October 26, 2020

“We have to explain to Brussels what we are going to do with pensions”


MADRID

Updated:

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The pension reform holds the key to unlocking the European funds with which to face the coronavirus crisis. As confirmed by the Minister of Social Security, José Luis Escrivá, this reform will be one of the keys to the document that the Government will present to Brussels since, as he recalled, this is one of the “specific recommendations” that the European Union has made us. “We have to explain what we are going to do with pensions, it is one of the structural reforms that have been identified,” he said today in the Congress of Deputies. For this reason, Escrivá has urged the Toledo Pact to close an agreement for the sending of this document, although the minister has slipped that the Government’s proposal will be sent to Brussels, with or without the prior consensus of the groups.

According to Escrivá, the Government has a “Quite advanced plan” and will be included in this reform plan. However, the difficult current parliamentary geometry makes an agreement of the Toledo Pact a kind of safe conduct for the reform, for which the minister has encouraged to close an agreement on these recommendations. “There is no better time than now to close the consensus on pensions,” Escrivá claimed. And he has recognized that both the Toledo PactAs the Government “they are accelerating their work to give certainty and eliminate elements of doubts regarding the future of the system to current and future pensions,” he said.

The minister has also advanced that he hopes to remove from the public pension system all the expenses identified as improper during the entire legislature, until 2023. The minister hopes to transfer to the General State Budgets about 20,000 million euros -which have been identified as expenses that must be paid with social contributions- and will be done in a staggered way, with a first invoice that will be included in the next accounts in which the Government already works.

As he explained, in the non-financial spending limit presented yesterday, the so-called spending ceiling, “there is a significant provision for a significant adjustment to materialize in the 2021 Budget.” “We will take a first step once Parliament recommends it to us, but preventively the spending ceiling has left enough space for that to be the case,” Escrivá pointed out. It is, he said, “ordering the entire system of income and expenses in this legislature.”

Thus, the deficit in Social Security will skyrocket from 1.3% to 2% due to the effect of the pandemic, although the ministry’s calculations are due to the fact that this gap has been redirected at the end of the legislature, in 2023, both due to the The effect that the economic improvement will have as well as the transfer of improper expenses. Beyond achieving balance in Social Security, Escrivá has pointed to maintaining the purchasing power of pensioners as the other major objective of his department, as well as bringing the effective retirement age closer to the legal age and promoting complementary systems . .

Delays in minimum income

Escrivá has insisted that “there are poorly designed incentives that must be corrected” and new ones developed so that voluntarily delay retirement, an area in which he has said that he will present concrete proposals soon. Regarding the systems to supplement pensions, Escrivá has said that the objective is to be able to expand it to people with medium and low incomes. «You have to make a bet on employment plans through collective bargaining and complementary plans ”.

Another major focus of the minister’s appearance has been the minimum vital income, a subject in which he has been criticized for the delays in his management. As revealed, so far they have received almost 1 million requests from the minimum income, a veritable “avalanche” that has been “above their expectations” and that has overwhelmed the ministry. Of this total, 320,000 applications have been processed and 90,800 households are currently paid. 27% of the 320,000 processed up to September have been denied (a total of 86,152), mainly for not meeting income and equity requirements. On the contrary, 28% have already received the green light, and 45% are pending to correct some document of the presentation (141,995).

Escrivá has said that he expects the procedure to gain speed after the modifications introduced to speed up its concession. As Escrivá expects, in this month of October it will go from 90,800 to 135,000 homes that already collect the IMV, while in November it is expected to exceed 200,000 homes. It will be at the end of the year when the objective is reached. Escrivá recalled that initially they estimated that 850,000 homes should receive the IMV, a figure that was “too optimistic”, he acknowledged.

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