Comprehensive Guide to Early Retirement, Maternity, and Disability Benefits in Spain

Posted on Aug 20, 2024 in Law & Jurisprudence

Early Retirement in Spain

Assumptions

1. Early retirement can be established by royal decree, reducing the retirement age for certain professions with dangerous work activities. However, the retirement age cannot be lowered to before age 52.
2. Workers with a disability degree equal to or greater than 65% may also be eligible for early retirement, provided they meet all other eligibility requirements for a retirement pension.
3. Workers with a disability grade equal to or greater than 45% may also be eligible for early retirement if their disability is recognized by law and there is evidence that it reduces their life expectancy.
4. Workers who began contributing to the social security system before January 1, 1967, may be eligible for early retirement after age 60, provided they have met the required minimum contribution period. There are two scenarios:
   • Voluntary Early Retirement: A reduction of 8% is applied to the pension for each year the worker retires before the full retirement age.
   • Involuntary Early Retirement: Workers must have contributed for at least 30 years and their pension is reduced by 6% for the first year and 7.5% for each subsequent year.
5. Early retirement after age 61 is possible for workers who meet specific requirements:
   • A minimum contribution period of 30 years.
   • The cessation of work was not due to the worker’s own volition.
   In these cases, the pension is reduced by a percentage for each year the worker is short of 40 years of contributions:
   • 40 years or more: 6% per year
   • 38-39 years: 6.5% per year
   • 35-37 years: 7% per year
   • 30-34 years: 7.5% per year
6. Partial Retirement: This option is available to workers who meet all the requirements for a contributory retirement pension except for age. Two conditions apply:
   • Be at least 61 years old.
   • Have reached the age of 6 years prior to the date of partial retirement.
7. Collective Agreements: When collective agreements provide for early retirement ages below 65 as a social improvement, the company compensates for any reductions in the pension.
8. Retirement at 64 as Employment Promotion: In this case, pension reduction coefficients do not apply, and the company must have established in the agreement or a required agreement to replace retired workers. The duration of contracts for substitutes must be at least one year.

Maternity Benefits in Spain

Protected Situations

• First birth
• Adoption
• Foster care placement

Requirements

• The worker must be insured and registered with the Social Security system. The Organic Law of Equality eased the contribution period requirements.
• Contribution Periods:
  • Under 21 years old: No contribution period required.
  • Between 21 and 26 years old: 90 days of contributions in the past 7 years.
  • 26 years old and above: 180 days of contributions in the past 7 years and 360 days throughout their working life.

Content of Benefits

• Maternity allowance is a subsidy equivalent to 100% of the base salary.
• The contribution base is divided by 30 for monthly payments or by the number of days worked for daily payments.
• In the case of multiple births, a special allowance is granted for each child from the second one onward, in addition to the allowance received for the first child.

Dynamics

Birth

• The right to maternity benefit begins on the first day of the rest period.
• Duration: 16 weeks, extendable by 2 more weeks for each child from the second one onward in the case of multiple births.
• The first 6 weeks are mandatory rest for the mother. In case of her death, the father can take the leave before or after delivery.
• The remaining 10 weeks can be taken by the mother or the father, either partially or completely, and even simultaneously.
• For premature babies who remain hospitalized, the rest period can begin at the request of the mother or, failing that, the father, once the child is discharged.
• When the child’s hospitalization exceeds 7 days, the rest period is extended for as many days as the child remains hospitalized, with a maximum of 13 additional weeks.

Adoption or Foster Care

• Duration: 16 weeks, extendable by 2 more weeks for each adopted child.
• The adopted or fostered child must be at least 6 years old, except for children under 18 with disabilities, difficulties in social integration, special circumstances, or those coming from abroad.
• In the case of international adoptions, when it is necessary for the parent to travel to the child’s country, the leave period can begin 4 weeks before the adoption.
• Part-time leave is possible with an agreement between the employee and the employer.

Termination of Benefits

• Completion of the maximum leave duration.
• Voluntary return to work.
• Death of the child, disappearance, or termination of the rest and delivery period.

Grounds for Suspension

• Engaging in any work activity or self-employment, unless there is an agreement with the employer.
• Acting fraudulently to obtain or retain the benefit.

Temporary Disability Benefits in Spain

Eligibility

• Workers are eligible for temporary disability benefits from the day after the work-related injury or illness occurs.
• Payment Responsibility:
  • First 3 days: No entitlement to benefits.
  • From day 4 to day 15: Paid by the employer.
  • From day 16 onwards: Paid by the Social Security system.

Duration

• Maximum duration: 365 days, extendable for another 180 days if it is presumed that the worker can return to work after further recovery.

Termination of Benefits

• Expiration of the legally established deadlines.
• Medical discharge, either due to recovery or a declaration of permanent disability.
• Recognition of entitlement to other benefits.
• Death of the beneficiary.
• Unjustified absence from medical examinations by the mutual insurance company or the INSS.

Grounds for Suspension

• Acting fraudulently to obtain or retain the benefit.
• Engaging in self-employment or paid employment while receiving benefits.
• Unreasonably refusing the prescribed treatment.

Permanent Disability Benefits in Spain

Eligibility

• Permanent disability benefits begin on the day the INSS issues a ruling.
• Payment Responsibility:
  • Disabilities derived from common contingencies: INSS
  • Disabilities resulting from occupational contingencies: Mutual insurance company or INSS, depending on the employer’s choice of insurance provider.

Duration

• Permanent disability benefits are lifelong.
• Upon reaching the age of 65, the benefit is typically renamed as a pension.

Grounds for Cancellation

• Acting fraudulently to obtain or retain the benefit.
• The declaration of permanent disability is due to or aggravated by the unreasonable refusal or neglect of medical treatment.
• Rejection or abandonment of prescribed treatments for the permanent disability.

Causes of Extinction

• Death of the beneficiary.