According to the General State Accounts (CGE) for 2024, which have been recently published by the Directorate-General for Budget (DGO), spending on unemployment benefits amounted to 1.5911 billion euros in 2024, reflecting an increase of 17.3% compared to the previous year.
The CGE report explains that this rise is primarily due to a 170.1 million euro (+16%) increase in unemployment benefit expenses, an additional 52.1 million euros in spending on wage guarantees, and a 11.3 million euro rise in wage compensation for temporary contract suspension (traditional ‘lay-off’).
“The increase in expenditure reflects, on one hand, some deterioration in the labor market. Although this deterioration isn’t apparent in data from the National Statistics Institute concerning the unemployed population aged 16 to 74, it is evident in a 20.2% reduction in job offers and a 5.8% increase in registered unemployment at the Institute for Employment and Vocational Training seeking new employment,” the document states.
This situation is compounded by the higher percentage of unemployed individuals receiving unemployment benefits—52% in 2024 compared to 49.6% in 2023—which led to a 16% rise in their numbers. Additionally, the average unemployment benefit increased by 4.5%, reflecting higher remuneration per worker, notably due to rises in the minimum wage, the CGE notes. It concludes that “the combined effect of beneficiary growth and increased benefits determined the 16% rise in unemployment benefit expenses.”
The specific unemployment benefit granted for delayed wages also increased by 24.9% year-on-year in 2024. Despite this increase, the financial impact was minimal (1.7 million euros).
Conversely, spending on social unemployment benefits decreased by 2.07%, driven by a 10.1% reduction in beneficiaries in the subsequent scheme, helping to mitigate the overall increase in total unemployment benefit expenses in 2024.
According to the CGE, the rise in spending on wage guarantees for settling debts to employees of insolvent or economically distressed employers nearly doubled. Meanwhile, ‘lay-off’ measures affected 36.4% more workers in 2024 than in 2023.
