Innovative formulas for the compatibility of unemployment benefits with work-based learning and income

This technical support project aims to assist the State Public Employment Service in Spain (SEPE) to (i) take stock of the existing unemployment support and the work incentives engendered by the Spanish unemployment insurance system, (ii) compile relevant international experiences in combining work and unemployment benefits, and (iii) assess the suitability of different reform options in Spain, taking into account international good practice. 

Context 

Following the entry into force of Royal Decree-Law 2/2024, contributory unemployment benefits in Spain have been made compatible with full-time and part-time paid employment from the 10th month of unemployment, for a maximum possible duration of 180 days, subject to some conditions. This mechanism is known in the Spanish context as the employment support supplement (Complemento de Apoyo al Empleo – CAE). The fundamental aim is to generate new incentives for the labour market re-integration of long-term jobseekers, by providing additional income support for those who have recently joined the labour market after a protracted unemployment spell.  This TSI project will carry out a thorough assessment of the existing reform, and identify ways to further fine-tune and improve its adequacy, coverage and effectiveness – based on available (EU and international) good practice.

Support delivered

Technical support is being delivered through the following outputs: (i) Analytical report on the Spanish labour market, the existing system of unemployment support (with a focus on its contributory component), and the work incentives it engenders, (ii) International workshop and peer-learning report on priorities and challenges for combining earned income with benefit receipt, drawing from EU and OECD good practice, (iii) Report on reform options, including adaptation of key features of the current CAE design to enhance take-up, work incentives and avoid benefit dependence, (iv) Series of trainings to build capacity on impact evaluation of income support programmes, (v) Impact evaluation framework, to estimate the impact of the CAE reform and possible improvements, and (vi) Final event to present the reform options and key findings to stakeholders within the national employment system.

Expected results

The project is expected to strengthen SEPE’s capacity to evaluate the impact of the CAE reform, and introduce meaningful improvements, to enhance the financial incentives for UI claimants to earn income alongside contributory unemployment benefits.