What are flexible pension benefits?

What are flexible pension benefits?

Ordinary retirement

For as long as a person receives his flexible retirement pension, he will have the status of pensioner when it comes to being recognized by the Social Security Treasury and receiving the health benefits that correspond to him.

This is because, in order to access a flexible retirement pension, it is a prerequisite to have the status of pensioner prior to the application, i.e., to be collecting your retirement pension and then decide to work part-time with an employment contract. Therefore, since you would already be retired, you had to fulfill the conditions to do so.

The flexible retirement pension is incompatible with temporary or permanent disability pensions derived from the job. If you are receiving a disability pension and your flexible retirement pension is approved, the disability pension will be automatically cancelled.

However, the flexible retirement benefit will be compatible with temporary disability and/or maternity pensions whose events occur during the activity performed in part-time work.

Partial retirement 2020

Today in our blog we talk about flexible retirement, a retirement modality that is not as well known as others. We are going to explain to you what flexible retirement consists of, as well as the differences it has with respect to active or partial retirement -since they can be confused as they are somewhat similar-.

In flexible retirement, a work activity is made compatible with retirement, so that we receive income for both concepts. But it is strictly necessary that the work begins after we are declared pensioners, not before. And it is not possible to be employed full time, but only on a part-time, reduced schedule.

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Therefore, a flexible pensioner is a person who, once retired, stops receiving a certain part of his or her pension because he or she decides to spend a certain amount of time per day working. This can be an excellent solution for people who do not wish to be totally inactive after the normal retirement age.

However, for the purposes of health benefits, these holders are recognized as pensioners. But the recognition of any permanent disability derived from the short-time work we have been doing is not valid.

Partial retirement

Article 34 of Law 24/2001, of December 27, 2001, on Tax, Administrative and Social Security Measures, reworded article 166 of the General Social Security Law, in order to adapt the regulation of partial retirement to the amendments introduced in the Workers’ Statute, providing in paragraph 4 of said article, in the wording incorporated by Law 35/2002, of July 12, 2002, that the legal regime for said partial retirement will be that established by regulation.

With regard to the amendment of article 12. 6 of the Workers’ Statute, as well as Article 166 of the General Social Security Law, the new regulation of the relief contract, in relation to partial retirement, is inserted within the purpose of introducing greater flexibility in the access to retirement, with the aim that the age of access to retirement is endowed with the characteristics of gradualness and progressiveness, avoiding an abrupt break between active life and the transition to retirement, with the social benefits of all kinds that such a measure produces, all within the framework of the criteria contained in recommendation 10. The criteria contained in the 10th recommendation of the Toledo Pact and in section IV of the Agreement on the Improvement and Development of the Social Protection System, as well as the guidelines proposed by the different international organizations and, in particular, by the European Union, shall be taken into account.

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Active retirement

Broadly speaking, it makes it possible to combine the receipt of a pension with a part-time contract, by means of a reduction in working hours of between 25% and 50%, or, in other words, the pensioner must work between 75% and 50% of a full-time working day.

As we have seen, in the flexible system, the amount to be received is reduced in inverse proportion to the reduction in working hours compared to a comparable full-time worker. There is a reduction in the pension from the day on which the activity begins.

What both types of retirement do have in common is that, when the worker decides to retire full time, he/she will receive 100% of the pension to which he/she is entitled, which will also be subject to revaluation.