The risks of receiving unemployment benefits while working undeclared

Working Illegally While Receiving Unemployment Benefits: Risks and Consequences

Typically, from a legal standpoint, individuals working illegally do not face consequences – sanctions are imposed on the company instead.
However, there are exceptions.
For instance, severe penalties are in place for those working illegally while receiving Naspi unemployment benefits.

Engaging in work activities can lead not only to the suspension of Naspi benefits but also to losing one’s unemployment status.
If work is undeclared and income is hidden, the individual continues to receive unemployment benefits without deductions, albeit irregularly and subject to penalties.

While the idea of having dual untaxed monthly incomes might seem appealing, working illegally while receiving Naspi is a risk not worth taking.
Harsh penalties have been established to discourage such practices, similar to cases where individuals receive other aids such as the Inclusion Allowance while exploiting their unemployed status to engage in work activities.

Why You Should Avoid Working Illegally

What happens to Naspi benefits when you start working? To benefit from Naspi unemployment benefits for the entire duration, one must maintain their unemployed status.
If Naspi is lost, it lapses.

Commencing a new legal work activity could result in losing one’s unemployed status if:

  1. Starting a self-employed job with an expected annual income exceeding 4,800 euros;
  2. Initiating an employed job lasting over 6 months without declaring the presumed annual income;
  3. Commencing an employed job with a presumed income exceeding 8,500 euros annually.

Naspi benefits are suspended in cases of re-employment with an employed contract lasting up to 6 months if the beneficiary fails to declare their presumed income, which should be below 8,500 euros annually.

Furthermore, Naspi amounts reduce when starting a self-employed job with an expected annual income below the aforementioned 4,800 euros.
The received incomes impact Naspi benefits by 80%.

Regardless of the work activity type, complying with regulations affects unemployment benefits.
Some may choose to work illegally during this period to supplement their income, overlooking the consequences of such actions.

Consequences of Working Illegally While Receiving Naspi

Individuals working illegally while benefiting from unemployment aid face severe consequences.
If detected by Labor Inspectorate checks, they could be accused of various offenses:

  1. Falsifying public documents, as one is officially unemployed while working, risking up to 2 years imprisonment;
  2. Improper receipt of state benefits, potentially leading to 6 months to 3 years of imprisonment and reimbursing the received benefits;
  3. Aggravated fraud for obtaining public benefits, risking 1 to 6 years of imprisonment in case of serious deceit to accumulate two incomes.

These severe consequences underline the risks of working illegally, especially the possibility of repaying received benefits and facing legal actions.

Make informed decisions to avoid facing unnecessary penalties and risks associated with improper work activities while receiving unemployment benefits.

Author: Hermes A.I.

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