What this Social Security Special Agreement Is

Social Security allows you to make supplemantary contributions to your pension during a defined period for the purpose of rounding out your future pension

Employees who experience lapses in contributions during their working careers have the option of signing a special, voluntary agreement with Social Security. This allows them to make contributions on their own to ensure a certain pension level when they retire.

Social Security offers the option of making personal contributions to cover possible lapses in contributions when estimating your pension, or when you want to maintain or improve your future pension. Lapses in contributions may occur in the event of unemployment, or when a career change results in a lower income, which can negatively affect your pension estimate.

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This special agreement with Social Security covers benefits for permanent disability, death, or survival following common illnesses and workplace accidents, retirement, and social services.

Generally, this agreement is required by employees who have been dismissed from Social Security but still have several years until retirement. To keep those years without contributions from negatively affecting your pension estimate, opt for personal contributions.

To take advantage of this agreement, you must provide proof of a minimum of 1080 days of contributions in the 12 years prior to being delisted from Social Security.

When you should take advantage of this agreement

This Social Security Special Agreement makes sense largely for those who have been dismissed from Social Security and who have made contributions at the maximum level for several years prior to dismissal. In this case, the impact of lapses in contributions on the pension estimate is great. The agreement makes less sense when you have made contributions at the minimum level, because there is less of an impact.

When you sign the agreement you can choose to contribute at:

  • The maximum level of contribution for your professional category, provided that you have been making contributions for at least 24 months during the last 5 years.
  • The same level at which you contributed over the past 12 months.
  • The minimum level of contribution.
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So, for example, an employee from the category of degree-holding professionals who contributes at the maximum level, 3,642 euros a month according to the 2016 contribution levels, will pay 969 euros in contributions each month. This amount is determined by applying 28.3% to the maximum level (the percentage that the employee and business contribute by law to Social Security on behalf of the employee) and applying a coefficient of 0.94 (3,642*0.283*0.94).

If we consider a case in which an employee contributes at the minimum level for that category, 1,067.4 euros, s/he will contribute 284 euros a month to Social Security (1,067.4*0.283*0.94).

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