Spain introduces basic income scheme to tackle poverty

Spain’s government has introduced a basic monthly income for struggling families amid the growing hardship caused by the outbreak of the new coronavirus.

The move announced on Friday was part of last year’s coalition agreement between socialist Prime Minister Pedro Sanchez and Pablo Iglesias, the head of the left-wing alliance Unidas Podemos (UP).

Iglesias said the crisis unleashed by the epidemic had forced the government “to speed up its implementation” of the measure.

“Today is a historic day for our democracy, when a new social structure is created,” Iglesias said.

The measure, which is expected to cost an annual three billion euros ($3.3bn), is aimed at ending extreme poverty, which affects about 600,000 homes and 1.6 million people.

It will guarantee an income of 462 euros ($512) a month for an adult living alone, while for families, there would be an additional 139 euros ($154) per person, whether adult or child, up to a monthly maximum of 1,015 euros ($1,126) for every home.

The funds will be allocated in line with other income, so anyone with a low-paid job would have their salary topped up to meet the threshold outlined on Friday.

The ministry for inclusion and social security said it would mean “that every home would have a guaranteed average annual income of 10,070 euros ($11,180)”.

The government said the measure was expected to benefit about 850,000 homes, affecting a total of 2.3 million people – 30 percent of whom are minors.

About 100,000 families would begin receiving the money on June 1, it said.

Rise in poverty

The coronavirus lockdown that started in mid-March has left hundreds of thousands of people jobless, triggering a rapid rise in poverty that has outstripped the 2008 global financial crisis.

Many families, particularly in Madrid, have for the first time found themselves forced to stand in line for food handouts at local churches and neighbourhood organisations.

Spain’s gross domestic product (GDP) is expected to contract by 9.2 percent this year due to the pandemic, while the unemployment rate is forecast to rise from 13.8 percent at the end of 2019 to 19 percent.

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