The new legal framework for flexible retirement – which allows combining work and pension – comes into effect this Friday with new supplements for those who opt in and opening this option for self-employment, among other changes.
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The Council of Ministers approved the royal decree with the legal framework for flexible retirement on May 26 and it was published in the Official State Gazette (BOE) two days later, on the 28th, so the changes come into effect today, three months later.
The government and social agents committed in the 2021 reform to review the conditions of this option, which is minoritarian in Spain, allowing a return to the labor market after retirement, combining pension receipt with part-time employment.
The goal is to make this option more attractive, which is barely used in Spain, since those who voluntarily want to extend their working life prefer other modalities such as deferred or active retirement.
Among the new features, the regulation establishes that all those who want to carry out self-employed activity as freelancers can opt for flexible retirement.
Until now, this retirement modality only allowed part-time salaried employment, while now it will also be possible to be self-employed, provided that one has not been registered in this regime in the three years prior to the retirement date.
Another change coming into effect is that it will not be necessary to wait a minimum period from retirement to request flexible retirement, so it will be possible to access it at any time once the pension is recognized.
New supplements
In addition, pensioners who combine retirement with part-time salaried work will have a wider range to work, between 33% and 80% of the working day, whereas until now it was between 25% and 75%.
The pension amount will be reduced in inverse proportion to the reduction in working hours.
Also new, and to encourage return to the labor market when accessing flexible retirement after at least 6 months from retirement, the pensioner will receive an additional percentage of pension.
Thus, part-time work between 55% and 80% will increase the pension amount by an additional 25%, while those between 33% and 55% will add an additional 15%.
In the case of self-employment, the pensioner may receive up to 25% of the pension while carrying out the compatible activity.
During the flexible retirement period, the worker will continue to have the status of pensioner for health care and social protection purposes.
The new regulation will apply to all Social Security regimes, except for the special regimes of State Civil servants, the Armed Forces, and personnel serving the Administration of Justice.
The Minister of Inclusion, Social Security and Migrations, Elma Saiz, highlighted that the aim of these changes is for workers to “have more and better options when retiring or combining employment and pension”.
The regulation has no retroactive effects, meaning that flexible retirements started before August 28 will continue to be governed by the previous regulations.
