Disability pension: What it is

Find out about the payment you can receive in the event of disability.

Twists of fate sometimes bring setbacks to our lives. As a result of an accident (work-related or otherwise), or an illness (work-related or otherwise), a person may suffer not just a decrease in their capacity to continue practicing their professional activity, but also a major financial shortfall. Although there is a wide array of Social Security payments to cover this type of situation, you may be surprised to learn that disability pensions provide only a tiny fraction of the amount you would like to receive.

This article discusses all the above and also offers guidance on how to plan for contingencies, for example, by setting up a pension plan.

Disability benefits

The Social Security permanent disability pension is offered to working people who, after having undergone a prescribed treatment and been declared medically fit to work (during a prior phase of temporary disability), suffer a serious reduction in their anatomical or functional capabilities that is expected to be permanent and that diminishes their ability to work or prevents them from working at all.

A disability can result in four different types of payments, which vary based on how the disability at issue impacts on a person's ability to perform their job:

  • Partial permanent disability pension.
  • Total permanent disability pension.
  • Absolute permanent disability pension.
  • Severe disability pension.
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Disability pensions are of a contributory nature. The amount awarded will depend on the origin of the disability and how severe it is. In general, it is a percentage of a person's base salary, but can sometimes include a lump sum indemnity.

This type of subsidy is usually managed by the National Social Security Institute (INSS), except if a person has been working under the Special Maritime Scheme, which is under the jurisdiction of the Maritime Social Institute (ISM). Both these institutions provide information about the support available (and the documents required to process applications) on their websites and telephone hotlines.

Partial permanent disability

Partial permanent disability means that a person's ability to perform their work has been diminished, but they are not considered to be totally disabled. Under this category, a person is deemed to have a disability of 33%, which would still enable them to perform the basic elements of a job.

In this instance, the person affected can receive a lump-sum compensation that is equal to 24 monthly payments of the regulatory base. As this indemnity is paid in a single installment, it is not considered a disability pension.

Total permanent disability

A person is deemed to have a total permanent disability when they cannot perform all or the basic elements of their usual job.

This type of disability allows the person at issue to access a total permanent disability pension, the amount of which will depend on the origin of the disability and how long they have contributed to the social security system. As a general rule, this rises to 55% of the corresponding regulatory base, before rising to 75% from 55 years onwards, if the individual can prove that there is a particular reason why they have found it difficult to re-enter the labor market.

This type of pension may be paid in fourteen installments (one for every calendar month and two extra payments if the disability was caused by a common illness or non-work related accident), or twelve installments that include the two extra payments on a pro-rata basis (if the disability was caused by a work-related accident or illness).

This pension is compatible with any work, except the role the person performed prior to being declared disabled.

Absolute permanent disability

An absolute permanent disability is a disability that renders a person completely unable to perform not just their own job, but any other work activity. Under such circumstances, the pension provided for by law totals 100% of the regulatory base, which may be increased in the event of a work-related accident or illness. Additionally, women who have had two or more children may also be entitled to maternity pay.

People receiving this type of pension may still be legally permitted to perform certain activities (either for profit or otherwise), provided said activities are deemed to be compatible with their invalidity status and do not impact on their ability to work for review purposes.

The payment method is the same as for the total permanent disability pension: 12 or 14 payments per year, depending on the origin of the disability.

Severe disability

Severe disability is when a person who has suffered a permanent disability requires assistance to perform essential everyday acts due to the loss of anatomical or functional capabilities.

The amount of the severe disability pension includes a payment to the affected person (whether total or absolute disability) and a supplement payment to their carer, which will be 45% of the minimum contribution base plus 30% of the worker's last contribution base before the corresponding contingency.

If a disability is caused by a work-related accident or illness, the corresponding pension will increase by up to 50%, depending on the severity of the resulting disability. Under such circumstance, women who have had two or more children can apply for additional maternity pay.

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Disability pension alternatives

Despite state benefits, a disability will still lead to a decline in income. For this reason and if your financial position allows, it may be of interest to you to take out a pension plan, such as those offered by BBVA. Although these plans are primarily intended for retirement, they may also be used to provide financial relief in the event you are deemed unable to perform either your usual job (total disability) or any job (absolute disability) or suffer an accident or illness that leaves you severely disabled. These types of pension plans may be attractive both if you are concerned about your retirement and if you are worried about a change in your personal circumstances.

At bbva.es, you can access a wide range of products that help you protect yourself against any unforeseen events. You can access tools such as the calculator to help you understand the figures and find out what kind of tax relief is available on these products at present.

Your pension at BBVA

We offer very good conditions when it comes to paying in your pension with our Va Contigo Account. But if what wish is bring it to BBVA from another company of easy way and fast, put at your disposal our Removals service (to the one which can access from bbva.es or from BBVA's app), which is responsible for carrying out the entire process conveniently, quickly and at no cost to you. Visit BBVA.es to find out more.
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