Spanish Supreme Court clarifies SEPE unemployment and disability subsidy rules

Recent legal clarifications in Spain regarding unemployment benefits and social security have addressed how severance pay and disability status affect eligibility for subsidies.

A Supreme Court ruling has corrected the SEPE's long-standing criteria regarding the subsidy for individuals over 52. Previously, the SEPE required many people with permanent total disability to prove 15 years of contributions made after their disability declaration. The Court ruled that prior contributions must be counted, stating that a person's professional life cannot be reset or fragmented upon receiving a disability pension.

Separately, guidance regarding severance pay highlights the distinction between contributory unemployment benefits and assistance-based subsidies. While contributory benefits are based on previous contributions and are not affected by severance, assistance-based subsidies are subject to income limits. The SEPE may count severance pay as income, which can impact eligibility for assistance. While the Supreme Court allows for IRPF tax exemptions on severance up to the legal minimum, the SEPE does not automatically apply this exemption when calculating income for assistance-based subsidies.