Extra money for Social Security and tax-free volcano aid

Automatic summary, not yet reviewed

1. An extraordinary credit of 5,012,000,000 euros is approved to balance the impact of COVID-19 on Social Security accounts. It will be financed with public debt.
2. In 2021, the National Social Security Institute and the Social Institute of the Navy may finance any credit increases needed to pay pensions and other benefits using expected higher revenues over the initial budget, not only revenues already recognized.
3. In 2021, the State Public Employment Service may finance in the same way the credit increases needed to pay unemployment benefits, using expected higher revenues from unemployment contributions.
4. Public aid to repair destruction caused by natural phenomena, such as the Cumbre Vieja volcano eruption on La Palma, is not taxed under personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. or corporate tax. The measure applies from January 1, 2021.
5. A paragraph of letter m) of Article 34.1 of the credit institutions law is restored. It had been deleted by mistake in an earlier amendment and deals with deferring variable pay for bank executives.
6. The royal decree-lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. enters into force on the day it is published in the Official State Gazette.

Who it affects

• People receiving Social Security pensions and benefits.: Payment of their benefits is guaranteed.
• Unemployed people receiving unemployment benefits.: The State Public Employment Service will have funds to pay them.
• People who received public aid for property destroyed by the Cumbre Vieja eruption or other natural phenomena.: They will not have to declare that aid under personal income tax or corporate tax.
• Credit institutions and their executives.: The rule on deferred payment of variable pay is restored.

Words worth knowing

Crédito extraordinario

Extra money added to the state budget for an unplanned expense that cannot wait.

Ampliación de crédito

An increase in the money available in a budget to cover higher than expected spending.

Base imponible

The amount of money on which a tax is calculated.

Remuneración variable

The part of a salary that depends on results, unlike fixed pay.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

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