Working again while on unemployment benefit, and what you keep

Terms used

• Paro — Paro is the contributory unemployment benefit paid by the state while you look for work.
• SEPE — The SEPE is Spain's public employment service, which pays and manages unemployment benefit.
• Autónomo — An autónomo is a self-employed worker registered with Social Security.
• Pago único — The pago único is your remaining paro paid as one lump sum to start a business.
• Subsidio — The subsidio is a means-tested unemployment benefit, separate from contributory paro.
• Sociedad laboral — A sociedad laboral is a company owned mainly by the people who work in it.
• Cuotas — The cuotas are the monthly Social Security contributions an autónomo pays.
• Tarifa plana — The tarifa plana is a reduced Social Security rate for new autónomos.

Key rules

• Tell the SEPE first: Tell the SEPE before you start any job; keeping payments without telling them means repaying them.
• Full-time work: Under 12 months suspends your paro, while 12 months or more ends it and you must make a new claim.
• Part-time work: Paro continues but is reduced in proportion to your hours.
• Self-employment: Your paro is suspended for up to 60 months, and you must tell the SEPE within 15 days.
• Lump sum: You need at least 3 months of paro left and no lump sum in the previous 4 years.

The short version

What happens to your paro depends on the kind of work. Full-time work stops it. Part-time work reduces it. Self-employment suspends it, or lets you take it as a lump sum. In every case, tell the SEPE before you start.

Full-time job

A full-time job is not compatible with paro. Tell the SEPE before you start. If you keep being paid without telling them, that is a serious infringement and you will have to pay the money back. Any subsidies you receive also end when you start work.

What happens next depends on how long the job lasts:

• Under 12 months: your paro is suspended. When the job ends, you can resume it with the days you had left.
• 12 months or more: your entitlement ends. When the job ends, you make a new claim.

The timeline below shows the steps and deadlines.

Part-time job

A part-time job started while on paro is compatible with it. Your benefit is reduced in proportion to the share of the day you work. The days of benefit you use up are also counted in proportion to your hours, so your paro lasts longer.

Tell the SEPE before you start. The SEPE also needs your contract and your pay details. The reduction rules have been changed by recent reforms, so ask the SEPE how your reduction will be worked out.

If you already had a part-time job before you made your claim, your paro is calculated on those contribution bases.

Self-employment

Paro is generally not compatible with working as an autónomo. There are two routes.

Suspension. If you become self-employed, your contributory paro is suspended for up to 60 months. It resumes after the activity ends. Tell the SEPE within 15 days of becoming self-employed.

Lump sum (pago único). You can take your remaining paro as one payment to start a business. You can also use it to join or set up a cooperative or a sociedad laboral. You qualify if:

• you receive contributory paro, not the means-tested subsidio;
• you have at least 3 months of entitlement left;
• you have not used the lump sum in the previous 4 years.

You can receive up to 100% of what remains if you become an autónomo. Apply before you start the activity or within one month after starting it, and before the business is registered. You must then prove the activity within the set period. The money must go on the investment and on Social Security costs.

Paying your monthly Social Security contributions (cuotas) is a separate option. You can use the benefit to offset them.

The reduced autónomo rate (tarifa plana) is a separate scheme run by Social Security. It is not part of your paro. Check the current conditions with Social Security.

Confirm the timing and the percentage payable with the SEPE before you start the activity, because you cannot easily undo a mistake once you have started.

Which page to use

The FAQ below answers common worries, such as what happens if your job or business ends.

Timeline and deadlines

• Tell the SEPE about a full-time job: Before you start the job

• Resume paro after a full-time job that lasted under 12 months: After the job ends, with the days you had left

• Make a new claim after a full-time job of 12 months or more: When the job ends, because the old entitlement has ended

• Tell the SEPE you have become self-employed: Within 15 days of starting

• Resume suspended paro after self-employment ends: After the activity ends, within up to 60 months of suspension

Frequently asked questions

Do I lose the days I have left if my full-time job ends?

You keep your remaining days if the job lasted under 12 months, but you lose them if it lasted 12 months or more. After a job under 12 months, your paro is suspended and you can resume it with the days left. After 12 months or more, the entitlement ends and you need to make a new claim.

Can I take my remaining paro as a lump sum to start a business?

Yes, if you receive contributory paro with at least 3 months of entitlement left, you can ask the SEPE for the lump sum (pago único). Up to 100% of the remaining benefit can be paid, for self-employment, a cooperative, a worker-owned company (sociedad laboral) or a new company. You cannot have used it in the previous 4 years.

When must I apply for the lump sum?

You must apply before you start the activity or within one month after starting it, and before the business is registered. The money must go to the investment and to Social Security costs. Be ready to prove the activity within the period.

Can I get my paro back if I become self-employed and it does not work out?

Yes, contributory paro is suspended for up to 60 months while you are self-employed, and it resumes after the activity ends. You must tell the SEPE within 15 days of starting. This does not apply if you took the lump sum for the same entitlement.