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Incompatibilities- Compatibilities

Can I be retired and work at the same time?

The general rule is that the pension is incompatible with being employed or self-employed and being registered with the social security system. However, there are a number of exceptions:

  • Partial retirement allows the worker, in agreement with their employer, to reduce their working hours by between 25% and 50% and to receive the retirement pension in inverse proportion to the reduction in working hours. If the worker has not reached regulatory retirement age, their company must arrange a relief contract with another worker.
  • Active retirement makes it possible to combine the retirement pension with a full-time or part-time job as an employee or self-employed person, as long as the retirement has taken place after the normal retirement age and with a percentage applicable to the regulatory base of 100% for having a full career of contributions. During active retirement, 50% of the pension is paid. However, if the activity is carried out on a self-employed basis and proof is provided that at least one employee is employed, the amount of the pension compatible with work will reach 100%. .
  • Flexible retirement allows a person who is already a pensioner to start a part-time job with a reduction in working hours of between 25% and 50% of the normal working hours, and to combine this with the pension they were receiving, reduced in proportion to the percentage of working hours worked part-time.
  • The retirement pension is also compatible with self-employment if the total annual income does not exceed the amount of the annual minimum professional wage.
  • The contributory retirement pension can also be combined with the development of an activity of artistic creation for which income is received from the ownership of intellectual property rights.

Furthermore, the employer's retirement pension is compatible with merely maintaining ownership of the business or commercial establishment, so long as they do not carry out any work.

For personalised information, it is advisable to go to any of the Social Security Assistance and Information Centres (CAISS).

Can I work if I am retired?

The general rule is that receiving a pension is incompatible with undertaking work either for another person or as a self-employed person or with activities carried out for the Public Administrations.

There are some exceptions to this rule: the retirement pension is compatible with the undertaking of: 

  • Part-time work under the terms established for  flexible retirement. The total sum of the retirement pension will be reduced  by an amount inversely proportional to the reduction applicable to the day's work.
  • Self employed work, the total annual income from which does not exceed the annual Minimum Professional Wage (SMI).
  • Any work for another person or as a self-employed person carried out by the pensioner, provided they  started to draw the pension at the statutory age (without bonuses and not early) and the percentage applicable to the respective Base Pension for the purposes of determining the sum of the pension   reaches 100%. As a general rule, the sum of the pension will be equivalent to 50% of the amount of the pension.

In any case, the pensioner  should  let the management entity know that they are going to start work.

If a retired person is offered a part-time job, how many hours can they work to still receive the pension?

If the worker enters into a part-time work contract, within the legal reduction limits set forth for "flexible retirement", his retirement pension will be reduced inversely proportionate to the reduction applied to the working hours. If he works less than 50% or over 75% of his working hours, his pension will be suspended.

In certain circumstances, as from 17/03/2013, it is possible for workers to reconcile their retirement pension (once it is down to 50% of its full amount) with a full-time or part-time job, with no constraint on the number of working hours.

If I pay contributions to the general regime and the self-employed workers regime, do I have the right to two retirement pensions?

They can be entitled to two pensions, as long as they meet the individual requirements of each scheme. If they are not affiliated or assimilated to any of the schemes when retiring, the contributions shown in each of them must have overlapped for at least 15 years.

In the event that a pension is not granted in one of the schemes, the certified contribution bases in the latter may be added to the contribution bases in the scheme in which pension eligibility exists, only to determine the regulatory base, as long as the sum of the bases does not exceed the maximum contribution limit in force at any given time.

Is the retirement pension compatible with owning a business?

The retirement pension is compatible with owning a business and the functions attached to ownership, as a result of which it is necessary to delimit the functions attached to ownership in accordance with commercial regulations on employer activity.

In principle, the business owner can perform any relevant or necessary function for achieving their objectives, even if they normally use the help of other people, either because they cannot or do not want to act personally, since the ownership of a business or company does not require the employer to carry out a business activity directly and personally. All that is necessary is that it is carried out in their name, i.e. so that legal relationships with third parties generated are imputed to them as well as all the rights and obligations produced, with the owner assuming the business's risk and expense.

Everything related to the management, administration and normal running of the business must be deemed an incompatible activity with the RETA retirement pension for both the individual employer and the de facto employer of a trading company, as this will give rise to affiliation in the Social Security system possibly resulting in, by way of example, the signing of contracts in general, general wages agreements, the company's representation at and outside of trials, the signing of guarantees...

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