment -officially called contributory benefits-, there is also unemployment benefit and, mainly, they have to do with the period contributed, the duration of the benefit and its amount.

Difference between unemployment benefit and unemployment allowance

As far as unemployment insurance is concerned, the SEPE has different benefits and subsidies that are adjusted to the needs of each unemployed worker. Regarding these, it is important to know the main differences and when an unemployed person should apply for one or the other.

However, we can tell you in advance that the main difference between unemployment and subsidies lies in their contribution. While 360 working days of contributions are required to apply for unemployment benefits, this is not the case with unemployment benefits.

Likewise, another difference is that in order to access this financial aid, it is an essential requirement not to have an income higher than 75% of the minimum interprofessional salary, which, for 2022, is 750 euros per month.

Contributory benefit or unemployment

The contributory benefit protects the unemployment situation of those who, being able and willing to work, lose their job temporarily or permanently or see their ordinary working hours reduced to 10% and 70%, according to the SEPE. The term “contributory” refers to the fact that the person will be paid according to the amount contributed. For this reason, the longer a contribution lasts, the more it will be paid.

In order to receive unemployment benefits, the interested party must meet a series of requirements, such as having worked and contributed at least 360 days within the 6 years prior to the current unemployment situation.

Likewise, the amount to be received will depend on the Social Security contribution bases for professional contingencies during the last 180 days of contributions.

In addition, depending on the contribution bases and the number of children the unemployed person has, the amount to be received varies between 540.41 and 1,519.92 euros. However, the SEPE has a calculator that estimates the amount to be received.

Requirements to apply for the contributory benefit

As we mentioned before, the contributory benefit corresponds to those who have lost their job temporarily or permanently, or have had their normal working hours reduced to 10% or 70%. However, in order to receive it, you must meet the following requirements:

• To be affiliated and appear registered or assimilated in the Social Security of a regime that is contemplated by the contingency for unemployment.

• Be legally unemployed and available to begin an active job search.

• Be registered or remain registered as a job seeker for as long as the benefit is received.

• Not having reached the ordinary retirement age.

• Not engage in any self-employment or full-time employment, unless there is a compatibility established by an employment promotion program.

• Not receiving a Social Security pension that is incompatible with work.

You may also be interested in: Insurance for foreigners in Spain

Unemployment benefits

If the case is that you have worked less than one year, you can access an unemployment benefit. However, it must be taken into account that the duration of this economic aid will depend on the number of months contributed and whether or not you have family responsibilities, as described by the SEPE.

As with unemployment, in order to receive unemployment benefits, the person must be legally unemployed and registered as a job seeker. However, the main difference lies in the time contributed by the unemployed person.

While the unemployment benefit requires a minimum of 360 days, the employment subsidy requires at least 3 months of contributions if you have family responsibilities and 6 months if you do not.

As for the benefit, it will last between 3 to 5 months depending on the amount of contributions. If the contribution exceeds 6 months, the benefit will last 6 months if there are no family responsibilities and 21 months otherwise.

That said, the amount to be received is equivalent to 80% of the Public Indicator of Multiple Effect Income (IPREM). That is, 463.21 euros as indicated this 2022.

Requirements to apply for unemployment benefits

Those who wish to apply for the unemployment benefit offered by the SEPE must meet the following requirements:

• You must have paid unemployment contributions for at least 3 months if you have family responsibilities, or 6 months if you do not have family responsibilities and do not have 360 days of contributions.

• Do not receive income of any kind that is greater than 75% of the minimum wage.

• Be legally unemployed.

• Be registered and remain registered as a job seeker for the entire period that the subsidy is received.

You may also be interested in: Taxes in Spain for foreigners

Are there other subsidies?

There is a typology within the same subsidies; however, all of them offer the 430 euros aid. We will mention which are the most common ones:

• Subsidy for insufficient contributions. This is an allowance for those who lose their job, but do not accumulate the 360 days of contributions required to apply for the contributory benefit.

• Family allowance. This is a benefit for those with family responsibilities who have no income and have just exhausted their contributory benefit.

• For people over 45 years of age. To qualify for this program, you must be over 45 years of age and have no family responsibilities.

• Subsidy for people over 52 years of age. This is a financial assistance that extends until retirement. It can be applied for by those over 52 years of age who meet certain contribution requirements for an ordinary retirement.

You may also be interested in: All about unemployment benefits in Spain 2022

If you want to keep enjoying more content like this you can subscribe to our TAS Consultancy blog where we constantly post new blogs telling you about current affairs in Spain. If you need any advice about the legal procedures to move to Spain or bring your business idea here, do not hesitate to contact us through our website!