Combining retirement and work: new measures come into force to improve compatibility

BarcelonaThe aging of the population has led the Spanish government to seek solutions to address pensions. Therefore, for years, Madrid has been seeking to promote a hybrid model that allows people to begin receiving their pension while extending their working life. In other words, a system that allows people to work and be a pensioner simultaneously. After numerous failures, a new series of regulatory changes will come into effect starting April 1st to encourage these options.

New conditions for accessing active retirement

Active retirement allows people to combine their pension and work for a specific period of time once they reach retirement age. Until now, eligibility for this plan required a full contribution career, but starting this April, this will no longer be mandatory. According to the Spanish government, this change will have a particular impact from a gender perspective, as it will benefit groups with shorter and more intermittent contribution records. Another important new feature of this type of retirement is that it will now be compatible with delay incentives (the bonuses received by those who delay their retirement), which were not previously applicable.

However, to calculate the corresponding pension percentage, several considerations must be taken into account. The first will vary, depending on the number of years they have delayed access to this active retirement. That is, if someone joins the plan one year after reaching retirement age, the percentage of their pension they will receive will be lower than someone who, for example, delayed it for five years. Thus, the percentage to be received would be as follows:

• After the first year: 45% of the pension.
• From the second: 55%.
• Third: 65%.
• Fourth: 80%.
• Fifth: 100%.

Once these initial percentages have been defined, the coefficients will be updated by 5 percentage points for every 12 months of uninterrupted professional activity. With one exception: in no case will they exceed 100% of the pension. This increase will begin to be received on the first day of the month following the completion of the 12-month cycle.

Updates on partial retirement

The Royal Decree itself also establishes various changes to the regulation of partial retirement. This option, which allows workers to reduce their working hours while they begin collecting part of their pension, is designed to facilitate a gradual transition to retirement. The new features to keep in mind relate to the timing of requests for this plan. Starting now, the period of time during which an advance payment can be requested is extended from two to three years. This includes adjustments to the reduction in working hours.

New incentives to delay retirement

Furthermore, in line with recent years, the Spanish government has sought to promote further improvements to delay workers' retirement. The major new change will be the possibility of receiving an additional 2% incentive for every six additional months worked, starting in the second year. Until now, these incentives were only applied every twelve months. It's worth remembering that since 2022, incentives have been accrued based on three options: a 4% increase in the pension for each year, a check for every twelve months of delay, or a combination of these two.