What is the non-contributory pension?

Find out how a minimum income is guaranteed for people who find themselves in a financial emergency and who have not reached the minimum level of social security contributions

One of the functions of the State is to guarantee that all its citizens receive an income that allows them to cover the minimum financial commitments in order to live, either after they retire or if they find themselves in a financial emergency due to a variety of reasons. To this end, the State provides different types of pensions. The amount and duration of these supports is determined by the circumstances that gave rise to the person's need and by how long they have been making Social Security contributions for, or how long the parent has been doing so in the event of a child being orphaned. However, what happens with the people who, for whatever reason, have not been able to reach the minimum level of social security contributions to receive benefits? In order for people in such circumstances to not go without, there is the non-contributory pension.

In addition to the monetary support it provides, the non-contributory pension also guarantees beneficiaries free medical care and pharmaceutical support, as well as related social services. There are two types of non-contributory pensions, depending on the cause of the financial shortage: disability and retirement.

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Non-contributory pensions are relatively recent in Spain. Act 26/1990 of December 20, through which non-contributory Social Security benefits are established for citizens in need, even if they have never paid social security contributions or have done so for an insufficient period of time to gain the right to contribution-based pensions, was included in the revised text of the Social Security Act of 1994, which is currently in force. This Act has only undergone occasional modifications - for instance, to make the receipt of the full pension compatible with having certain individual incomes, to make the receipt of the disability pension compatible with earned income, and to prevent the recognition of benefit payments due to dependency from affecting the amount to be received for these pensions.

The management and recognition of the right to receive one of the two non-contributory pensions falls under the responsibility of the autonomous community regions, since the functions and services of the Institute for the Elderly and Social Services (known as Imserso) are transferred to these regional authorities. If the beneficiary resides in Ceuta or Melilla, it is Imserso itself that is responsible for studying the application to receive the benefit. However, although these pensions are the responsibility of the regional authorities, the amounts beneficiaries receive are regulated by Law and are the same throughout the country, since they are financed by the State budget through transfers to the Social Security budget.

Requirements for receiving a non-contributory pension

The following is a basic, essential and general requirement for anyone wishing to receive a non-contributory pension due to disability or retirement: a lack of sufficient income. It is understood that there is a shortage of income, in 2017, when a person's annual income is less than €5,164.60.

However, if the person's annual income is less than this figure, but they live with a relative at the same address, they will only be able to receive a non-contributory pension if the sum of all the annual incomes of all the members of the family unit is less than the following amounts:

  • If the person lives at the same address with their spouse and/or direct second degree kinship relatives:
    • Two people in the family unit: €8,779.82.
    • Three people in the family unit: €12,395.04.
    • Four or more: €16,010.26.
  • If the people in the family unit at the same address include any of the person's parents or children:
    • Two people in the family unit: €21,949.55.
    • Three people in the family unit: €30,987.60.
    • Four or more: €40,025.65.
  • Besides the requirement based on income, there is a series of specific and different requests depending on whether the person is requesting a non-contributory pension for retirement or due to disability.
  • Requirements to receive a non-contributory pension for retirement:
    • Be over 65 years old at the time of the application.
    • Reside in Spanish territory at the time of the application and, moreover, have done so for 10 years since the age of 16 and up to the date of the pension's accrual. Of those 10 years, two must be consecutive and immediately prior to the date of applying for the pension.
  • Requirements to receive a non-contributory pension due to disability:
    • Be between 18 and 65 years old at the time of the application.
    • Reside in Spanish territory at the time of the application and have done so for a period of five years, of which two must be consecutive and immediately prior to the application date.
    • Have a degree of disability of at least 65%.

Amount of the non-contributory pension

The monetary amount that is received for either of the two non-contributory pensions is calculated based on the person's individual income or that of the family unit. However, the amount always lies between €5,164.60 a year at the most and €1,291.15 at the least (25% of the maximum limit). As such, the basic amount of the full non-contributory pension represents an income of €368.90 per month, while if only the minimum pension applies due to the income level of the person or their family unit, the basic amount will come to €92.23 per month.

Moreover, those receiving the non-contributory pension due to disability who have a degree of disability of at least 75%, and are able to prove the need for another person in order to perform their essential day-to-day activities, will receive a supplement of 50% of the maximum basic pension. In this case, the basic amount would come to €7,746.90 per year and €553.35 per month.

However, if within the same family unit there are two or more beneficiaries of a non-contributory pension, the maximum quantity they will each be able to receive decreases as follows:

  • Two beneficiaries: €4,389.91 per year and €313.57 per month.
  • Three beneficiaries: €4,131.68 per year and €295.12 per month.
  • Four beneficiaries: €4,002.57 per year and €285.90 per month.
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Is one of your biggest worries reaching retirement and not having paid sufficient social security contributions to receive a Social Security pension? Do you think that with only the income from a non-contributory pension you would not be able to maintain your standard of living? Then you can turn to a BBVA Pension Plan.

By visiting bbva.es you can find out about the pension plan that is best suited to you, based on your age range and your profile as an investor. BBVA has a wide range of pension plans; you are sure to find one that suits your situation and needs. Very shortly, you will be able to request an instrument with BBVA's guarantee to ensure your retirement pension.

Moreover, since one of the reasons for withdrawing the funds from a pension plan under the law is occupational incapacity, just like a non-contributory pension, a BBVA Pension Plan offers you a source of income in such an event.

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