On 29 May 2020, the Spanish Government adopted Decree-Law N. 20/2020 establishing the “Minimum Vital Income (“Ingreso Mínimo Vital”). The Decree-Law was approved and transformed into Law by the Spanish Parliament on 11 June 2020.

This Minimum Vital Income consists of an economic allowance of EUR 462 for a single person and up to EUR 1,015 for a family with two children for low-income households on a monthly basis. It is a measure introduced to support vulnerable groups at risk of poverty. Eligible individuals are people aged between 23 and 65 years old and they are entitled to the benefit as long as their income conditions do not improve. The national social security institution is in charge of managing the programme and will distribute this financial support as of 26 June 2020. This initiative will have a cost of around EUR 3,000-3,500 million.

The Confederación Española de Organizaciones Empresariales (CEOE) was consulted prior to the adoption of the measure and positively commented the overall objective of the initiative, especially for those groups severely affected by the impact of Covid-19. However, it disagreed with launching such a “structural reform” during the emergency crisis without properly assessing the situations of individuals who were not already covered by other Covid-19 related economic measures.

CEOE President, Antonio Garamendi called for an “ad-hoc measure instead, to be quickly adopted and in force until the end of the year”.

A second point of disagreement was based on the fact that the measure was not linked to an active search of employment, which may provide those families receiving the income with less incentive to improve their employability. Moreover, CEOE requested that businesses hiring an individual receiving the minimum vital income should be subsidized: in this way, such a programme would be beneficial for both the worker and the company, as well as for the social security system that would receive a contribution for the work of the employee.

CEOE President, Antonio Garamendi, by commenting this measure in different media, underlined that “this measure must be directed at improving the employability” and be linked to upskilling and reskilling.