Special Scheme for Self-Employed Workers

Mandatory insurance

• Self-employed workers who are at least 18 years of age and who habitually, personally and directly perform a profit-driven activity, without an employment contract.
• Specifically included are, among others, self-employed agricultural workers.

Exempted

• Self-employed workers included in any other special social security scheme.

Voluntary insurance

• No possibilities for voluntary insurance in this scheme.

General finances

• It is PAYG-financed from social security contributions paid by the self-employed.
• There is no specific contribution for old age pensions. Retirement falls within the legal concept of common contingencies together with other social risks.

Contribution rate

• Fixed share contribution base (28.3%).
• The self-employed can chose the contribution base within the defined range of a minimum (EUR 944.40 per month in 2020) and a maximum contribution base ceiling (EUR 4,070.10 per month in 2020).

Taxation of contribution payments

• Social contributions are deductible expenses from the Personal Income Tax.

• The ‘National Social Security Institute’ (Instituto Nacional de la Seguridad Social, INSS) manages the scheme.

Qualifying conditions

• The statutory retirement age increases to 67 in 2027. In 2020, the standard statutory retirement age is 65 years and 10 months, provided that at least 15 years of contribution are credited. For beneficiaries who reach or exceed 37 years of contribution, the retirement age remains at age 65.
• Minimum contribution period: 15 years, of which two years must fall within the 15 years immediately preceding the time of the qualifying event or the date on which the contribution ceased to be compulsory.

Early retirement

• Early retirement is not possible in this scheme.
• However, it is possible to retire at a lower age than the standard age if the worker has paid contributions to another scheme that recognises early retirement.

Deferred retirement

• Retirement can be voluntarily deferred beyond the standard retirement age, on a full-time or part-time basis, after a minimum contribution period (37 years or more for persons age 65, or less than 37 years of contribution for persons aged 65 and 10 months) has been completed and with special contribution considerations (contribution only for occupational risks and for temporary incapacity to work); with positive (permanent) adjustments to pension benefits (additional percentage for each full year of contributions: 2% up to 25 years of contribution, 2.75% between 25 and 37 years, and 4% as of 37 years).

Combining employment & retirement

• Termination of employment is not a precondition for claiming pension benefits.
• The payment of the retirement pension is compatible with self-employment.
• Partial retirement: pending development of regulations.

Pension benefits

• The benefit is recognised under the same terms and conditions as in the general scheme.

Benefit calculation

• The amount of the retirement pension will be determined by applying the corresponding percentage to the regulatory base according to the scale established for the general scheme, based exclusively on the beneficiary's actual years of contribution. However, as a particularity, there is no integration of gaps in the calculation of the regulatory base.
• 100% of the amount of the retirement pension is compatible with independent work, when it involves the hiring of at least one employee.

Taxation and social security contributions

• Pension benefits are subject to tax according to the rules applicable to income from work.
• Pension benefits are not subject to social contributions.
• In cases of compatibility of pension and work, there is a special solidarity contribution of 9% of the contribution base for common contingencies.