Spain to spend €450 million on youth wage subsidies

But the Popular Party (PP) administration’s offer falls significantly short of the €1.3 billion that Ciudadanos had originally demanded for the so-called “salary complement,” a subsidy for the country's lowest earners.

If the pilot program is successful, it could be expanded in coming years

Due to budget restrictions – including renewed calls by Brussels to reduce the deficit in 2017 – the Labor Ministry will lower the amount to €450 million, spend it exclusively on a pilot program for under-30s, and try to finance the program with European funds.

The “salary complement” was Ciudadanos’ version of the basic universal income defended by the leftist Podemos. But recipients won't be sent a check: it is to be delivered through income tax relief instead.

However, Spain’s soaring public deficit forced the measure’s sponsors to gradually reduce the original amount and restrict eligibility to specific at-risk groups, such as unskilled youths or the long-term unemployed.

Ciudadanos is still asking for something closer to €1 billion, but sources at the Labor Ministry confirmed that in 2017, the initial amount will be €450 million.

If the pilot program is successful, it could be expanded in the coming years to include a wider range of beneficiaries, these sources said.

Although still at a very preliminary phase, the system envisions a baseline subsidy that increases as the recipient’s income grows, as a way to encourage people to work more. After a certain income threshold has been reached, the subsidy begins to shrink.

English version by Susana Urra.