Spending cuts and tax hikes to cut Spain's public deficit in 2012

Automatic summary, not yet reviewed

1. The December 2012 extra pay is eliminated for public sector staff, including civil servants, labor staff, senior officials and members of the judiciary. Employees earning less than 1.5 times the minimum wage per year are exempt.
2. Severance pensions and similar payments that former senior officials receive become incompatible with any other public or private pay, and also with the retirement pension. Those leaving office have 15 business days to choose between one or the other.
3. Public employees' leave is reduced: personal days are cut to three, vacation is set at 22 business days with no extra seniority days, and agreements that conflict with these rules are suspended.
4. If a public employee is on sick leave for common illness, the public top-up is capped: 50% of pay for the first three days and 75% through day 20. From day 21 it can reach 100%.
5. The contributory unemployment benefit drops from 60% to 50% of the reference base from the seventh month on, applying only to those who start receiving it after the rule takes effect. The minimum benefit cap is kept.
6. VAT rises effective September 1, 2012: the general rate goes from 18% to 21% and the reduced rate from 8% to 10%. Some goods and services, such as hairdressing and funeral services, move to the general rate.
7. Store opening hours are liberalized: shops may open on at least 16 Sundays and holidays a year, and regional governments cannot set that minimum below 10. Sales, clearance sales and other promotions may also run at the same time in one store.
8. The rent aid for young people (renta básica de emancipaciónRenta básica de emancipación A monthly state payment to help young people pay the rent on their home.) is cut by 30% to 147 euros a month. It also becomes incompatible with other regional rent subsidies.

Who it affects

• Public sector employees and staff: They lose the December 2012 extra pay, get fewer days off, and receive less pay during common-illness sick leave.
• Former senior officials: They can no longer collect both their severance pension and another public or private salary, or their retirement pension.
• Unemployed people receiving benefits: The benefit drops to 50% of the base from the seventh month, and requirements for means-tested subsidies are tightened.
• Consumers: They pay more VAT on many goods and services from September 1, 2012.
• Young renters: The rent aid drops to 147 euros a month and cannot be combined with regional subsidies.

Words worth knowing

Base reguladora

The reference amount used to calculate how much a benefit, such as unemployment pay, is worth.

Días de libre disposición

Paid days off that employees can use whenever they want, without giving a specific reason.

Incapacidad temporal

Temporary sick leave: a person cannot work due to illness or accident.

Recargo de equivalencia

An extra VAT percentage paid by some retailers instead of filing the tax themselves.

Renta básica de emancipación

A monthly state payment to help young people pay the rent on their home.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries