What is the minimum pension?

Find out how to calculate your pension and what the minimum pension is.

The retirement pension covers the loss of income once retirement age is reached. Thus, the pension a person receives depends on the retirement age, the contribution bases of the last years, and the total time spent making Social Security payments. However, in Spain there is a second pension category, non-contributory pensions, for workers who have not made Social Security contributions or have made contributions for a period lower than that which would allow them to receive a contributory pension.

With regard to Social Security contributions, there are minimum amounts established by law that are guaranteed to pensioners who receive pensions below these amounts and who can prove insufficient income and residence in Spain. These pensioners would receive what is known as a minimum supplement.

The maximum pension is also set by law and cannot be exceeded. Read on to find out how pensions are calculated and what the minimum pension amount is, based on the beneficiary's circumstances.

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Learn about the pension system in Spain

To calculate the value of the pension, different variables are taken into account: contribution bases of the last years, the total time spent making Social Security payments, and age at retirement.

  • The contribution bases over the years before retirement (last 22 years in 2019, last 25 years starting in 2022) are used to determine the regulatory base, which is then used to calculate the pension to be received.
  • With respect to the contribution period, this varies between 15 years (which is the minimum required to be eligible to receive a pension of 50% of the regulatory base) and 35 years and 6 months (which gives the right to receive 100%). Starting in 2027, at least 37 years of Social Security payments will be required to receive a 100% pension.
  • The age at which an individual retires is the last variable that comes into the calculation of a contributory pension, as the law prescribes reductions for those who retire before the established age and bonuses for those who do so after. This age is 65 years and 8 months old in 2019, although it is possible to retire at 65 years of age if you have made Social Security contributions for at least 36 years and 9 months.

It is important to understand that the Spanish pension system is in a transition period as a result of the changes introduced by Law 27/2011, of August 1, on updating, adapting, and modernizing the Social Security system, known as the “Pension Reform Law”. This reform, which involves significant changes in all variables used to calculate the pension, is being applied progressively and will continue this course until 2027 when new minimums will be set. On that date, in order to retire at the ordinary age of 65, you must have made Social Security contributions for at least 38 years and 6 months. Otherwise, the retirement age will increase to 67 years.

The minimum supplement, a way to guarantee a decent pension

The tightening of requirements means that, in some cases, the pension you are entitled to after retirement is very low and does not meet the minimum income necessary for decent living. However, the law also provides for a minimum pension that ensures that all citizens receive a benefit large enough to cover their basic financial needs. Accordingly, if the benefit you are to receive, based on your Social Security contributions, is lower than the established minimum amount, the State supplements this amount until your pension reaches the amount set by law. This extra amount that the State provides is what is known as a minimum supplement.

However, not all pensioners are entitled to receive this supplement that makes their pension on par with the minimum established by law. In order to apply for it, you must prove that your income is below a specific amount (which varies depending on whether you have a dependent spouse) and that you reside in Spain.

The minimum retirement pension value and, therefore, the minimum supplement received, depends on three variables: the age of the pensioner (those over 65 years old receive a little more), the circumstances under which the pensioner receives the pension (with severe disability, the value of the pension is greater), and the family circumstances of the pensioner (no spouse, dependent spouse, or non-dependent spouse). These amounts are updated annually in accordance with the law; in 2019, the amounts are as follows:

  • Minimum retirement pension for people over 65 years of age: In the modality with a dependent spouse, 835.80 euros. With no spouse, 677.40 euros. With a non-dependent spouse, 642.90 euros.
  • Minimum retirement pension for people under 65 years of age: In the modality with a dependent spouse, 783.60 euros. With no spouse, 633.70 euros. With a non-dependent spouse, 599 euros.
  • Retirement pension for people over 65 years of age who retire with a severe disability: In the modality with a dependent spouse, 1,253.61 euros. With no spouse, 1,015.99 euros. With a non-dependent spouse, 964.29 euros.
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In conclusion, although the value of the retirement pension is calculated according to the age and working life of the working person, certain thresholds are set by law that guarantee that all retirees can receive a minimum amount for decent living.

A good solution to supplement lower pensions is to invest in a pension plan before retirement. BBVA offers a wide range of possibilities when deciding on the pension plan for investing your savings. Visit bbva.es to discover all the options we offer and choose the pension plan that best aligns with your goals.

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