Pension and Retirement Lawyers
Retirement is the moment when, due to age, a worker is no longer able to carry out the tasks associated with any profession. At this point, the National Social Security Institute (INSS) will provide a public pension for life. However, they must meet a series of requirements. Here we will tell you everything you need to know about them.
What exactly is a retirement pension?
This is a financial benefit granted by the INSS whose purpose is to replace income from work from the moment when, due to age, the worker completely ceases to work.
In this respect, the INSS establishes that, in order to be eligible, a series of requirements must be met:
Having reached the ordinary retirement age. Before the last pension reform, this was 65 years of age. However, it is now progressively increasing until it reaches 67 in 2027. In 2021, for example, the ordinary legal retirement age is 66, although you can still retire at 65. However, you must have paid at least 37 years and 3 months of contributions.
Exceptions to the ordinary retirement age. Some collective agreements stipulate that workers covered by them may retire earlier without penalty. This is the case, for example, of miners or firefighters, whose professions involve greater risk.
Have paid contributions for the generic minimum period. This is 15 years. If the worker has contributed less and is not covered by any special consideration, he/she must apply for non-contributory benefits.
The causal event. For registered workers, this will occur on the day on which they cease their activity on reaching the established age. However, in the case of those who are in a situation assimilated to registration, it will be the day on which the application is submitted, unless they are on forced leave of absence (this will be the day on which they leave their post) or transfer outside the national territory (cessation of work). Lastly, if the worker is not registered, the triggering event will be the day on which the application is submitted.
Characteristics of the retirement pension
There are a number of other things you need to consider when it comes to your retirement. Let's take a look at them.
The amount of the retirement pension
The first is the amount. Please note that the amount you will receive once you stop working will be a percentage of your regulatory base. At present, the reference period is the period during the 24 years preceding the qualifying event (288 months).
If you would like to calculate the amount of your pension, add the regulatory bases for your last 288 months of work (these must first be updated with the applicable CPI) and divide them by 336 months. The resulting amount will be your regulatory base.
If you have worked for the maximum contribution period (36 years in 2021, but 37 years from 2027), you will receive 100% of your contribution base. However, if you have worked for less time (but more than 15 years), the value will be between 50% and 100%.
Generally speaking, receiving a retirement pension does not entitle the pensioner to work as an employee or self-employed person, or to hold any post or position in the public sector. This is with the exception of self-employment when the amount of the pension is lower than the minimum wage and the activity of professional members of a professional association. The same applies when the pensioner is covered by the flexible or partial retirement scheme.
Workers who have been registered can apply for a retirement pension from three months before the qualifying event occurs until three months after it occurs. On the other hand, those who are in a situation assimilated to registration or who are not registered will have to submit the application from the same day on which they acquire the right.
Once the application has been submitted, the INSS will have a maximum period of 90 days to resolve the application and notify the decision. When granted, it will accrue with a maximum retroactivity of 3 months from the date the application was filed.
Thereafter, the INSS will pay the worker's pension on a monthly basis, plus two extra payments in June and November. Obviously, this benefit is subject to personal income tax, so those who are entitled to it will have to file a tax return if necessary.
For its part, the retirement pension is for life. In other words, it is only extinguished after the death of the beneficiary. At that time, if circumstances permit, it may give rise to a widow's or widower's pension for the spouse.
Retirement pension problems
It is up to the INSS to decide whether a worker is eligible for retirement. This sometimes leads to controversy and disputes. If this is the case, the best way to protect your rights is to contact a lawyer who specialises in this type of matter. Only he or she can provide you with the advice you need and handle your application so that you can get your pension on the terms and conditions you deserve.
Our Employment Lawyers, specialised in Employment Law, will be able to offer you our professional services in the processing and claiming of your pension.
If you wish, in addition to being attended in our Law Firm in Madrid, we offer you the possibility of our Labour Lawyers attending you in our offices in Pozuelo de Alarcón and Majadahonda.