The average amount of the check for delaying retirement is around 20,000 euros and low incomes ask for it more

Arroyo would see "unacceptable" not to raise pensions with the CPI because it would harm the elderly when they need it most

MADRID, 26 May. (EUROPA PRESS) -

The Secretary of State for Social Security and Pensions, Israel Arroyo, stated this Thursday that the average amount of the check in the form of a single payment that Social Security is currently paying for delaying retirement beyond the legal age is around 20,000 euros .

During his appearance before the Senate Labor, Inclusion, Social Security and Migration Commission, Arroyo explained that this check is being requested mostly by low-income pensioners, which may be due, he said, to the fact that they choose to collect the benefit of delaying your retirement, for example, not having to apply for a loan from a financial institution.

The first leg of the pension reform, in force since last January, offers workers who delay their retirement the possibility of improving their pension month by month or collecting all that benefit in a single payment, an option that Social Security decided to offer after surveying people close to retirement age.

Arroyo pointed out that this incentive in the form of an extraordinary payment is proving attractive for more varied profiles of pensioners and, although its average amount reaches 20,000 euros, Social Security has paid in some cases more than 100,000 euros to workers who delayed their retirement more than ten years.

"It is not the same thing that your retirement pension is increased by 50 euros each year than they give you 8,000 euros all at once. We think that this element will make people opt more for this possibility of delaying retirement, although the fundamental thing has been the elimination of the forced retirement clauses in collective bargaining", he explained.

Arroyo has pointed out that the proportion of pensioners who delay retirement and choose the single check has grown "rapidly" and now account for almost half of those who are entitled to this incentive for retiring later from the labor market. Despite this, he has advanced that the Ministry will launch "shortly" information campaigns to promote this measure.

This boost to the delay of retirement is one of the effects of the first leg of the pension reform and will be more noticeable next year, according to Arroyo. However, he has insisted that "the great impacts of the reform" will be seen in the long term.

"The reform of the pension system has a very long-term effect and it is very difficult to see its effects in the short term. When they are well designed they have no impact in the short term, otherwise they have been done in an attack of panic. They have to have a gradual impact and long transitory periods to provide stability and for workers to know what to expect," he argued.

During his appearance, Arroyo defended the 'star' measure of the pension reform: its revaluation with the CPI, and pointed out that, in the current inflationary context, it would be "unacceptable" if pensions were not raised for the elderly according to inflation because that is when they need it most.

"It is impossible not to make that increase. The opposite means that those affected by an external situation that is not their fault are the pensioners," said Arroyo, who has denounced that sometimes "the words of the governor of the Banco de Spain, Pablo Hernández de Cos, with headlines that he "has neither heard nor read" in his speeches.

In any case, he has warned that "the design of the pension reform cannot be conditioned to how inflation is at a given moment" and that this must be observed with "long lights", since the current peak of inflation is " conjunctural" and the Bank of Spain also foresees it as such.

"We have been lucky that this reform was approved before the peak of inflation that we have. If this peak had occurred without this reform, it would have been difficult to negotiate this (the increase in pensions). We will see what the average inflation is, but the forecasts point to an average of 6% or 7%", he stated.

The Secretary of State has recognized that transferring the recommendations of the Toledo Pact to the pension reform has had and still has its difficulty due to the "certain degree of vagueness", on the other hand "logical", of the recommendations themselves.

Regarding the considerations of Brussels on the pension reform, Arroyo has assured that "the evaluation of Brussels" on the reform "could not be more positive".

In relation to the reform of the Special Regime for Self-Employed Workers (RETA) so that the group contributes based on their real income, Arroyo explained that negotiations continue with social agents and self-employed organizations "with the idea that this between in force in 2023 and that contribution for real income is completed in nine years".

The Secretary of State has admitted that this is a "particularly complex" reform because it is necessary to "unify" the technical and administrative processes of Social Security and the Tax Agency. "That has an enormous technical complexity," he stressed.

Likewise, he pointed out that the design of this new contribution system is also "greatly limiting" the fact that "there are many self-employed who declare very low incomes", and has made it clear that the idea is that the group contributes based on their net income, that is, what they earn, not what they earn.

"It is a very complex negotiation, but it is progressing at a good pace and we are going to meet the objectives that we had set for ourselves. We have a window of opportunity and those involved are willing to use it," he asserted.

Asked why the self-employed are going to be required to make a statement about their income forecast, the Secretary of State explained that for the self-employed person who earns less to pay less, "there must be a communication", an income forecast, which can be modified up to six times a year to be able to adjust what you contribute to what you estimate you will earn.

At the end of the fiscal year, Arroyo explained that a cross will be made between what was quoted and what was declared to the Treasury to see if it has been quoted more or less. In the first case, you will be refunded what you have paid in excess and in the second, you will have to pay the difference. "For the self-employed, this should be simple, because it is not very different from what they do when they declare VAT," he indicated.

Arroyo has also stated that it is not the Government's intention that the self-employed have to do more paperwork, so the Ministry is developing applications so that they can make that income forecast without having to resort, for example, to an administrative manager. "But there has to be this increase in information, it is necessary, because it is consubstantial to the system", he has indicated.

The Secretary of State has defended that, if this reform had been in force during the Covid crisis, self-employed workers "would have paid less" in contributions due to the drop in their income. "This reform is very good for when there are these crises," he pointed out.