Contributory and non-contributory pensions: How do they work and who can apply?

BarcelonaThis year, the Council of Ministers approved the revaluation of contributory pensions and the increase in the annual amount of non-contributory pensions. Specifically, for all purposes, the former have increased by 3.8%, and the latter have been updated to €7,905.80 per year, which amounts to €568.70 per month in 14 installments. But what are each of these pensions and how can they be applied for?

Contributory pensions

Contributory pensions are financial benefits granted after the beneficiary has paid Social Security taxes. For example, retirement, disability, or death pensions. Thus, the amount received from contributory pensions varies depending on the contributions made by the worker during the period specified for each benefit.

Retirement

The Social Security retirement pension is a lifetime economic benefit granted to workers when they cease to work due to age. Retirement can be total or partial. Since there are different types of retirement, the eligibility requirements for each vary.

• Ordinary retirement: According to law, to qualify for ordinary retirement, workers must have contributed at least 15 years, at least two of which must be in the last 15 years, and be of the age established by law. Currently, the retirement age is 66 years and 6 months for those applicants with fewer than 38 years of contributions. Contributors who have contributed more than 38 years may retire at age 65.
• Early retirement: This is the legal option that allows workers to retire before meeting the above deadlines. Depending on the reasons that led the taxpayer to this situation, the eligibility requirements will vary.
• Partial retirement: In partial retirement, after reaching age 60, a worker chooses to collect part of their pension while also receiving a salary for their part-time work at a company. In other words, it's a system that allows them to work and be retired at the same time.
• Flexible retirement: Flexible retirement is designed for pensioners who want to return to the workforce, as they can combine their pension with a part-time contract.

If you wish to apply for a retirement pension, workers registered with Social Security may apply within the three months before or after their employment termination date. Retirement benefits will begin to be received the day after employment ceases.

Permanent disability

The contributory permanent disability pension seeks to cover the loss of salary or professional income suffered by a person affected by a pathological or traumatic process, resulting in reduced or lost working capacity. It may be partial, total, absolute, or severe disability.

Death

These death and survivor benefits are intended to compensate for the financial hardship caused, for certain individuals, by the death of another person. They are classified as widowhood, orphanhood, and benefits for family members.

Non-contributory pensions

Non-contributory pensions are financial benefits granted to citizens who lack sufficient resources for their subsistence, even if they have never contributed to Social Security or have not contributed for long enough to qualify for contributory benefits. They can be for retirement or disability. The amount of the benefit is established each year in the General State Budget Law.

The requirements

To qualify for a non-contributory pension, whether for disability or retirement, the following general requirements must be met:

• You must have no income or an income of less than €7,905.80 per year, calculated annually for 2025.
• If the applicant lives with family members, the sum of the annual income or earnings of all members of their household will be less than certain amounts.

In addition, if you want to apply for a retirement pension, you will have to take into account other obligations:

• Being 65 years of age or older.
• Have legally resided in Spanish territory for at least ten years, between the age of 16 and the pension accrual date, of which two years must be consecutive and prior to the pension application.

And in case of disability:

• Be over 18 years old and under 65 years old.
• Legally reside in Spanish territory for five years, the last two consecutive years immediately prior to the date of your application.
• Have a disability or chronic illness of 65% or more.