Incompatibilities / Compatibilities
Collecting the retirement pension is incompatible with:
- Working in a public sector job stipulated in art. 1, section 1, paragraph 2 of Law 53/1984, of 26 September, on incompatibility for employees of the public administration service (exceptions: emeriti university professors and qualified health professionals).
- Holding high-ranking positions.
Working in roles that are incompatible with the right to claim the pension, shall result in the following:
- The retirement pension will be suspended, as will the medical assistance to which pensioners are entitled.
- Employers are required to register the worker as a contributor and to make the corresponding contributions.
- New contributions are used to:
Increase, where applicable, the standard pension percentage.
Accrue the corresponding additional percentage for working past the standard retirement age, as set out in art. 210 of the General Law on Social Security.
Decrease the applicable reduction coefficient, in the event of early retirement.
Under no circumstances will new contributions modify the base rate.
Notwithstanding the provisions of the preceding section, a pension may be supplemented when the pensioner is performing the following work:
- People receiving the pension may supplement their pension with a part-time job under the established terms. During this situation, known as partial retirement, the pension will be reduced inversely proportional to the reduction of the pensioner's working hours compared to those of a comparable full-time worker.
- Retired pensioners may collect their "corresponding pension" and at the same time hold a part-time job as established by law. During this situation, known as flexible retirement, the pension will be reduced inversely proportional to the reduction of the pensioner's working hours compared to those of a comparable full-time worker.
- Receipt of a retirement pension is compatible with self-employment, when total annual income does not exceed the MPW, calculated on an annual basis. Those performing such economic activities are not obliged to pay Social Security contributions and will not generate rights to receive Social Security benefits.
- Activities performed on a self-employed basis by professionals affiliated under an alternative mutual society or exempt from being affiliated to the RETA.
- Retaining ownership of a business and carrying out the activities inherent to said ownership.
- Active Retirement. Retirement pension and active ageing, article 214 of the LGSS:
Receipt of a contributory retirement pension will be compatible with the pensioner carrying out work on behalf of another employer or on a self-employed basis, under the following terms:
- The right to receive the pension must have been obtained at least one year after the pensioner reached the applicable retirement age, with instances in which the interested party retires retirement under the benefit of bonuses or takes early retirement not being applicable to this end.
- The percentage applicable to the corresponding pension base in order to establish the pension amount must be 100%.
- Compatible work may be full-time or part-time on behalf of a third party or self-employed.
- The retirement pension amount that is compatible with work carried out will be equal to 50% of the resulting amount during the initial recognition, once, where applicable, the maximum limit of the public pension, or the pension being paid, is applied at the time when compatibility with work starts. In all instances, minimum supplements, regardless of whether the working day or the activity performed by the pensioner, will be excluded.
However, if the activity is carried out on a self-employed basis and proof is provided that at least one worker employed by another person has been hired, the amount of the pension compatible with work will reach 100 %. The sixth final provision of the General Law on Social Security also provides for the possibility of extending this 100% compatibility to employees and other self-employed workers in the future.
- The pension will be revalued in full under the terms established for Social Security system pensions. However, as long as the compatible job is maintained, the amount of the pension plus the accumulated revaluations will be reduced by 50%, except in the case of self-employment at under the terms indicated in the previous paragraph.
- The pensioner will retain no right to supplements for pensions beneath the minimum amount during the period in which the pension is supplemented with work.
- The beneficiary will be considered a pensioner for all purposes.
- Once the employment relationship has ended, full payment of the retirement pension will be restored. The same shall apply in the case of cessation of self-employment if the circumstances are not such that 100% of the retirement pension can be combined with work.
- This compatibility scheme is not applicable in the event of holding a job or senior position in the public sector, which shall be incompatible with the receipt of a retirement pension.
- This scheme is incompatible with the receipt of the corresponding additional percentage for working past the standard retirement age, as set out in art. 210 of the General Law on Social Security.
When working for an employer or on a self-employed basis, and said work is compatible with the retirement pension, employers and workers will only make Social Security contributions in the event of temporary disability or occupational contingencies, according to the corresponding Social Security system scheme regulations; however, they will be required to make special solidarity contributions of 9%, which are not taken into account when calculating benefits; for employed workers, this obligation will be divided between the employer and the worker, with the former responsible for 7% and the latter responsible for 2%.
Compatibility of a retirement pension with artistic activity. (entry into force on 1 April 2023)
Royal Decree-Law 1/2023 of 10 January introduces a new article 249 quarter into the revised text of the General Law on Social Security, which extends the compatibility scheme of the retirement pension with artistic activity that was previously provided for in Royal Decree 302/2019 of 28 April, extending the cases of compatibility of receiving the full amount of the retirement pension with any artistic activity, whether self-employed or employed.
Thus, it is determined that the receipt of 100% of the amount of the contributory retirement pension will be compatible with:
- With the employment and self-employment of persons pursuing an artistic activity.
For these purposes, artistic activity is understood to be that carried out by persons who carry out artistic activities, be they dramatic, dubbing, choreographic, variety, musical, singing, dancing, acting, specialists, artistic direction, cinema, orchestra, musical adaptation, stage, production, choreography, audiovisual work, circus artist, puppet artist, magic, scriptwriters, and, in all cases, that carried out by any person whose activity is recognised as a performer in Title I of Book Two of the revised text of the Law on Intellectual Property, approved by Royal Legislative Decree 1/1996, of 12 April, or as an artist, player or performer by the collective agreements applicable to the performing arts, audiovisual and musical activity, in accordance with Article 1. 2, paragraph 2 of RD 1435/1985 of 1 August.
- With work for hire or reward and self-employed activity carried out by authors of literary, artistic or scientific works, as defined in Chapter I of Title II of Book One of the Law on Intellectual Property, whether or not they receive intellectual property rights for such activity, including those generated by their transmission to third parties and regardless of whether they receive other related remuneration for the same activity.
- With the employment and self-employment of persons pursuing an artistic activity.
- The amount of the contributory retirement pension compatible with artistic activity includes the supplement for pensions below the minimum pension and the maternity or gender gap reduction supplement, as appropriate.
- The beneficiary in a situation of compatibility will be considered a pensioner for all purposes.
- Beneficiaries of a contributory social security retirement pension who, in addition to their artistic activity, carry out any other work as an employee or self-employed person other than the aforementioned activity which would result in their inclusion in the field of application of the General Scheme or of any of the special social security schemes may not benefit from this type of compatibility.
- Similarly, any form of early retirement or partial retirement is excluded from the scope of this article.
- While working as an employee, employers are obliged to apply for registration and pay contributions to the General Social Security Scheme only for occupational contingencies, although they will be subject to a special solidarity contribution of 9% of the contribution basis for common contingencies, not computable for the purposes of benefits, which will be shared between the employer and employee, with the employer paying 7% and the worker 2%.
- During self-employment compatible with a retirement pension, the persons are obliged to apply for registration and pay contributions under this special scheme only for occupational contingencies and are subject to a special solidarity contribution of 9% of their contribution basis for common contingencies, which does not count for benefit purposes.
However, as an alternative to this system of compatibility, the beneficiary of a contributory Social Security retirement pension in which the above circumstances are met may opt for the application of the legal scheme laid down for any other forms of compatibility between pension and work, established by law or regulation, when he/she meets the requirements for this.
Pensioners may also opt to suspend their pension, in which case registration and the payment of social security contributions will be in accordance with the rules governing the social security scheme that corresponds to their activity.