Spanish Social Security relies on a mixed system of funding as it is fed by very different means to gather the resources necessary to fulfil its obligations.
The resources for funding the Spanish Social Security System are constituted by:
- The progressive contributions of the State, that are allocated permanently in the General Budgets, and those agreed for special cases arising from exceptional situations.
- The payments from people required to make them.
- The amounts collected in concept of surcharges, fines or similar.
- The income, earnings or interest and any other product of its heritage resources.
- Any other income, without detriment to that stipulated in the twenty-second additional provision of this Law
Regarding the content and characteristics of each of the various sources of resources, the following clarifications can be made:
The most important economic resource is the contributions or payments to the Social Security, which consist of an economic contribution from the employers and workers, a contribution that is defined based on a percentage of the workers' remuneration.
After the contributions of employers and workers, the next most important is the State contribution to sustain the Social Security System.
These State contributions make part of the citizens' income tax payments available to the Social Security system, so that the effects that the financial system has in general are reproduced in this sector. Thus, if the taxes really achieve, in every case and at all times, the redistribution of taxpayer income, the Social Security system, receiving these benefits and paying the corresponding benefits, also plays a part in this redistribution function.
The second characteristic of these State contributions is their decisive nature, in that they are not devoted to the payment of the obligations of the Social Security System as a whole, but to funding some of them, in short health care, the complements for pension minimums and the budget for the Institute for Social Services and the Elderly.
The volume of resources channelled by the Social Security system, make it a significant economic factor with influence in competitiveness, productivity, consumption and inflation.
Regarding surcharges, fines and similar, this source of revenue refers to that which occur in concept of surcharges for late payment penalties, delays from the compliance with the regulatory period for paying the debt, and can be demanded 15 days after the notification of the enforcement order, if the debtor does not make the payment, and those obtained by issuing fines.
The income, earnings or interest and any other product of its heritage resources are the concepts indicated as a funding source that can be classed as marginal.
The mention made in this chapter to "any other income" refers to the list in the General Collection Regulations, that do not fit into any of the previous sections (State contributions, Social Security System payments, etc.).
The LGSS indicates that "the following will not be Social Security System resources: those resulting from attention, benefits and services", describing certain revenue that is a consequence of providing medical care in certain circumstances, and of the sale of certain materials, or that come from agreements, aid and donations, etc.
The analysis of the determining regulations of funding the expenses budget of the Social Security System allow the following considerations to be made:
The "Contributory Level" of protection, comprising the economic benefits of the different Schemes of the Social Security System and those derived of the contingencies of work-related injuries and occupational diseases, and "the expenses arising from their management and those of operation for the services corresponding to affiliation, collection and economic-financial and patrimonial management" will be "basically funded by" the quotas, the amount of the surcharges and fines, the income, earnings and interest of its heritage resources and the product of other income. If necessary, it is complemented with the State contributions that can be established specifically.
In short, the current trend of our Security Social system is that the resources indicated -without the State Contributions- allows funding at Contributory Level and the management and administration expenses.
The funding of the "non-contributory or welfare level" is paid for by the State, setting its funding in the respective Budget Laws for each year, with specifically aimed contributions. The minimum pension supplements are also paid for by the State, which, once the temporary period indicated has ended, will contribute with specifically aimed contributions established each year in the Budget Laws, with the Social Security Budget covering the difference.
For health care and social services, whose management has been transferred to the Autonomous Communities, funding will be made in accordance with the Autonomous Community Funding System in force at all times.
To solve any doubts on the which benefits are "non-contributory", the LGSS indicates that the following are:
- The "health care" benefits and services included in the protective action of the Social Security System and those corresponding to "social services", except those resulting from work-related injuries and occupational diseases.
- Non-contributory pensions due to disability and retirement.
- The minimum supplements to Social Security pensions.
- Family benefits regulated in the LGSS.