Retirement on account of illness

There is no such thing as retirement on account of illness; however, there are several alternatives if you can't continue to work
An illness that prevents you from continuing to work can happen at any time. You could have an existing medical condition that leads to an illness, or become ill as a result of an accident. Although the social security system doesn't provide for ill health retirement as such, there are certain allowances and benefits available for people who cannot work any longer or who have certain disabilities.
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Despite the fact this situation is not categorized as a type of retirement, people who are no longer able to work are entitled to a range of alternative pensions. Generally speaking, people with a disability level of 45% or 65% or more can retire early. However, it is possible that a person may be unable to continue working on physical or psychological grounds, but not be entitled to retire under either of the above scenarios due to their age or the amount of time they have contributed to the social security system. If this happens, they can still stop working if they are eligible for one of the four types of permanent disability pensions, which may be awarded in the event of partial, total, absolute or severe disability, provided their ability to work has been deemed to be diminished on medical grounds.

As we've already mentioned, there is no provision for retirement on account of illness; therefore, it's important to find out about all the pensions that are available through the social security service that can serve as an alternative. This article explains the requirements and basic rules for accessing these pension alternatives.

Early retirement for people with a disability level of 45% or more

The Ministry of Employment and Social Security states that people with a disability level of 45% or more are entitled to early retirement. In order to claim this benefit, they must be registered on the social security system, or be in an equivalent situation, and have had the same level of disability throughout their working lives.

Besides the two aforementioned requirements, individuals who want to access this pension must have paid into the social security system for at least 15 years under one of the disability categories listed below. Furthermore, two of the years in which the individual at issue paid into the social security system as described above must be within the 15-year period that immediately precedes the date the right to claim this allowance occurs.

A person with a disability level of 45% or more can only retire and claim a disability benefit if they are at least 56 years old, regardless of how long they have contributed to the social security system. In other words, if someone meets the requirements of being registered on the social security system and of having contributed to it for more than 15 years but is only 54 years old, they will not be eligible for this allowance. In this instance, they would have to consider one of the other available alternatives.

Early retirement under these circumstances is governed by Royal Decree 1851/2009 and is only permitted for individuals whose life expectancy has been extensively and discernibly curtailed by illness. These include:

  • Learning difficulties.
  • Cerebral palsy.
  • Genetic disorders: Down's Syndrome, Prader Willi Syndrome, Fragile X Syndrome, Osteogenesis imperfecta, Achondroplasia, Cystic Fibrosis and Wilson's Disease.
  • Disorders on the autistic spectrum.
  • Birth defects due to Thalidomide.
  • After effects of polio.
  • Acquired brain damage: Cranioencephalic trauma and sequelae of CNS tumors, infections or poisoning.
  • Mental illness: Schizophrenia and Bipolar disorder.
  • Neurological disorder: Amyotrophic Lateral Sclerosis, Multiple Sclerosis, Leukodystrophies, Tourette Syndrome and Traumatic Spinal Cord Injury.

The pension a person is entitled to receive will be calculated once they have applied to receive the allowance and it has been established that they meet the specified requirements. The time left before retirement will be included as a social security contribution period in order to calculate the base amount of the allowance.

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Early retirement for people with a disability level of 65% or more

This type of early retirement is governed by Royal Decree 1539/2003 and covers people with a disability level of 65% or more. To be eligible for this allowance a person must be aged 52 or over and have paid social security contributions for at least 15 years, as follows:

  • Disability equal to or greater than 65%: the age of retirement can be brought forward by 0.25 years for each year social security contributions have been paid under these conditions.
  • Disability level of 65% or more and proof of the need for additional support to perform everyday activities: the age of retirement can be brought forward by 0.5 years for each year social security contributions have been paid under these conditions.

As above, the time left before retirement will be included as a social security contribution period in order to calculate the base amount of the allowance.

Permanent disability pensions

If a person does not meet the criteria for early retirement due to a disability level of 45% or 65% or more, they can open a proceeding to have any of the following permanent disability levels recognized (provided they meet the relevant criteria):

  • Partial permanent disability: decrease of 33% or more in job performance.
  • Total permanent disability: Inability of the person at issue to perform their usual professional activity, but not a different one.
  • Absolute permanent disability: disqualifies the person at issue from performing any type of professional activity.
  • Permanent severe disability: the person at issue cannot perform any type of work and needs assistance to perform basic everyday activities.

An annuity may be awarded in all the above situations. In some cases this annuity may be reviewed. The way pensions are calculated differs depending on the level of disability and the origin thereof, with the amount awarded being more or less generous depending on circumstance.

Health is a fundamental part of our lives. It is also a very delicate issue. Therefore, it is important to bear in mind that the onset of an illness could prevent you from performing your professional activity, so preparing for this possibility will ensure you do not suffer a significant financial loss in the event it happens. BBVA has a wide range of pension plans covering all age ranges and investor profiles, ensuring that if you are forced to retire early due to illness, you can maintain your standard of living by supplementing the pension you are entitled to. Go to bbva.es now for more information and to purchase a BBVA pension plan in just a few minutes from your computer.

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