The sick leave or subsidy insurance is the most demanded by the self-employed. If you are one and you don’t know why they do it, we explain it to you in this article.
Reasons to take out a temporary disability insurance policy
Income and contribution mismatch
A self-employed person has a certain income, but today, his or her contribution is completely unrelated to this income.
What this means is that, although you can earn €2,000-3,000 per month as a self-employed person, or even more in some cases, 90% of self-employed people pay the minimum contribution (that is, in 2018, €920/month). This contribution base is the figure on which percentages are applied to determine the benefits provided by the Social Security.
If you are paid 75% of your contribution base, i.e., 663.30 euros per month, from which we must subtract the RETA contribution, your net income is less than 400 €. WE HAVE A PROBLEM.
Disability and long-term illness
Serious illnesses, unfortunately, are growing year after year. In our humble opinion, a subsidy insurance is not contracted for sick leave of one month or several weeks.
The reason must be that, some serious health problem, either due to an illness or an accident, keeps us away from our profession for a long period of time. We are thinking of a traffic accident, a cancer, a stroke… Those problems that prevent us from working and earning the money that our family needs.
It represents a tax benefit
We know you are always trying to reduce your tax bill. If you are self-employed and pay direct taxation, you have the right to deduct this insurance for tax purposes. up to 500 € per year.
Also employees with high incomes are not excluded.
If, on the other hand, you are a salaried employee/employee, and you receive more than the maximum Social Security contribution (for 2015 it is €3,606 per month), this means that in the event of sick leave you will receive a maximum of 75% of that amount.
So those people who have salaries above €50,000 per year, find themselves with a discoverage: which is the difference between the salary they receive every month and what the Social Security will pay them while on sick leave at most (€2,704 per month in 2015).
The importance of your family
Because you and your family are the most important thing, and it is our responsibility to make families aware of the benefits to which they are entitled and what gaps may exist in the various contingencies that may occur. If we are used to a certain standard of living with a certain income, we must ensure that, come what may, we will do our best to maintain it.
Social Security benefits for the self-employed
We leave here an attached file that we believe may be of interest, especially to those who are in the RETA, to analyze their particular situation, even with some practical examples.
We believe that our job is to advise, and as such we carry out personalized studies to calculate the lack of coverage and how to solve it. If you need us to explain all this in more detail, do not hesitate to contact us. If you want to know more about personal insurance, we leave you a link.
