Date Published: 09/04/2024
More changes to pensions for self-employed workers to come in Spain
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Spain’s government has proposed that freelance workers who take partial retirement should have to wait an extra 5 years to claim 100% of their pension pot
The government of
Spain has put on the table a proposal to reform the partial retirement plan, a type of retirement option that is currently chosen by very few people due to the severe restrictions it places upon workers.
Under the new plan, the government will extend the partial retirement plan to all workers, which has long been one of the main demands of unions and employers’ organisations.
However, in order to do so, the Ministry of Social Security is proposing cuts and penalties for those people who can currently can combine work and pension, mainly the self-employed.
Under this reform system, self-employed ‘
autónomos’ in Spain would suffer. They would still be able to take active retirement once they reach the
legal retirement age, collecting a pension while continuing to run their business, but if the new rules are brought in the amount they receive would be considerably lower.
The existing rules of the partial retirement scheme in Spain mean that self-employed people who reach the minimum legal retirement age and have made their social security payments for the allotted length of time can retire but continue to work, receiving 100% of their pension as long as they have at least one employee working for them. If they do not have an employee, they receive 50% of their pension.
According to the text of the proposed changes that the Spanish government recently presented to the trade unions and employers, the self-employed would now have to wait at least 5 more years, until they reach the age of 70, in order to receive 100% of their pension, as it establishes an increasing percentage of pension compatible with their activity.
Once one full year has passed since reaching the legal retirement age, a self-employed person could work and retire while receiving 30% of their pension; after two years, this amount would rise to 40%; after three years it would rise to 50%; after four years, 75%; and after five years 100%.
In exchange, the requirement to have an employee under contract in order to receive 100% is eliminated. They will be able to access the bonuses paid for each year that retirement is postponed, which can amount to a cash payment of up to 12,000 euros or a 4% increase in their pension.
Both trade unions and employers’ organisations have criticised the proposed reform, which makes partial retirement much worse for the self-employed.
Cristina Estévez, representative of the union UGT, said “The Ministry has for the first time given us a proposal for early partial retirement, a proposal that falls far short of our expectations, which we consider to be a reduction in rights.”
What the unions were satisfied with is that the government has accepted their proposal to recover the multiplier coefficient of 1.5 for permanent discontinuous workers, so that their retirement will be improved.
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