Carmen Vidal, 35, was a receptionist at a hotel in Palma until it closed for a complete refurbishment in February 2026. She has about 13,500 € of contributory unemployment benefit outstanding. She wants to open a small pilates studio in Santa Catalina and has already asked for quotes: 7,200 € for second-hand reformer machines, 2,300 € for building work and raised flooring, 1,400 € for the licence and fees. A friend who set up two years ago told her that the self-employed "flat rate" and the lump sum "cannot be combined, because they are two forms of help for the same thing". Carmen wants to know whether that is true before she files anything.
It is not. They are two different measures, from two different bodies, with two different purposes. But each has its own traps, and getting the sequence wrong can cost you one of them.
Two bodies, two different things
| Reduced contribution ("flat rate") | Lump sum | |
|---|---|---|
| Who grants it | The Social Security General Treasury | The Servicio Público de Empleo Estatal (SEPE), the Spanish state employment service |
| Rule | Art. 38 ter of Law 20/2007 | Art. 296.3 of the General Social Security Law and art. 34 of Law 20/2007 |
| What it is | A reduction in what you pay as your self-employed contribution | Your own unemployment benefit paid in advance |
| When you apply | At the time of registering with the RETA | Before registering with the RETA |
| How long it lasts | Twelve months, extendable by another twelve if earnings do not reach the minimum wage | It is paid in one go, with possible monthly payment of the rest |
| Central requirement | Not having been registered in the previous two years | Having contributory benefit outstanding and not having registered yet |
The reduced contribution is not money you receive, it is contribution you stop paying. The lump sum is money you receive, but it is your own unemployment benefit paid early. Neither rule excludes the other: article 38 ter does not mention unemployment, and article 34 does not mention contribution reductions.
How the reduced contribution works
Article 38 ter of Law 20/2007 establishes, for anyone registering for the first time or who has not been registered in the immediately preceding two years, a reduced contribution for common and occupational contingencies during the twelve full calendar months following registration. The amount is not in the law: it is set every year by the General State Budget Act. That is why we do not give it here.
After those twelve months, another reduced contribution can apply for a further twelve months if annual net earnings are below the annual statutory minimum wage. For that second period you have to file a declaration that you do not expect to exceed it, and if in the end you do, the contribution is adjusted in proportion.
The details of who qualifies and who does not are in the guide to the self-employed flat rate.
Carmen's timetable, step by step
With both measures in play, the order would be this:
- Lump-sum application to the SEPE, with the project report for the studio and the quotes: 7,200 + 2,300 + 1,400 = 10,900 € of investment.
- The SEPE's decision. If it approves it, Carmen receives at most the present value of her outstanding benefit, capped at the justified investment. Here, 10,900 €.
- Registration with the RETA (the special Social Security scheme for self-employed workers) with a date after the lump-sum application, applying at that same moment for the reduced contribution. Article 38 ter.3 requires it to be applied for "at the time of registration".
- Start of the activity within one month of receiving the payment, and accounting for the investment to the SEPE within the same period.
- The rest of the benefit. Of the 13,500 € outstanding, about 2,600 € has not been capitalised. It can go to the monthly contribution subsidy provided for in rule 2 of article 34.1.
- Month twelve. If she expects earnings below the minimum wage in the second year, apply for the second reduced contribution before that period begins.
If Carmen registers without ticking the reduced contribution, article 38 ter.3 does not provide for a later application for the first period. And if she had already been registered in the two previous years, she will not be entitled to it. If she enjoyed it on an earlier registration, the required period off the register rises to three years (art. 38 ter.4). Reviewing your registration history before applying avoids a surprise with the first contribution.
The delicate point: the contribution subsidy with a reduced contribution
This is where the two measures touch. Rule 2 of article 34.1 says that the monthly contribution subsidy is fixed and corresponds to the worker's full contribution at the time the activity starts, unless it is lower than the contribution on the minimum contribution base; in that case, the latter is paid.
With a reduced contribution, Carmen's contribution at the start is lower than the one that would correspond to the minimum base. A literal reading of the rule would mean that the subsidy is calculated on the contribution on the minimum base, not on the reduced contribution. We do not know of any published SEPE guideline that confirms or rules this out in general, so the specific figure is the one shown in the decision. The prudent course is not to count on a particular amount until you have it.
What can be said is that the subsidy uses up days of benefit and is paid only while Carmen remains registered. If she deregisters, it stops. How the rest is calculated is in how much would my lump sum be?
If you would like us to review the timetable before you register, you can send us the decision granting the benefit and your registration history through the unemployment benefit and self-employment form.
What makes you lose one or the other
The ways of losing them are independent. It is worth keeping them in view:
- Reduced contribution. It ends if Carmen deregisters from the RETA during either of the periods (art. 38 ter.4). Taking on employees does not make her lose it: paragraph 7 expressly allows it.
- Lump sum. It becomes undue if it is not used for the investment or is not accounted for in time (art. 7 of Royal Decree 1044/1985). Its IRPF (Spanish personal income tax) exemption depends on keeping the activity going for five years, as we explain in is it taxed in the income tax return?
- Both. An early closure affects them at the same time: the reduced contribution ends, the contribution subsidy stops and the exemption for the lump sum is at risk.
And with compatibility or suspension?
The reduced contribution does not clash with the other two routes either. Someone who combines the benefit with the activity for 270 days can have the reduced contribution at the same time, if they meet its requirements. And so can someone who registers without applying for anything, with the benefit suspended. In all three cases, the reduced contribution is applied by the Treasury regardless of what the SEPE decides.
The choice between capitalising, combining or suspending is compared in can I draw unemployment benefit and be self-employed? If the activity is going to be carried on through a company, article 38 ter.9 extends the reduced contribution to partners in capital companies who are in the RETA, and the lump sum has its own company route, described in can it be used to join a company?
The contribution Carmen will pay when the reduction ends will depend on her net earnings: the guide on contributions based on real income explains the bands, and the one on the first year as self-employed the tax calendar that runs alongside it.
How the reduced contribution, the lump sum and the other start-up steps fit together is described on the Salama Tax page on moving from unemployment benefit to self-employment.