Social Security System

• The subject of the slide deck is social security for topic #9.

Social Security System

• Social Security is intended to guarantee adequate protection to workers and their families in situations of need like illness, accidents, retirement, unemployment, widowhood, and orphanhood.
• The Social Security system has 2 tiers: contributory and non-contributory.
• The contributory form which is integrated by those who have contributed, is structured into a general scheme and several special schemes.
• The contributory modality includes Spanish workers residing in Spain as well as foreign residents legally residing in Spain who have a professional activity in the country.
• The general scheme includes most employed workers who are not included in any special scheme.
• The special scheme includes self-employed workers, maritime workers, coal mining workers, certain public officials, and school insurance.
• The non-contributory method includes people in a state of need who lack sufficient financial resources for subsistence, even if they have never contributed or have not contributed long enough to reach contributory benefits.

Social Security Management Organizations

• The National Institute of Social Security (INSS) manages and administers financial benefits.
• The General Treasury of Social Security (TGSS) manages financial resources and processes affiliations, registrations, and cancellations of workers.
• The Institute for the Elderly and Social Services (IMSERSO) manages non-contributory disability and retirement pensions as well as additional services for the elderly.
• The Social Institute of the Navy (ISM) is in charge of managing the benefits of the maritime and fishing sector.
• The Spanish Employment Agency (AGE) manages unemployment benefits for all workers.

Company Obligations

• Registration with social security in social security is a one time obligation and required for life.
• Affiliation, when applicable to registration, must be processed before the start of the employment relationship up to 60 days in advance.
• Data variations and cancellations must be made within the next 3 natural days, but if the cancellation is requested after the deadline, the obligation to contribute is extinguished on the day the TGSS is aware of the termination of work.
• The company must pay the Social Security contributions monthly which include both its own share and that of the worker, which will have already been deducted from the salary.

Social Security Benefits

• Contributory benefits include healthcare, pharmaceutical assistance, social services, temporary disability, birth/adoption of a child, pregnancy/lactation risk, permanent disability, non-disabling permanent injuries, retirement, death/survivorship (widowhood, orphanhood, dependent family members, funeral assistance), and unemployment.
• Non-contributory benefits include retirement pension, permanent disability pension, healthcare, unemployment subsidy, and the Minimum Basic Income.

Childbirth and Childcare

• The protected situation includes childbirth or adoption/fostering of a child under 6 years or a disabled child under 18 years.
• To qualify, one must be registered with Social Security or in a similar situation and meet the age requirements which include:
  • 21 years: No required contribution period
  • 21-26 years: 90 days of contribution in the 7 years prior to birth/adoption or 180 days during one's entire working life.
  • Over 26 years: 180 days of contribution in the 7 years prior to birth/adoption or 360 days during one's entire working life.
• If the mother does not meet the required prior contribution period, a non-contributory subsidy is granted, which amounts to 100% of the IPREM for the first 6 weeks which is 42 days.
• The benefit lasts 16 weeks, extendable by one week for each child from the second child and in cases of disability of the child.
• The first 6 weeks following birth/adoption are obligatory and uninterrupted, while the remaining 10 can be enjoyed in weekly periods until the child is 12 months old.
• The biological mother can start the benefit 4 weeks before the expected delivery date.
• The allowance is 100% of the regulatory base (BR) which equals the BCCC Regulatory base of the month prior to the event / 30.

Temporary Disability (IT)

• Beneficiaries must be registered or in a similar status with Social Security and contributed for a certain period of time.
  • For common illness, a minimum of 180 days of contributions is required within the 5 years prior to the medical leave.
  • For accidents, professional illness, or workplace injury: No minimum contribution period is required.
• Special IT situations include:
  • Secondary incapacitating menstruation: No minimum contribution period is required.
  • Interruption of pregnancy: No minimum contribution period required.
  • 39th week of pregnancy: The same contribution period as for the birth benefit of a child.
• IT has a maximum duration of 12 months, but can be extended by the INSS for another 6 if it is estimated that the worker can receive medical discharge for recovery.
• If the medical services consider recovery possible, IT can be extended up to a maximum of 24 months.

