Hundreds of thousands of self-employed workers all over Spain have received extremely nasty surprises over the last couple of years. For many of them, the COVID crisis of five years ago is far from over…
In Spain an autónomo is a self-employed person. There are well over three million in the country, doing an immense range of jobs that includes bar owners, beauty therapists, plumbers, hairdressers, graphic designers, writers and mechanics.
On Lanzarote, plenty of British, Irish and other foreign workers are autónomos. It’s the standard position for workers who operate on a freelance basis or do not have contracted employment with a business or public body.
In March 2020, millions of autónomos suddenly found themselves unable to work and with no income when Spain locked down, introducing strict measures to halt the spread of the Covid 19 virus and reduce pressure on the health services.
The Spanish Government stepped in, introducing a furlough scheme for contracted workers, and extending financial subsidies to the self-employed. Prime Minister Pedro Sánchez pledged that “No one will be left behind” during the crisis. Further lockdowns and quarantine measures, combined with travel restrictions that briefly wiped out the tourist industry, meant that these subsidies were offered until early 2022.
By then, most autónomos who had managed to keep their business open were back at work. They quickly adjusted to the “new normal” of the post-pandemic period, facing up to problems such as Brexit and the rise in inflation. Then, two years later, many started receiving letters from their mutuas.
The mutuas are insurance companies that operate in the employment sphere, co-operating with the Social Security department, and the letters demanded repayment of sums that were “improperly” paid during the pandemic. Those receiving them had the option of going to their mutua and supplying documentation that might result in as reversal of the decision. If they did not, the debt was transferred to the Social Security Department.
Spain’s Social Security does not mess about. If it wants money, it will get it, and it will do so by placing an embargo on your bank account, withdrawing the debt, often in one fell swoop. There is an option of arranging to pay the debt by instalments, but the money will be taken.
More letters arrived, demanding sums from various periods of the pandemic. This was due to the government’s frequent changing of the criteria for claiming financial aid. As the country slowly got back to normal, the government tightened the requirements every few months, each time making it more difficult for autónomos to claim aid. In all, there were six separate periods when subsidies were offered, each with different criteria.
At the time of writing, we have spoken to several autónomos on Lanzarote who have received demands.
Some of these have been asked to repay sums ranging from €5,000 to €15,000 – a brutal blow for many small businesses. One couple we spoke to have since retired and are having to repay the debts from their pension, which they claim is causing stress and affecting their mental health.
Another autónomo who was asked to pay back over €15,000 told us “This was a body blow, fortunately for me it just meant no holiday or car upgrade this year, but I can imagine for some it would be devastating, and I know several people in that position.”
Another victim, “Stephanie” writes: “The COVID pandemic nearly broke me and my family. And it looks like it’s going to have another good go at it … I have put my soul into this business and worked hard to build a successful, rewarding business, over the years. And it has slowly been chipped away by the bureaucracy, greed, and unfairness of the Spanish regime for the self-employed.”
Stephanie is not the only person who told us they were now considering leaving Spain as a result of the situation. At least two have even stated their intention of doing so simply to escape the debt – “let them chase me,” said one.
All these people are angry and bewildered. They cannot understand how demands such as this can be issued without any previous notice; they claim that they had no knowledge that their claims were “improper”, and they are horrified at the way the Social Security can take money directly from their accounts.
We’ll be looking for comments from the Spanish Government, the opposition and the Ombudsman, and will publish any responses we get in a future issue. In the meantime, here are some recommendations for what you can do if you receive further demands.
WHAT TO DO
First, be sure to stay up to date. Check email accounts that you may have used at the time for notifications, and sign for official letters (or pick them up at the post office).
If you receive a demand, you are advised to visit your mutua. Take a Spanish speaker, if possible, as the subject matter can be highly technical even for nonnatives with good Spanish. You will be informed of documentation that you may be required to provide to challenge the claim, and you can also ask if previous appeals have been approved or rejected, as well as whether further demands from later periods are pending.
If you have received a demand from the Seguridad Social, you are advised to go there as soon as possible to arrange repayment. Their Administrative Office is located on C/León y Castillo in Arrecife, about half-way between the Open Mall and the Charco de San Ginés. It is open from 9 am, and you will be given a number to await your turn.
There, you can arrange for debts to be paid in full or in instalments. If you do not pay them, however, Seguridad Social will dock them from your bank account, along with a hefty penalty charge.
It goes without saying that, for many foreign residents, the advice and assistance of a gestor or asesor laboral (employment assessor) may be helpful.
