Social Security

History of the Social Security

The starting point of protection policies can be found in the Committee for Social Reform (1883), which was in charge of matters that could have an impact on the improvement and wellbeing of the working class. In 1900, the first social security system was created along with the Labour Accidents Act, and in 1908 the National Planning Institute appeared, which integrated the banks that managed social securities as they emerged.

In later years, the protection mechanisms resulted in a series of social insurances, including Worker Retirement (1919), Obligatory Maternity Insurance (1923), Forced Unemployment Insurance (1931),  Medical Insurance (1942), and Obligatory Old-Age and Disability Insurance (SOVI) (1947). The protection provided by these insurances was soon found to be insufficient, which led to the emergence of other protection mechanisms organised through workers' mutual funds, organised by employment sectors. The purpose of the benefits provided by these funds was to complete the already existing protection. Given the multiplicity of mutual funds, this protection system led to distribution between working population, caused financial imbalances and made rational and effective management very difficult.

In 1963, the Social Security Bases Act appeared; its main purpose was the implementation of a unified and integral social protection model, with a financial basis of distribution, public management and involvement of the State in the financing. Despite this definition of principles, many of which were included in the General Social Security Act of 1966, which has been in force since 1 January 1967, the truth is that the old contribution systems that were far removed from the actual salaries of workers still remained, with a lack of periodic revaluations and the trend towards unity was not achieved due to the survival of numerous overlapping organisations.

The 1972 Protection Action Financing and Perfection Act tried to correct the existing financial problems, but worsened them by increasing the protective action without establishing the corresponding resources that provided financial coverage. Therefore, it was not until the arrival of democracy in Spain, and the approval of the Constitution, that a series of reforms in the various fields that configure the Social Security system were introduced.

In fact, Article 41 of the Constitution states that the public authorities shall maintain a public social security system for all citizens, guaranteeing sufficient support and social benefits in situations of need, especially in the event of unemployment, and that the support and additional benefits shall be free.

The first major reform was the result of the publication of Royal Decree Act 36/1978, of 16 November, based on the Moncloa Pacts, which created a system of institutional participation of social agents favouring transparency and rationalisation of the Social Security promoting transparency and rationalisation of the Social Security, as well as establishing a new management system governed by the following organisations:

• The National Social Security Institute, to manage the economic provisions in the system.
• The National Institute of Health, for healthcare benefits (an organisation that would later be known as National Institute of Healthcare Management).
• National Institute of Social Services, to manage social services (an organisation that would later be known as Institute for the Elderly and Social Services).
• The Social Institute of the Navy, to manage social needs of sea workers.
• The General Treasury of the Social Security, as the single treasury of the system acting under the principle of financial solidarity.

During the eighties a series of measureswere implemented in order to improve and perfect the protective action by extending benefits for collective groups not covered and provide greater economic stability to the Social Security system. Some of the measures included the gradual equalisation process of baseline calculations and actual salaries, the revaluation of pensions depending on the variation of the consumer price index, the expansion of periods necessary to receive benefits and to calculate pensions, the simplification of the Social Security structure, initial separation of financing functions, so that the contributive benefits were financed with social contributions, while those of non-contributive nature would be covered in the general expansion. This process would enable the progressive generalisation of medical assistance.

During this decade, the Social Security IT Department was created, to coordinate and control the activities of IT services and data processing of the various Management Entities.

The 1990s brought a series of social changes that affected very diverse issues and influenced the Social Security System: changes in the labour market, greater mobility within the labour market, the integration of women into the workplace, etc., made it necessary to adapt protection to these new needs.

In 1995, the Toledo Pact was signed with the backing of all the political and social forces. This brought about important changes and established a roadmap to guarantee financial stability and future Social Security benefits.

The implementation of non-contributory benefits, the rationalisation of Social Security (implemented through the new Revised Text in 1994), greater suitability between benefits received and the exemption from contributions previously in place, the creation of a Reserve Fund for the Social Security, the introduction of flexible retirement mechanisms and providing incentives for extending working life, or measures to improve protection, in the case of smaller pensions, are evidence of the changes introduced from 1990 to date, within the scope of the Social Security.

In turn, during recent years the Social Security has also adapted to the emergence of new technologies and the increase of telematic services, with the birth and development of its website and the constant inclusion and optimisation of Internet-based services. In connection to this, the website has received several awards recognising the work that has been done, and we continue to encourage the continuous improvement of the services it offers to citizens.

In order to reward the work carried out since its inception, both the Social Security and its internal organisations have been given several awards, which recognize and consolidate the massive contribution it has made to social work throughout its existence.