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Spain to increase workers’ tax contributions to keep pensions afloat

The Spanish government and the country’s top unions have agreed to increase monthly social security tax contributions by 0.6 percent starting in 2023 as a means of protecting the pensions of Spain’s baby boom generation.

Published: 16 November 2021 10:09 CET
A worker checks glasses on the production line at a factory in spain
The rise in social security contributions will be paid mainly by employers - 0.5 percent - while 0.1 percent will correspond to the workers. Photo: GUILLAUME SOUVANT / AFP

From 2023 and over the course of the following decade, Spaniards will lose €1 to €2.5 of their net monthly income to extra social security tax contributions. 

The estimate comes after Spain’s Ministry of Inclusion and Social Security and top Spanish workers’ unions UGT and CCOO agreed that cotizaciones (tax contributions in Spanish) will increase 0.6 percent starting the year after next. 

This bolstering of Spain’s Social Security Reserve Fund will be paid mainly by employers – 0.5 percent – while 0.1 percent will correspond to the worker.

“The reform will come into force in a few months,” Social Security Minister José Luis Escrivá told journalists on Monday, where stressing that the rise in the taxes taken from workers’ salaries “won’t reach €2” for workers and “under €10” for companies.

The measure aims to strengthen Spain’s pension system with an extra €50 billion by 2032, in view of the upcoming retirement of millions of baby boomers, as the Spanish press refers also to them using the English term.

According to 2021 government statistics, there are 6.45 million people in Spain in the 55 to 64 age group, and 9.37 million above the age of 65. 

The reform will be included as an amendment to the bill that is being processed in Spain’s Congress and will act as “a safety cushion” for Spain’s ageing population, Escrivá said.

Spain’s Prime Minister Pedro Sánchez on Monday backed the reform, writing on Twitter that the agreement will serve to  “shield” Spain’s public pension system, an “indispensable tool” in a “more just and egalitarian” society.

However, for the Spanish Confederation of Business Organisations (CEOE) the tax hike will “have negative effects on employment and is the opposite of what the public pension system needs.”

The head of Spain’s opposition Popular Party Pablo Casado has also dismissed the increase in social security contributions as “employment tax” and “nonsense”.

From January 2022, Spain’s retirement age will be pushed back to 66 years and 2 months, meaning that to get a full state pension a worker will have to have worked for 37 years and six months. 

Life expectancy in Spain is the highest in Europe and by 2040 Spaniards are expected to live longer than any other nation in the world, on average 85.8 years.

In a recent report, the OECD recommended that countries push back the age of retirement of its citizens by two years for every three extra years of life expectancy. 

The same study found that in nations such as Spain, Italy, Belgium and France, most people were retiring before the legal retirement age.

READ ALSO: Spain’s self-employed workers to pay €8 more a month in 2022

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PADRON

When and how you need to renew your padrón certificate in Spain

The padrón document you get when registering at your local town hall in Spain must be renewed periodically. Find out when and the steps on how to do it.

Published: 22 April 2024 13:09 CEST
When and how you need to renew your padrón certificate in Spain

The padrón certificate is used to show proof of where you live. Your town hall – or ayuntamiento – uses it to find how many people are living in the area and what their ages are.

The number of people living in each area will depend on how much money they will receive from the government. They use this money for local services such as schools, health centres, parks and police officers.

If you are a non-EU citizen with temporary residence (less than 5 years) in Spain, then you will need to renew your padrón certificate every two years.

You will also need to renew your padrón each time you move house, as it should have your current address. 

For some bureaucratic processes in Spain, you will also need to be able to show you have a padrón certificate that’s no older than three months. 

Depending on where you live, there are different ways you can renew it. This could be in person, online or by post.

READ ALSO – Padrón: 16 things you should know about Spain’s town hall registration

Generally, in order to renew your certificate, you will need:

  • A recent gas, water or electricity bill in your name
  • Your rental contract and receipt of your last rental payment
  • If you own your own property, you will need to show evidence that you own it, such as the property deeds

You will also need to show:

  • A valid residence card such as TIE
  • A valid passport
  • In addition, it is also advisable to bring your previous padrón certificate

For children you will also need the following:

  • Records of your digitised family book (libro de família)
  • A valid passport or residence permit of the minor
  • A passport of one of the parents which also contains the identification data of the minor
  • Birth certificate of your child

If you do not live in the same household as your child, you will also need:

  • A delegation for registration form, signed by the parent who lives with the minor.
  • Photocopy of the valid identification document of the parent who lives with the child.
  • In the case of minors under 14 years of age, it will not be mandatory for them to have an NIE, passport or identification document from their country of origin.

Remember that all your documents should be officially translated into Spanish or another local language such as Catalan, if they aren’t already.

READ ALSO: Can I get my padrón online in Spain?

In person

If you are applying in person, you will need to make an appointment at your local Ayuntamiento or town hall.

When the date for your appointment arrives you will need to complete the renewal form, which will most like look something like this, but may change depending on where you live. 

You will also need to bring originals and photocopies of all the documents above.

Online

If you have a digital certificate or Cl@ve PIN you are able to renew your padrón online. You will need to do this via your local government website.

First, you’ll need to identify yourself digitally with your digital certificate or Cl@ve PIN.

Next you will have to complete the renewal form and then attach digital copies of all the above documentation that’s required.

Then you’ll need to submit and sign it digitally.

By post

Although this is not the most common way to renew your certificate, some town halls may let you apply by post and will have details of the relevant address to send your documents and forms to online. 

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