Details of next year’s State budget have finally been agreed after weeks of negotiations between prime minister Pedro Sánchez and the leader of left-wing Podemos, Pablo Iglesias. The approval of Podemos is essential to Sánchez whose minority government has just 84 seats in the 351-seat parliament.

Assuming the budget is approved when debated by Deputies, these are amongst the changes which will apply from January 1, 2019.

The minimum wage will rise to €900 a month for a full-time employee working 40 hours a week, with plans for €1,000 a month by 2020. This applies to those who work on a 14-month basis (with double pay in August and at Christmas) while for those working on a 12-month basis, the minimum will rise to €1,050, or a pro-rata amount for part-time employees.

Those renting their homes will be better protected from next year with landlords able to demand only two months’ rent up-front as a deposit, and the minimum let to rise from three to five years. Town halls will be able to order landlords to reduce rents if they are considered to be “unreasonably high.”

The government will allow town halls to invest their budget surpluses in providing free nursery places for children up to two years old. With early education reported to improve academic performance, the government hopes this will work towards reducing Spain’s secondary school drop-out rate. Councils which have no budget surplus will be able to apply for grants to open free nurseries.

Income tax rates will increase for the higher paid and, although exact figures are yet to be announced, those earning more than €130,000 are likely be taxed two per cent more, rising to an extra four per cent for those on over €300,000.

The maximum level for cash transactions between businesses will be reduced from €2,500 to €1,000, but in the continuing struggle against money laundering, the €2,500 cap will be retained for private cash transactions, such as gifts from parents to children or the private sales of goods.

Diesel prices will come into line with petrol, and a 20 per cent grant will be available for domestic renovations which save energy. Paternity leave will double to eight weeks, and by 2021 will have reached parity with maternity leave at 16 weeks. Social security payments may be linked to actual income for the self-employed, while child benefit will rise from €291 a year to €473 in an effort to end reduce poverty.

Finally, a number of improvements for pensioners are planned “over time” which will see state pensions rise to at least 60 per cent of the national average salary. Non-contributory and minimum pensions will rise by three per cent per year, and all others will go up by the rate of inflation, which is presently around 1.6 per cent.