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 LGSS.
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.
Compatibility of the retirement pension with the exercise of the activity of retired health professionals, doctors and nurses under seventy years of age.
These professionals may be reinstated to active service by the competent authority of the Autonomous Region, in accordance with the provisions of Article 13 of Royal Decree 463/2020 of 14 March. This reinstatement may be either full-time or part-time, and such appointment shall be compatible with the retirement pension. (Order SND/232/2020, of 15 March)
- 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 after the pensioner reached the applicable retirement age, with instances in which the interested party retires as a result of age reductions or takes early retirement being inapplicable 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 carried out on a full-time or part-time basis.
- 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 employee is employed, the amount of the pension compatible with work will reach 100 %.
- 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 interested party stops working for an employer or ends self-employed activities, full payment of the retirement pension will resume. 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.
- The 100% compatibility of the pension with self-employment is only established for self-employed workers, provided that they can prove that they have at least one employee. Law 6/2017, of 24 October, on Urgent Reforms to Self-Employment, also provides for the possibility of extending this compatibility to employees and other self-employed workers in the future (fifth final provision).
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 8%, 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 6% and the latter responsible for 2%.
Maintenance of employment by companies:
Companies at which the provision of services is made compatible with the receipt of the retirement pension must not have adopted improper termination decisions in the six months prior to said compatibility. The limitation will only affect terminations after 17-03-2013 and cover roles from the same occupational group as those affected by the termination.
Once compatibility between the pension and work begins, the company must maintain, for the duration of the retirement pensioner's employment contract, the level of employment in effect prior to his/her recruitment. To this end, the daily average number of workers affiliated at the company 90 days before compatibility began will be used as a reference; the coefficient will be calculated by dividing by 90 the total number of workers affiliated at the company in the 90 days immediately before compatibility began.
The obligation to maintain prior employment shall not be deemed to have been breached when the employment contract is terminated on objective grounds or on disciplinary grounds when one or the other is declared or recognised as justifiable; the same shall apply to terminations on the grounds of the resignation, death, retirement or total permanent, absolute or serious disability of workers or due to the expiry of the agreed contractual period or completion of the work or service provided for in the contract.
- Compatibility of the retirement pension with activities
dedicated to artistic creation that generate intellectual property rights
(Royal Decree 302/2019 of 26 April).
From 1/05/2019, the retirement pension is made compatible with the performance of an activity of artistic creation for which income derived from intellectual property rights is received, including that generated by their transmission to third parties, regardless of whether other related remuneration is received for the same activity.
It is not compatible if, in addition, you are employed or self-employed and are covered by social security.
Irrespective of the percentage and amount of the pension, these activities are compatible with:
- 100 percent of the amount that the beneficiary is receiving or, as the case may be, has been receiving for the contributory retirement pension.
- 100 per cent of the amount of the maternity allowance,
- the additional amount referred to in third paragraph of Article 210.2 of Royal Legislative Decree 8/2015, of 30 October, approving the revised text of the General Social Security Act.
- Allowances for pensions below the minimum pension for as long as he/she combines the pension with the activity of artistic creation, provided that he/she fulfils the conditions laid down for this purpose.
- For self-employed workers: 8 per cent on the Contribution Base for Common Contingencies
- For employees: 6 percent will be borne by the employer and 2 percent by the worker.
Calculation of grace periods
For benefits accrued after the event giving rise to retirement, only contributions paid since the event giving rise to retirement may be taken into account.
Incompatibility retirement pension and temporary disability.
The benefit for temporary incapacity caused after the event giving rise to the retirement compatible with the performance of an activity of artistic creation, will be incompatible with the receipt of the contributory retirement pension from the moment when the activity is ceased and is withdrawn from the corresponding Social Security scheme. In such cases, only the contributory retirement pension shall be paid.