HEALTHPLAN MAGAZINE

In a significant development for student interns and those undergoing vocational training in Spain, a mandatory registration for social security and quarterly tax filings was implemented on October 1, 2023, after being published in the Official State Gazette (BOE) on March 21, 2023. This shift poses a substantial administrative challenge for universities across the country.

Before the enactment of this new law, students undertaking internships were exempt from Social Security contributions and lacked access to benefits such as unemployment or sickness benefits.

Approximately 400,000 university students and 458,000 vocational training students engaging in internships must make social security contributions, a process known as "cotizar" in Spanish. This involves making payments into Spain's social security system, referred to as "la seguridad social," and the associated noun, "cotización," signifies these contributions.

Under this new regulation, students participating in internships will now enjoy comparable social protection to other employed individuals, albeit with certain distinctions.

Commencing October 1st, 2023, students engaged in internships within the private sector in Spain will be obligated to make contributions to the Social Security system. However, their contributions will be at a reduced rate, specifically 30 percent of the legally defined minimum base used for calculating Social Security contributions.

While this new requirement adds an administrative layer for interns, the government has assured full subsidy coverage for their contributions throughout 2024 during the training period. Consequently, students will not be responsible for covering these fees personally.

However, regional administrations and universities have raised concerns about the potential bureaucratic complications of this measure. The process involves individual registration and de-registration of each student, specifying the number of days per month dedicated to work or internships. Each region is expected to manage this quarterly.

Universities are apprehensive that the year-end accumulation of this new responsibility may overwhelm their administrative services. This concern arises from the reluctance of companies and institutions to assume the new procedure independently.

María Antonia Peña, the president of the Sectoral Committee on Student Affairs of Crue Universities, emphasised that various technical issues are still being resolved with the Social Security Treasury.

Crue, an association encompassing the majority of Spanish universities, estimates that around 400,000 internships take place annually in Spain, adding to the apprehension about efficiently processing this substantial volume. Many of these internships are mandatory, making them a prerequisite for graduation.

Regulations dictate that companies and institutions, unless specified otherwise in agreements, bear the responsibility of processing these contributions. However, according to Peña, several companies are exploiting this clause and passing the responsibility onto universities.

Moreover, over 458,000 vocational training students will also be required to register for social security, with the fees being subsidised by 95 percent. The Ministry of Education, Vocational Training, and Sports will cover the remaining 5 percent in 2024.

Notably, some education ministers express discontent with this move. José Antonio Rovira, the Valencian Minister of Education, labelled the measure an attempt to "artificially raise Social Security affiliates," emphasising its potential to generate additional administrative work. Emilio Viciana, the Madrid Minister of Education, Science, and University, highlighted the need to address youth unemployment instead of focusing on statistical contributions to Social Security.

María Mercedes Vaquera, the Extremaduran Minister of Education, expressed regret over the rejection of the proposal by fourteen communities to postpone the implementation of social security contributions for these students by the government of Prime Minister Sánchez.

The government aims to eradicate Social Security fraud linked to internships falsely labelled as job positions. Students who concluded internships before the enactment of the law can seek a one-time special arrangement to acknowledge their contributions, valid for a maximum period of two years.

Source

https://www.thelocal.es/20240103/unpaid-interns-in-spain-must-now-register-for-social-security-and-file-a-tax-return
https://www.spain-internship.com/en/news/872-changes-to-internship-laws-in-spain