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Welfare and Institutional Definition Stage (1900 - 1962)

This stage is characterised by the creation and generalisation of social insurances which, in their beginnings, were the result of protection instruments and mechanisms that the worker movement had been developing in the form of mutualism and through the drawing up and creation of regulations and institutions that covered the benefits for all workers which, up to those times, were only granted to unionised workers, outside the scope of the State. In this stage, the following milestones are worthy of mention:

Enactment of the Work-Related Injuries Act

Industrial development and the increasing mechanisation of productive processes caused a significant increase in work-related injuries, with total abandonment of workers and their families.

The aforementioned law, approved on 30 January 1900, defined a work-related injury as "any bodily injury suffered by an operator during or as a result of carrying out employed work".

It declared, for the first time, the direct and objective responsibility of companies in injuries suffered by their workers and promoted the institution of insurance, but the compulsory nature on behalf of the employer and in general did not appear until 1932.

Creation of the National Welfare Institute (INP)

In 1908 the National Welfare Institute was created. Its most remarkable achievement would be the putting into practice of a system of subsidised freedom which aimed to find the balance between the freedom of the insured parties to agreeing an insurance policy and the responsibility for coverage of risks by the State.

The Appearance of Compulsory Worker Retirement

In 1919 Compulsory Work Retirement was created, managed by the INP and intended for wage-earners between the ages of 16 and 65 whose pay did not exceed a certain limit. This insurance protected old age by considering it to be a disability due to reasons of age.
The funding was mixed, with involvement of companies and the State.

Unification and Coordination of Social Insurances

Over the period from 1932 to 1935, the government of the Second Republic made the INP responsible for a project to unify and coordinate pre-existing social insurances, which never came into fruition and could not be implemented as a consequence of the Spanish Civil War. This project envisaged an occupational Social Security system that was integrative and based on participatory management.

Family Benefits

A 1938 Bases Act founded a compulsory family benefits system. This new insurance extended its scope of application to all employed workers, in certain branches of production, and calculated its benefits according to number of children, their age and their working capacity.

Compulsory Old Age and Disability Insurance

In 1939, the old Worker Retirement became the old age benefit and eight years later, in 1947, this took the form of Old Age and Disability Insurance (SOVI), all of them managed by the INP.

Compulsory Illness Insurance (SOE)

In 1942 Compulsory Illness Insurance was created, intended for all "financially weak" labourers. It was organised based on a distribution system, paying their premiums in equal shares between employers and workers. This insurance disappeared with the introduction of health care into the Social Security´s protective action.

Labour Mutualism

From 1946 and owing to a quantitative insufficiency of social insurances, supplementary forms of social protection were set up in Spain, organised by occupational sectors. This process would culminate in 1954 with the publication of the General Regulations on Labour Mutualism. The benefits that would be granted were regulated (pensions and benefits) and optional (social welfare, credits, training programmes, etc.). Contributions were two-sided; payable by employers and workers.

To conclude the examination of this first stage, we should mentioned that the legal reforms introduced in this period shared a double characteristic:

  • minimum involvement of employers in the managing bodies.
  • low protective intensity as a result of the meager level of investment in social protection.
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