'SOCIAL SHIELD' AGAINST VIRUS
Measures for tenants, mortgages, consumers, businesses and unemployed
THE GOVERNMENT has approved a third decree of measures, including 50 proposals by 11 ministries, to protect small businesses and the self-employed, and the most vulnerable sections of society from the economic fallout of the coronavirus crisis.
The Cabinet also assigned €300 million for distribution among regional governments, including €28.33 million for Valencia and €7.75 million for Murcia. The decree extends all the measures the government has approved so far until a month after the state of emergency ends, unless they specify otherwise.
These are measures to ‘reinforce the social shield against the coronavirus’, said deputy prime minister Pablo Iglesias on Tuesday.
He announced that electricity and water supplies for people’s primary residences cannot be cut off during the state of emergency.
THE MEASURES are also intended to sustain the productive fabric and employment, and facilitate the future reactivation of activity, according to deputy PM for the economy, Nadia Calviño.
She admitted the restrictions to prevent the spread of the pandemic have hit the economy but said the priority was to tackle a health problem ‘which is not compatible with the proper functioning of the economy’. Each week that the Spanish economy is paralysed costs the country between €10 billion and €20 billion, according to the Institute for Economic Research (IFO) in Germany, equivalent to between 0.8% and 1.6% of GDP growth.
Just in Alicante province, according to the regional government, from March 12 to April 1, a total of 80,086 people working for 16,392 businesses were temporarily laid off or had their hours reduced.
Mortgages
Sr Iglesias said the moratorium on mortgages has been extended from one month to three. Initially just for vulnerable people’s primary residences, it also now includes commercial units and offices of self-employed people who have ceased trading or recorded a significant drop in income.
Lenders cannot demand payment of instalments or any other charges, including interest, ‘until the last day of the month when the state of emergency ends’. Owners of properties they are renting out who have not been paid by tenants can also qualify.
Rentals
The government approved five measures to help the more than half a million households it estimates will not be able to pay their rent over the coming months. These are available in certain conditions, which include those temporarily laid off with an ERTE, whose hours have been reduced, the unemployed and self-employed people whose income has dropped. Evictions of people with nowhere else to live have been stopped for six months from the start of the state of emergency. Tenants’ contracts for their primary residence will be automatically renewed for six months if they expire within three months of this new ruling. Zero-interest public microcredits will be available to pay rent, which can be repaid over six years (extendable up to 10), for tenants of landlords who own less than 810 homes they rent out.
These tenants must first ask their landlords to defer payment of rent, who in turn have seven days to accept this, propose an alternative or refuse, and if there is no agreement the microcredits become available. The State will take responsibility for debts if tenants are still vulnerable and cannot pay it after the crisis, up to €900 per month and €200 in bills and maintenance.
Tenants of public or private owners of more than 10 homes, financial institutions and investment funds can obtain a moratorium on their rent for up to four months and return the unpaid instalments over up to three years without interest.
Businesses
To help the self-employed and small businesses, there is a six-month moratorium without interest or charges on social security payments for May, June and July, and deferral of social security debts until June 30.
The payments already made for March can be reclaimed to cover the days not worked, while the one for April can be deferred at an interest rate of 0.5%. This does not apply for those that stopped trading or laid off their employees with an ERTE. Those not eligible can defer their payments for May and June at an interest rate of 0.5%.
Unemployment
For the most vulnerable who have lost their jobs, there is a one-off payment for domestic employees equivalent to 70% of their salary, and one of €440 for people who had a temporary contract of at least two months which was terminated after the state of emergency was declared and who have not accumulated enough social security to claim dole. This is incompatible with any other minimum income payments from any public authority.
Consumers
There is also a moratorium on payment of other loans, including consumer credit, for people who have been made financially vulnerable by the crisis, initially for at least three months. The conditions to access to ‘bono social’ reduced electricity tariff have been expanded to include people affected by employment regulation measures, and the self-employed who have ceased trading or seen income drop by over 75%. Telecom companies can only refuse to allow clients to change supplier when it requires people to physically visit a shop or work to be done in their home, and tariffs cannot be increased as long as it is not possible for customers to change company. People who have paid for cancelled package holidays will receive a voucher to use within a year or if they do not will get a refund.