The introduction of new rules regarding the use of FGTS (Fundo de Garantia do Tempo de Serviço) funds may be one of the most significant changes for Spanish workers in recent years. Citizens earning up to five minimum wages will now be able to partially withdraw up to 20% of their accumulated funds to pay off debts. According to Folha de S. Paulo, this decision affects more than 90% of employed people, making it practically universal for most families in the country. Given the high level of household debt, this measure is expected to significantly ease the financial burden for millions of households.
Finance Minister Dario Durigan, who succeeded Fernando Haddad, emphasized that the proposed 20% limit will not deplete the fund or jeopardize its stability. He said the government aims to balance the interests of workers with the long-term resilience of the system. It has already been announced that around 7 billion euros will be allocated to support at least 10 million people as part of this initiative. Labor Minister Luiz Marinho has also highlighted the importance of such measures to stabilize the labor market and strengthen public trust in government institutions.
Terms and details of the program
As part of a new package of measures aimed at reducing household debt, the government is proposing not only partial FGTS withdrawals but also additional tools for debt restructuring. According to RUSSPAIN.COM, more than 30 million residents will be eligible for the program, which offers debt discounts of up to 90% and a reduced interest rate of just 2.5% per annum. Banks will receive state guarantees via a special fund, which is expected to encourage lenders to lower interest rates and offer more favorable terms to borrowers.
As an example, the finance minister cited a scenario where a debt of 10,000 euros with a high interest rate becomes almost impossible to repay. After discounts and new conditions are applied, the outstanding balance could drop to 1,000 euros, and monthly payments would become manageable for most families. Experts believe this approach could not only reduce the level of overdue loans but also improve financial literacy across the population.
Impact on the labor market
The new rules are expected to have a significant impact on the labor market and employment levels. Allowing people to tap a portion of their savings to repay debt may increase worker mobility and reduce the risk of job losses due to financial difficulties. Moreover, such measures could help build trust in public institutions and make formal employment more attractive.
Similar initiatives aimed at supporting the most vulnerable groups have already been implemented in Spain. For example, in Castellón, a network that exploited migrants in harsh conditions was recently uncovered, leading to a reassessment of approaches to protecting workers’ rights. You can read more about how such events affect the labor market in the article about the fight against labor exploitation in Castellón.
Context and prospects
In recent years, Spain has faced rising household debt, pushing authorities to seek new solutions to support citizens. Debt restructuring programs and partial withdrawal of savings are becoming more in demand, especially amid economic fluctuations and changes in the labor market. According to Folha de S. Paulo, similar measures have already proved effective in other countries, helping to reduce overdue loans and enhance the financial stability of households.
Recalling recent events, it is worth noting that in 2025 Spain had already introduced temporary support programs for borrowers facing a sharp rise in interest rates. At that time, the government provided loan guarantees and subsidized part of the payments for the most vulnerable groups. These measures helped stabilize the market and prevent mass defaults. The new package of initiatives related to FGTS continues this approach, offering more flexible and targeted solutions to address debt burden.
