Pension reform to help common law couples

13 July 2006

MADRID — The government, business leaders and unions agreed on Thursday a reform of the state pension to allow common-law couples to claim a pension if their spouse dies.

The cabinet will confirm the agreement on Friday.

Currently sent 2.2 million widows and widowers receive state pensions.

But under the new system, common-law couples will be eligible for the same payments.

The only difference is the criteria for claiming the pension will be tougher.

Two years of marriage is enough to allow a widow or widower to claim a pension if the deceased is the only breadwinner.

But couples who are not married must prove they have been together for longer.

And if children are involved, they must prove a dependency of at least 50 percent.

If there are no children, then they must prove a dependency of 75 percent.

The period of contributions to the state pension system needed to claim a retirement pension will increase from the current 12.87 years to 15 years. Or from 4,700 working days to 5,475.

People who want to retire early will be affected by the reforms.

In the case of collective lay-offs, the company will sign an agreement with social security to carry on contributing the same amount as when the worker was employed.

But with individual early retirements, social security will only contribute the same amount as a minimum salary during the period they claim unemployment benefit.

Those who work after retirement age will have a larger pension of  2 percent for each year and three percent in the case of those who have contributed for more than 40 years.

The maximum pension will have a ceiling of EUR 600 above the current top state pension of EUR 2,232.

The changes are part of a reform which has taken the government, unions and the employers confederation three years to agree.

The reforms have been attacked by some business groups as “inefficient and unjust”.

[Copyright EFE with Expatica]

Subject Spanish news