Many people in Spain believe the country’s Socialist government offers too many benefits which discourage some from working. Does living off the State really pay off?
A common criticism of the Spanish right is that the leftist coalition government has increased state benefits to such an extent that it disincentives work.
Often this is expressed as people living off paguitas, a diminutive of the word pagas in Spanish, which means payments. However, it is understood to refer more specifically to welfare benefits or state aid, which in Spanish can also be called subsidios, prestaciones or ayudas.
Paguitas is often used in a colloquial, disapproving manner to refer to people who ‘live off’ benefits, whether true or not.
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It’s certainly a widespread belief in Spain.
Interviewing members of the public on the topic, Spaniards told Antena 3 that “these days, it’s very easy to get benefits without really needing them. We live in a society of slackers,” says one woman.
Another man claimed that “the country would function better if people got to work and there were fewer handouts.”
Even though the minimum wage has practically doubled since the Socialists took over in 2018 (in 2026 it stands at €1,221 per month in 14 yearly payments), Pedro Sánchez’s government has also increased state benefits significantly.
Spain’s Ingreso Mínimo Vital (IMV) is an allowance available to vulnerable households to provide them with a minimum monthly income. It is a tiered system, and the amount depends on the number of people in the family.
The IMV, which has risen by 11.4 percent this year, means that a family of two adults and two children can receive €1,393 a month.
However, some say that increases in IMV are now approaching wage levels of millions of workers across Spain. In some cases, workers see that the benefits received by many households exceed their own wages.
READ ALSO: Salaries close to the minimum wage are now the most common in Spain
With the latest increases to the Minimum Living Income (IMV) on the table, 25 percent of employees now earn the same or less than a large household receiving the updated IMV.
At the same time, a quarter of workers earn an average wage that is below this amount, not exceeding €1,400, according to INE statistics. And even in the two lowest deciles of the wage structure, earnings barely reach €1,280.
This comes as more than 600,000 people in Spain currently hold two jobs just to make ends meet.
In April, IMV payments reached 846,454 households, 581,054 of which include children. The state benefit supports 2,583,014 people, according to the latest statistics published by the National Social Security Institute (INSS).
The average monthly payment is €540.60 per household, Ministry figures show.
Critics suggest that the rises in IMV have outpaced wage growth to such an extent that it could, in certain circumstances, mean that working is no longer worthwhile.
And it’s not just Spanish right-wingers coming at this from a purely political or ideological angle, experts now identify practical problems with the system.
The problem with Spain’s welfare system is “the lack of sound design”, Gregorio Izquierdo, Director of Spain’s Institute of Economic Studies, said in the Spanish press.
“That is what really sets us apart from the rest of Europe, because here we have a system of benefits that overlap and have no impact on the labour market, which is what they should be designed to do,” he notes.
“As they overlap with one another, they result in a level of social income higher than that of the labour market itself, with the risk of discouraging” people from working.
Although most of these benefits are tied to a commitment to look for work, a recent report from the Independent Authority for Fiscal Responsibility (Airef) suggests that the IMV acts as a disincentive to employment and reduces the likelihood of working by 12 percent.
The body notes that this disincentive rises to over 20 percent among those under 30, single-parent households, and when benefit recipients receive higher payments.
So, there is evidence that rising minimum income levels in Spain mean some workers or families might be better off on benefits than working for a wage.
However, this is in specific cases of large families. What is clear, however, is that IMV levels overlapping with wages does disincentivise some workers in the Spanish economy.
