Pensions rise 1.6% on average from tomorrow and 3% minimum

Pensions rise 1.6% on average from tomorrow and 3% minimum


Tomorrow, Tuesday, the royal decree-law of urgent measures in social, labor and employment matters comes into force.Includes the revaluation of 1.6% of contributory pensions as of January 1.

In addition, a revaluation of 3% of minimum pensions and Compulsory Old Age and Disability Insurance (SOVI), as well as non-contributory pensions.

The normative text also includes the payment of a compensatory payment for the difference between the revaluation of 1.6% that was applied in 2018 and 1.7%, result of calculating the average of the monthly indices of the last 12 months, a payment that pensioners will receive before of the month of April 2019.

On the other hand, the decree contemplates the possibility of "mandatory retirement" for those who are entitled to 100% of the retirement pension and the repeal of the support contract for entrepreneurs and the salary supplement.

Specifically, the Government has approved an amendment to the Workers' Statute that enables the agreements to establish clauses that enable the termination of the employment contract due to compliance with the legal retirement age, known as "mandatory retirement", provided that be entitled to 100% of retirement pension.

Another approved measure is the "indefinite" validity of the Extraordinary Subsidy for Unemployment (SED), thus eliminating its temporality "in accordance with what was established with the trade union organizations at the social dialogue table".

The new norm also incorporates express derogation of contractual measures and hiring incentives linked to an unemployment rate of more than 15%. Thus, the indefinite contract to support entrepreneurs, the possibility of entering into training and apprenticeship contracts with people between 25 and 30 years of age and the incentives for part-time hiring with training links, the indefinite hiring of a young person by microenterprises and self-employed entrepreneurs, incentives to hire new young entrepreneurship projects, as well as the contract for the first young job and incentives for internships.

The royal decree-law includes the repeal of the accompanying measure to salary, known as salary supplement, for young people enrolled in the National Youth Guarantee System who sign a contract for training and learning. The decision responds to the "low efficiency" of the measure during its period of application.

It also reduces the minimum number of days required to access the subsidy for unemployment or farm income in the temporary workers regime, going from 35 to 20 days.

In terms of quotes, the Government has approved an extension of social protection and an increase of the minimum contribution base of 1.25% and of its type to 30% in 2019, 30.3% in 2020, 30.6% in 2021 and 31% in 2022 for 2.5 million self-employed workers.

Stands out as the main novelty the obligatory coverage of all contingenciess (common, professional, cessation of activity, training and prevention). To this is added the flat rate of 60 euros for 12 months for those who quote by minimum base.

Given that the minimum contribution base for the Special Regime of Self-Employed Workers (RETA), at 944.40 euros, is below the Minimum Interprofessional Salary (SMI), at 1,050 euros in 12 payments, the royal decree-law incorporates a new type of serious labor infraction to "prevent the possible use of the figure of the false self-employed". In this sense, it foresees fines that would range between 3,126 and 10,000 euros per worker.

The decree also includes the rise of the maximum limit of the contribution base of 4,070.10 euros per month, which represents an increase of 7%, which will mean an increase of 850 million euros for the System.

Finally, an increase in the surcharge on the business quota from 36% to 40% is included for contracts with a duration equal to or less than five days and it is extended for one more year, until 2020, the retirement with the requirements and preconditions to the 2011 law of those people who were dismissed before April 1, 2013, provided that they are not included in any Social Security scheme afterwards.

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