The Cessation of Activity Benefit of the Self-Employed is a specific system that aims to protect self-employed workers who have completely ceased their economic or professional activity.
We have already discussed the Self-Employed Cessation of Activity Benefit, although it is worth recalling several very important aspects.
Cessation of Activity of Self-Employed Workers
This can be of a definitive or temporary nature, only in the cases that are assessed by law and regulations. Or in an Involuntary way and for any of the Reasons foreseen in the norm.
- Economic, technical, organizational or production causes.
- Major force.
- Loss of administrative licence.
- Gender violence.
- Divorce or marriage separation agreement.
Requirements for applying for the benefit for Cessation of Activity of Self-employed
- Registration in the special regime
- Request the cancellation of the corresponding special regime due to the Cessation of Activity.
- Minimum contribution period of at least the twelve continuous months immediately prior to the legal situation of Cessation of Activity, including the month of the Causing Event.
- Minimum period between 2 benefits for Cessation of Activity of 18 months from the start of the first one, except if it is an extraordinary benefit, or the continuation of an ordinary benefit.
- Commitment of activity and active availability to return to the labour market.
- Not be entitled to the contributory retirement pension.
- Be up to date with the payment of contributions under the special regime. Fulfillment of the obligations of labor character. (if you have dependents).
Contributions as a protective action for the cessation of activity as a self-employed worker
Included in the benefits that cover the cessation of activity is the payment of contributions for all contingencies from the 61st day of sickness, when you are entitled to the economic benefit of temporary incapacity.
Application for and creation of the right to protection due to cessation of activity
Both are techniques, given the modification that was made on the date of the effects of the registrations and cancellations of the self-employed. The cessation of activity will be caused, either the day after the cancellation of the RETA, or the first day of the month following the cancellation.
This is because, since 1 January 2018, the self-employed may be registered up to three times during the year, with effect from the day on which the requirements and conditions for inclusion in the RETA are met, for registrations, and from the date of cessation of activity, for cancellations, instead of the first day of the month for registrations and the last day of the month for cancellations. From the fourth registration and cancellation, the effects are from the first day of the month.
Amount and duration of the benefit
This is set at 70% of the regulatory base.
The regulatory base of the economic benefit for cessation of activity will be the average of the bases for which it had been quoted during the 12 continuous months immediately prior to the legal situation of cessation. For this purpose, the full month in which this situation occurs shall be calculated.
Duration of the benefit
|Months Quoted||Months Served|
|12 to 17 montes||4|
|18 to 23 months||6|
|24 to 29 months||8|
|30 to 35 months||10|
|36 to 42 months||12|
|43 to 47 months||16|
|With 48 months||24|
Extraordinary benefit Cessation of Activity COVID 2020
Although the possible conditions for an extension of the Extraordinary Severance Pay are currently being negotiated and will end on January 31st. The self-employed who applied for the aid for cessation of activity for the third quarter of the year published in Royal Decree Law 24/2020 of 26 June will have to prove compliance with the requirements to avoid having to return them.
Remember that to access the cessation of activity, the self-employed had to submit a declaration of responsibility to their mutual insurance company. And, according to the rule, to receive the aid would have to prove that between July 1 and September 30, 2020 its turnover fell by more than 75% over the same quarter of 2019. In addition, to access the benefit, their net income could not be higher than 5,818.75 euros during the quarter.
Who has to pay back the benefit?
The Social Security authorized the granting of the benefits by means of a responsible declaration of the worker. And once the application period for the benefits was over, the self-employed worker had to prove that he or she met the requirements. Therefore, the benefits were advanced and, subsequently, the cases of reimbursement were managed.
The self-employed who, after having requested the benefit, have invoiced more than expected exceeding the net quarterly return of 5.818,75€. Or with a drop in turnover of less than 75%, will have to return these grants within the established deadlines. Which end in January 2021.
The same applies to seasonal self-employed who also anticipated a cessation of activity and requested the aid. As stated in the Royal Decree Law 24/2020 of 26 June.
Return of the benefit by requirement
Those freelancers obliged to return the benefit for not having complied with the requirements, and who have not renounced it before August 31 or have returned it on their own initiative, may proceed to its return by request.
In the latter case, the freelancer can wait for his or her mutual insurance company to request the return of the benefit by means of an injunction. There will be no surcharges or interest as long as the return deadlines are met.
Article 9.4 of Royal Decree Law 24/202 of 26 June indicates that “as of 21 October 2020 and 1 February 2021, mutual insurance companies collaborating with Social Security, provided that they have the consent of the interested parties granted in the application, or the Social Institute of the Navy, shall obtain from the Ministry of Finance the tax data for the 2019 and 2020 fiscal years necessary to monitor and control the recognized benefits”.
And once the data are verified for the recognition of the benefit, “shall claim the benefits received by those self-employed workers who exceed the income limits set out in this provision, or that do not demonstrate a reduction in turnover during the third quarter of 2020 of at least 75% over the same period in 2019.
If this is the case, “the competent entity for the claim shall set the date of entry of the amounts claimed to be made without interest or surcharge,” as specified in the standard.
Documentation for the return by request
In the event that the mutual insurance company does not have access to the tax data, the self-employed person must provide it with a series of documents. This must be done within ten days of your request:
- Form 303 for self-assessment of Value Added Tax (VAT). Corresponding to the declarations of the second and third quarters of the years 2019 and 2020.
- Form 130 corresponding to the self-settlement in installment payments of the Personal Income Tax (IRPF) of the second and third quarters of the years 2019 and 2020 for the purpose of determining what corresponds to the third and fourth quarters of those years.
- Self-employed workers who pay Personal Income Tax by objective estimation (model 131) must provide the necessary documentation or any other means of proof that serves to accredit the income required under this precept.
The mutual insurance company will establish a date for the return. If the self-employed worker returns everything he or she received on the date set, there will also be no penalty. However, if the return is not made within the established time limits, Social Security may claim the outstanding debt. This would be done with surcharges that can range from 10% to more than 25% of the debt, depending on the delay.
Extraordinary benefit for cessation of activity until January 31, 2021
On the other hand, the Royal Decree Law 30/2020 of September 29th includes an extraordinary benefit. This is effective from October 1st, 2020 until January 31st, 2021. The benefit allows for aid for cessation of activity corresponding to the fourth quarter of the year.
However, it should be noted that:
- It regulates an extraordinary benefit for cessation of activity for self-employed workers.
- It establishes an extraordinary benefit for cessation of activity for seasonal workers.
- And finally, it extends until January 31st, 2021 the benefits already provided and makes them compatible with work for others.