The Government and social agents have signed a major agreement to guarantee the purchasing power of pensioners and ensure the sustainability of the public pension system.
The Consolidated Text of the General Law of Social Security, approved by Royal Legislative Decree 8/2015, will be modified soon, in the following ways:
I. New revaluation formula to maintain the purchasing power of pensions
– The maintenance of purchasing power is guaranteed through the increase in pensions on January 1 of each year in accordance with the average annual inflation registered in November of the previous year.
– It is guaranteed that in the case of negative inflation rates, pensions would not undergo any reduction, leaving that year unchanged.
II. Measures to favour the voluntary approach of the effective age with the legal retirement age
1. Voluntary early retirement
– The reduction coefficients (which will be monthly from now on) are reviewed in order to encourage the voluntary shift of the retirement age and to give a more favourable treatment to longer contribution careers
– As an exception, the reduction coefficients corresponding to retirement due to causes not attributable to the worker will be applied in those cases in which the person who voluntarily retires early has been receiving unemployment benefit for at least three months.
2. Involuntary early retirement
– To causes of contractual termination giving the right to access this type of retirement mentioned in article 207.1 LGSS (General Social Security Law), the rest of termination causes for objective reasons and the voluntary termination by the worker are added, in the cases provided for in articles 40.1, 41.3, 49.1.m) and 50 ET (Statute of Workers Rights).
– The applicable coefficient on the pension is determined by month before retirement, not by quarter.
– In relation to the two years immediately prior to ordinary retirement age, the same coefficients are applied in the determination of the involuntary early retirement pension as in the voluntary modality in those cases where the new coefficient is more favourable than the one in force up to now
– Additionally, the reduction coefficient corresponding to each of the six months prior to the ordinary retirement age is lowered with respect to those proposed for voluntary retirement.
3. Delayed retirement
– It is agreed to apply the exemption from the obligation to contribute for common contingencies, except for temporary disability, as of the ordinary retirement age that corresponds in each case.
– It is agreed to improve the incentives for the prolongation of the professional career beyond the ordinary retirement age.
– Three types of incentives are offered, to be chosen by the worker, for each year of delay:
• An additional percentage of 4 percent (this additional percentage will be added to the corresponding one according to the number of years of contributions and will be applied to the respective regulatory base in order to determine the amount of the pension).
• A lump sum based on the amount of the pension and rewarding the longest contribution careers.
• A combination of the above options.
4. Active retirement
A condition for accessing this type of retirement is required for at least one year after reaching the ordinary retirement age.
5. Forced retirement
It is agreed that it is not possible to establish conventional clauses that provide for the forced retirement of the worker for reaching an age of less than 68 years.
6. Reduction in the contribution for workers over 62 years of age in IT processes
In order to favour the permanence of older workers in the labour market, it is agreed to establish a 75 percent reduction in employer contributions to Social Security for common contingencies during the temporary disability situation of those workers who had reached the age of 62 years.
III. New contribution system for real income and improvement of social protection in the Special Regime for Self-Employed Workers
– It is agreed to establish a contribution system based on the real income declared for tax purposes. The implementation of this modification will be made from January 1, 2022, without producing economic effects until 2023, in order to allow the most adequate definition of them and the necessary technical adaptations by the Public Treasury and the Social Security itself.
– The self-employed who have declared tax returns lower than the current minimum contribution base will contribute for those ones.
– Self-employed workers are expected to provisionally choose their contribution base from the tranches that are determined by law based on income forecasts, with the possibility of modifying their choice six times throughout the year to adjust it to their income.
– If there are differences once the annual regularization has been made, the self-employed worker must proceed to credit his account in case of having contributed less than his due, and may request a refund if the contribution made was higher.
IV. Other measures to improve the management and quality of protective action
1. Widowhood of civil partners
Within a period of six months, a review of the regulatory framework for access to the widowhood pension of civil partners will be addressed within the framework of social dialogue in order to put on par their conditions of access to that of married couples.
2. Regulatory basis for temporary disability benefits in the cases of workers with a permanent-discontinuous contract
It is agreed to include in the Social Security legislation an express reference so that the daily regulatory base of the temporary disability benefit is calculated by dividing the sum of the contribution bases accredited since the last call to work, with a maximum of three months immediately prior to the event causing the event, between the number of calendar days included in the period.
3. Scholarship holders` contributions
– Within a maximum period of three months, the regulatory development provided for in the fifth additional provision of Royal Decree-Law 28/2018 will be carried out, so as to guarantee that the completion of training practices in companies, institutions or entities included in training programs , the realization of non-labour practices in companies and the realization of external academic practices under the protection of the respective legal and regulatory regulations, determine the inclusion in the Social Security system of the people who carry out the aforementioned practices, even if they are not remunerated .
– A 75 percent reduction in the Social Security contribution will be applied to these practices.
