The 2019 reform of Spain’s unemployment subsidy for those over 52 has nearly tripled recipients. This surge is set to cost the state almost €18 billion by 2030, raising concerns over the sustainability of public finances.
The Spanish government’s 2019 decision to relax access to the unemployment subsidy for people over 52 has triggered a dramatic surge in beneficiaries, placing unprecedented pressure on the country’s public finances. According to a recent report by Fedea, the number of recipients of this specific aid is projected to reach 458,890 by 2025, nearly triple the figure from 2005. This group now accounts for more than a quarter of all unemployment benefit recipients in Spain, a proportion that has doubled over the past two decades.
The reform, introduced under Pedro Sánchez’s administration, reversed austerity measures imposed in 2012 and lowered the eligibility age from 55 to 52. It also shifted the income assessment from household to individual, extended the subsidy until the standard retirement age, and increased the pension contribution base from 100% to 125% of the minimum wage. These changes have made the subsidy more accessible and generous, but at a significant fiscal cost.
Fedea’s analysis estimates that the expanded subsidy will generate an additional €17.9 billion in expenses for Social Security between 2019 and 2030. By 2030, the annual direct cost for the State Public Employment Service (SEPE) is expected to reach €1.8 billion, driven by both higher payments and a larger pool of recipients. The report highlights that, without the 2019 reform, the number of beneficiaries in 2030 would have been just over 214,000, compared to the projected 529,880 under the current rules.
This rapid growth in the over-52 subsidy comes despite a notable decline in Spain’s overall unemployment rate in recent years. The expansion of this aid is now seen as a structural challenge for the welfare system, especially as the population ages and more people become eligible for long-term support. The financial strain is compounded by the fact that Social Security has operated in deficit since 2012, raising questions about the sustainability of the system if current trends continue.
Spain’s situation echoes broader European concerns about the cost of social assistance in aging societies. In Catalonia, for example, authorities have recently allocated €30 million to identify families missing out on social benefits, aiming to add thousands to the welfare rolls by 2029—a move detailed in this report on targeted social aid expansion.
For context, the Spanish unemployment protection system consists of contributory benefits for those who have paid into the system and non-contributory subsidies for those who have exhausted their entitlements or do not qualify. The over-52 subsidy is unique in that it bridges the gap to retirement, allowing recipients to continue accruing pension rights. As the number of older jobseekers rises, the long-term fiscal impact of such policies is likely to remain a central issue for policymakers and the public alike.
