Alex Trelinski
STATE pension reforms kicked in on Tuesday in Spain allowing more flexibility for people to carry on working while receiving increased levels of benefits.
New rules applying to partial, active or delayed retirement have been introduced.
The reforms look to expand people’s working lives by ensuring they get a higher future pension or receive a greater part of their state pension while still being employed.
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The official retirement age this year is 66 years and eight months, which has seen that level rise in recent years.
If people have made contributions for over 38 years and three months, the legal retirement age remains at 65 years.
Partial retirement allows employees to work part-time on a contract while getting part of their state pension.
It has now been extended with access up to three years before the legal retirement age- up from the previous two years.
If partial retirement is utilised three years in advance, working hour reductions can be between 20% and 33%.
In the next two years, the reduction can be between 25% and 75%.
It was previously 50% and only hit 75% if an employee worked on an indefinite full-time contract.
For workers who partially retire having reached the official retirement age, they have the reduced working hours tariff raised to a maximum of 75% as opposed to 50%.
Delayed retirement is where employees postpone calling it a day for at least a year.
In 2021, the government raised the pension increase per year for that group to 4% to 2%.
The reforms mean that from the second year of delayed retirement, pension increases will accrue every six months.
An example given by the government is that of a worker who delays retirement for two and a half years
He will now see his state pension go up by 10% as opposed to 8%, rather than waiting for three years of the ‘delayed’ period.
Active retirement rates are also increased and apply to people one year on from having reached legal retirement.
Amounts paid out on pensions will rise and also contributions over a working life will be reduced.
