Starting this Friday, Spain’s flexible retirement system officially comes into effect, allowing retirees to return to work either as self-employed individuals or part-time employees while continuing to receive their pensions. The new regime, approved by the Council of Ministers on May 26 and published in the Official State Gazette (BOE) two days later, introduces several changes aimed at making the option more attractive and accessible, particularly for those who wish to extend their working lives. The regulation permits retirees to combine employment with their pension benefits, offering incentives based on the percentage of time they continue working. Previously, the system was limited to part-time salaried positions, but now self-employment is included under specific conditions. Retirees must not have been registered as self-employed in the three years prior to their retirement date. Additionally, there is no mandatory waiting period after retiring before applying for the flexible retirement scheme, meaning individuals can opt into it immediately once their pension has been recognized. Under the updated rules, part-time workers who choose to return to the labor market will have a broader range of hours available, between 33% and 80% of a full-time schedule, compared to the previous range of 25% to 75%. However, the amount of the pension received will decrease proportionally with the reduction in working hours. To encourage participation, additional percentages are added to the pension depending on the number of hours worked. For those working between 55% and 80%, an extra 25% of the pension is granted, while those working between 33% and 55% receive an additional 15%. For self-employed individuals, the pension increase is capped at 25% during the period they remain active in their business. Throughout the duration of the flexible retirement, the individual retains the status of a pensioner regarding access to healthcare and other social protections. These provisions apply across all social security regimes except those specifically designated for civil servants, military personnel, and judicial staff. The reforms were introduced following commitments made in the 2021 pension reform to review the conditions of the flexible retirement system, which had remained largely unused in Spain. The government aims to provide workers with greater flexibility and better options when deciding whether to retire or continue working. Minister of Inclusion, Social Security, and Migration Elma Saiz emphasized that these changes offer workers “more and better options” when considering retirement or combining employment with a pension. The new regulations do not apply retroactively, so any flexible retirements initiated before August 28 will still follow the previous legal framework. This change marks a significant shift in Spain's approach to retirement policy, aiming to encourage longer working careers and delay traditional retirement ages. The implementation of these measures reflects ongoing efforts to adapt the labor market to demographic challenges and ensure sustainable pension systems.
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