The Special Scheme for Self-Employed Workers (Special Scheme for Self-Employed Workers (RETA)) covers all workers who carry out an economic activity for profit on their own account and who, unlike employees under the general scheme, do not work under the direction of any employer.
Written by Josep Conesa
Employment and insolvency lawyer
One of the obligations of self-employed workers is to register under this special scheme, which entails a series of duties imposed on the self-employed worker and, in turn, a set of rights in the form of Social Security benefits and entitlements.
OBLIGATIONS OF THE SELF-EMPLOYED WORKER
REGISTRATION AND ENROLMENT: the employee must apply for registration and enrolment in the scheme with the General Social Security Treasury (TGSS) from the moment their activity begins. The stipulated deadline for registration and enrolment is thirty days from the start of the activity; however, for the purposes of benefits, the worker will not be considered enrolled until the application has been formally submitted.
Enrolment takes effect from the first calendar day of the month in which the activity begins. Failure to register under this special Social Security scheme constitutes a serious infringement for which the employee is directly liable. If the enrolment application is submitted outside the deadline referred to above, in addition to the penalty, the employee will be deemed to have been enrolled from the first day on which their activity commenced and will be required to pay the applicable contributions together with any surcharges and interest accrued from that date.
Contributions: payment of contributions is the self-employed worker's own responsibility; however, in the case of the owner of a business in which family members or a spouse also collaborate, the owner may bear subsidiary liability for any unpaid contributions of those family members.
De-registration: the individual must apply for de-registration within six calendar days of ceasing their activity, and de-registration will take effect from the first day of the month following the application.
RIGHTS OF THE SELF-EMPLOYED:
Registration under the Special Scheme for Self-Employed Workers (RETA) establishes a set of basic Social Security entitlements available to self-employed workers. However, to access these entitlements, certain requirements must be met:
· Being registered and active — or in an equivalent status — with the General Social Security Treasury (TGSS). Equivalent statuses include: the ninety days following deregistration under the disability and maternity scheme, the status of seasonal workers, and subscription to a special agreement. Failure to be registered means that no entitlement to benefits is generated.
· Being up to date with contributions at the time of wishing to exercise the rights applicable to self-employed workers. Where this is not the case, it is provided that, within a period of thirty days, an invitation to pay and regularise outstanding contributions will be issued. Once the overdue payments have been made within this period, the entitlement will arise. Conversely, if no such regularisation takes place, no benefit will be generated until payment is made.
Social Security BENEFITS FOR SELF-EMPLOYED WORKERS:
Once the above requirements are met, self-employed workers may become entitled to the following Social Security benefits:
· Healthcare: the healthcare benefits currently recognised for self-employed workers are identical to those provided for workers under the general scheme.
· temporary disability (IT) (IT): this is an optional benefit which, if opted into, increases the self-employed worker's contribution rate by 3.3%. This benefit provides cover for temporary disability regardless of whether its origin is occupational or non-occupational. Furthermore, if the self-employed worker opts into temporary disability cover, they may make a further election to extend that cover to temporary disability (IT) arising from occupational contingencies — specifically, work-related accidents; in this case, the additional contribution rate will vary depending on the nature of the self-employed worker's activity. Self-employed workers who opt into the temporary disability benefit must maintain that option for a minimum period of three years.
· Permanent Disability (IP): this benefit is very similar to that established for workers under the general scheme. Permanent disability may either be treated on a generic basis without distinction as to whether its origin is occupational or non-occupational, or it may be differentiated depending on whether the contingency is common or occupational. A notable feature of this special scheme is that Partial Permanent Disability and Permanent Non-Disabling Injuries will only be recognised where the self-employed worker has opted into temporary disability cover for occupational contingencies. In the case of Total Permanent Disability, the self-employed worker may choose between a monthly pension or a lump-sum payment equivalent to forty months of the regulatory base.
· Retirement: the conditions for this benefit are the same as those available to workers under the general scheme, with the exception that self-employed workers (autonomos) may not in any case retire before the age of 65.
· Death and Survivor Benefits: self-employed workers are entitled to a death grant, widowhood pension, orphan's pension, and benefits in favour of family members. Where coverage for occupational contingencies has been taken out, entitlement to a lump-sum payment also arises in the event of death resulting from an occupational contingency.
· Child Dependency Allowances: self-employed workers are entitled to non-contributory benefits in the form of a child dependency allowance, a benefit for the birth or adoption of a third child, and a benefit for multiple births or adoptions.
· Maternity and Pregnancy Risk: there is no difference between the benefits available to self-employed workers and those provided to workers under the general scheme in this respect.
CONTRIBUTION BASES AND RATES:
Contribution bases and rates are one of the key distinguishing features of the Special Scheme for Self-Employed Workers (RETA). Workers registered under this scheme may choose any contribution base between the maximum and minimum limits. The contribution base is set annually; for 2006, the maximum was established at €2,897.70 and the minimum at €785.70.
However, for workers aged 50 or over, and subject to certain specific exceptions, the maximum contribution base they may select is €1,509.60.
INCENTIVES AND REDUCTIONS:
A self-employment promotion scheme is currently in place, under which workers under 30 years of age and women aged 45 or over who register with the Special Scheme for Self-Employed Workers (RETA) may opt for a contribution base set 25% below the general minimum base for the self-employed scheme, without any reduction in the benefits to which a self-employed worker is entitled.
Self-employed workers aged 65 or over who can demonstrate at least 35 years of contributions are no longer required to pay Social Security contributions. Where the individual has reached the age of 65 but has not yet met this requirement, the exemption will apply from the date on which 35 years of contributions are certified. Such workers will only be required to contribute if they wish to maintain cover for temporary disability (IT) and occupational contingencies — at a rate of 3.3% in the former case and at the rate applicable to their activity classification in the latter.
These bonuses are a recent development, yet they only bring the social protection of self-employed workers to around 90% parity with that of employed workers. Self-employed individuals are still not entitled to claim unemployment benefit, even when unemployment arises through no fault of their own. Early retirement provisions for the self-employed are likewise not aligned with those available under the General Social Security Scheme, and there remains no option to include self-employed workers' family members under a Family Scheme with corresponding rights and obligations.