Benefit Amount for Temporary Disability (IT)

• For Common Illness or non-work accident
  • Days 1-3: No subsidy is paid.
  • Days 4-15: 60% of the regulatory base, paid by the company.
  • Days 16-20: 60% of the regulatory base, paid by INSS or collaborative mutuals.
  • Day 21 onwards: 75% of the regulatory base, paid by INSS or collaborative mutuals.
• For Professional Illness or workplace accident
  • From the day following the sick leave: 75% of the regulatory base, paid by INSS or collaborative mutuals.
• For Incapacitating menstruation
  • Days 1-20: 60% of the regulatory base, paid by INSS or collaborative mutuals.
  • Day 21 onwards: 75% of the regulatory base, paid by INSS or collaborative mutuals.
• For pregnancy interuption
  • First day of sick leave: No subsidy.
  • Days 2-20: 60% of the regulatory base, paid by INSS or collaborative mutuals.
  • Day 21 onwards: 75% of the regulatory base, paid by INSS or collaborative mutuals.
• Base regulatory amounts for temporary, common accidents, non-work accidents and special situations
  • The regulatory base is amount of total earnings the previous month, divided by 30 (or the days of the month )
• Base regulatory amounts for temporary, accidents and work related dieseases
  • The regulatory is the same as above but includes hours and extra from the previous year.

Permanent Disability (IP)

• A situation when a worker, after receiving medical discharge, has severe anatomical or functional reductions that reduce or cancel their ability to work.
• In order to receive the benefit, must be discharged and contributed the required time, unless the disability is due to an accident or occupational disease, in which case no prior contribution period is required.
• The levels of disability are calculated as:
  • A partial permanent disability produces greater than 33% drop in a workers ability, without stopping him/her to do fundamental activities.
  • A total permanent disability limits the worker from performing the most basic tasks.
  • A complete disability prevents the worker from preforming any profession or job.
  • A major disability is when the worker is permentantly disabled and cant preform basic tasks independently necessitating assistance from another individual.

Retirement

• A requirement for retirement is to reach the legal retirement age for the year 2025:
  • An individuals can retire at 65 years old if they contributed for 38 years and 3 months.
  • Otherwise at 66 years and 8 months if contributed to less than 38 years and 3 months,
• Must have contributed for 15 years.

Unemployment

• Unemployment is a contributory benefit for those who have contributed to social scurity.
• Requirements include
• Be affiliated with Social Security and be in a situation of registration or similar to registration.
• Be in a legal unemployment situation.
• Have completed the minimum contribution period of 360 days in the 6 years prior to unemployment.
• Not have reached the age established to be entitled to a contributory retirement pension.

Unemployement Length of Time

• Time periods are
  • 360 -539 days contributed means 120 days of benefits
  • 540 - 719 days contributed means 180 days of benefits
  • 720 - 899 days contributed means 240 days of benefits
  • 900 - 1079 days contributed means 300 days of benefits
  • 1080 - 1259 days contributed means 360 days of benefits
  • 1260 - 1439 days contributed means 420 days of benefits
  • 1440 - 1619 days contributed means 480 days of benefits
  • 1620 - 1799 days contributed means 540 days of benefits
  • 1800 - 1979 days contributed means 600 days of benefits
  • 1980 - 2159 days contributed means 660 days of benefits
  • 2160+ days contributed means 720 days of benefits

Unemployement Payment Amounts

• BR = (Sum of the BCCP of the last 180 days - Extra hours) divided by 180.
• The payment amounts are:
  • Payments are first 180 days = 70% and
  • Payments day 181 + = 60%

Limits on Maximum / Minimum Unemployement due to child count

• Without Child
  • 175% of the IPREM
• With 1 child
  • 200% of the IPREM
• With 2 or more children
  • 225% of the IPREM
• Minimal payments limits depend on child count as well
  • Without Child = 80% of the IPREM
  • With Child[ren] = 107% of the IPREM
  • The IPREM is incremented by 1/6 for extra payments