IPREM increase in 2023

In recent years, the debate on raising the IPREM (Indicador Público de Renta de Efectos Múltiples) has gained momentum in Spain. The IPREM is an index used to calculate the minimum insertion income, scholarships and student grants, subsidies and various social benefits.

Since its creation in 2004, the IPREM has undergone several revisions and adjustments, but its level remained virtually unchanged from 2017 to 2022. In this context, it has been updated year after year to ensure greater equity in access to public services and improve the situation of people in vulnerable situations.

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What is the IPREM?

The IPREM is an index that serves as a reference to determine the income level of a person or family and thus establish whether or not they are eligible for state social assistance and benefits.

The IPREM level is set by the government every year based on macroeconomic variables of the country’s economy. These variables include inflation as one of the determining factors.

It should not be confused with the SMI (Minimum Interprofessional Wage), since this is only limited to the calculation of wages and salaries.

The government has decided to set the IPREM for this year 2023 at 600 euros per month, according to Law 31/2022 of December 23. This represents an increase of 3.6% over last year’s IPREM. The values were as follows:

For daily calculation: 20 euros.
For monthly calculation: 600 euros.
IPREM for the annual calculation at 12 payments: 7,200 euros.
IPREM for the annual calculation at 14 payments: 8,400 euros.

It should be noted that many economic analysts consider this increase in the IPREM to be insufficient for it to fulfill its true function. The existing gap between the SMI and the IPREM is very large; there are many people whose income does not reach the SMI, but is above the IPREM, which does not allow them to receive benefits either.

Similarly, the calculation of amounts for the unemployed also lags behind in a context of rising inflation. The year 2022 closed with an inflation rate of 5.7% according to INE’s own data.

In which cases is the IPREM used as a reference?

The IPREM is used as a reference for calculating a wide variety of social benefits and allowances in Spain. Some of the most common cases are:

Student scholarships. The IPREM is the reference for determining the amount of student aid, such as university grants, mobility grants or aid for school supplies.
Unemployment benefits. This indicator is used as the basis for unemployment or unemployment benefits.
The Minimum Insertion Income (Renta Mínima de Inserción). It is a financial benefit for people who cannot cover their basic needs with their current income. The IPREM is used as a reference to determine the maximum income to be eligible for this benefit.
Housing assistance. This indicator is also the basis for determining the maximum income to be eligible for housing subsidies, such as rental subsidy plans.

There are many other cases, these are only the most common.

How is the IPREM of a family unit calculated?

To make this calculation, the income of all members of the family unit must be added together. This amount cannot be more than 2.5 times the IPREM for families with 3 members, or 3 times the IPREM for families with 4 or more members.

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