Living Minimum Income in Spain: very far from a UBI

In a previous news report the initial details and negotiation of the Living Minimum Income had been specified. In this piece the final details of the Minimum Living Income are specified.

What is the scheme about?

The Minimum Living Income (IMV, due to its acronym in Spanish) is the first national-wide minimum income scheme to be implemented in Spain. Although some of its autonomous regions did count with minimum income schemes, there was not state-wide policy in this respect. Although its approval has been accelerated to tackle the social and economic consequences of the lockdown derived from the coronavirus pandemic, the IMV had already been approved in the coalition government’s agreement between the Spanish socialist part, PSOE, and Podemos.

Essentially, the IMV is a non-contributory cash benefit- which means it is not attached to previous employment history, addressed to households who, depending on their composition, are below a determined income threshold. Although the quantities are detailed later on, this minimum income is below from the poverty threshold, should arrive to 850.000 households and a total of 2,3 million people. The Spanish social security institution has calculated that most of these households (around 550.000) live in extreme poverty, that is, with less than 230 € per month. The IMV should alleviate the situation for around 80% of those households with extreme poverty. In this sense, it is clear that while it may be a step forward in creating a minimum income scheme for the whole of the Spanish state, it is a minimum income for very poor people.

Policy design characteristics

• It is a household based scheme and not an individual one, although individuals living by themselves can ask for this
• The quantity ranges from 462 € (for a single adult) up to 1050€ (depending on the household composition, which is specified later on)
• This benefit is conditional on the following eligibility criteria: –
  • Legal requirements: – recipients must have active and legal residence in Spain for at least 1 year, but some individual are exempted from fulfilling this requirement, like women who are victims of gender based violence and victims of sexual trafficking and sexual exploitation
  • Individuals should have asked for the benefits they were eligible before this one (with the only exception the regional minimum living incomes)
  • Non-working adults should e registered as solicitants of employment
  • Economic conditions: have a lower income than that stipulated by the living minimum income, minus 10 euros (450€ for a single adult). These economic conditions also include heritage -excluding first residence and debt-, and the total patrimony should not exceed three times the IMV quantity. Individuals owning a mercantile society are automatically excluded from this benefit
  • Age: 23 to 65 years old
• Compatibility and other benefits
  • This benefit is compatible with other benefits and incomes, with the exception of some child allowances, because in fact, individuals/households who are recipients of some child allowances do not have to ask for this benefit formally, but it is automatically integrated into their income transfers
  • Individuals who are eligible for this benefit you also become automatically exempt from paying medicines and university fees

Quantity

The table below outlines the quantities for different types of household compositions.

Summary of quantities, taken from civio.es, available at: https://civio.es/el-boe-nuestro-de-cada-dia/2020/06/01/ingreso-minimo-vital-boe/

How the benefit should be requested

The application may be carried out online or by mailing; some cities will be able to do this through town hall administrations if they have an agreement with the Spanish social security. In terms of the required documents potential recipients need to accredit copies of the following documents: – ID, proof of residence, proof of address and proof of the living or cohabitation unit- victims of gender based violence have to accredit  a certificate of being victims. Applicants do not have to calculate their income, but this is automatically done through the social security services. Finally, the whole process may take approximately 3 months

Loss of the benefit

One of the interesting characteristics of the IMV is that the benefit is not automatically lost if the recipient finds an alternative source of income like employment. While the benefit will be reduced shall the recipients receive additional incomes, it will be reduced less than proportionately, with the objective of stabilizing the recipients’ economic situation. The full details will be specified in a forthcoming regulations that still need to be developed.