Business & Finance
Snookered!: The Employers’ Scam That Could Leave You Without A Pension In Spain – Olive Press News Spain
We all know that 147 is the magic number if you’re Ronnie O’Sullivan, playing at the Sheffield Octagon: but sometimes the maths works against us. British journalist and man-about-Ronda, MICHAEL COY, found to his dismay that 147 isn’t necessarily lucky.
YOU do everything right. You move to Andalucía and you get a job. You work long hours in trying circumstances, only to find that someone, somewhere, has done the dirty on you.
How so?
Let me ask you a question. When was the last time you pestered your Spanish boss for an up-to-date statement of your pension status? Exactly. For people brought up on the British PAYE system, it’s a no-brainer. You do the work, you get the pension. You don’t delve into it.
Spain doesn’t quite work like that.
To be fair, most of us can see the employer’s point of view. He or she not only pays your salary, but has to fork out for below-the-line costs which you know nothing about. This makes it very unattractive for small businesses to take on workers – or to put it more accurately, it’s painful for the boss if he does it by the book.
So they cheat.
Not all of them, and certainly not government departments (but it’s very hard for expats to land such jobs). What the cheating boss does is, he quietly alters your work record to read, ‘part-time’. It saves him a fortune, and you don’t complain (because you don’t know it’s happening). Things come to a head when you show up at the Seguridad Social offices to say, “Pension please” – and they tell you that you haven’t done your full 15 years.
I’ve lived and worked in Spain for decades, and it has happened to me. Worse still, I was an employment lawyer in London. So if I can get shafted, anyone can.
I’m lucky. My shortfall is only (only?) 147 days. I’m reasonably able-bodied, and so I can find some way to make up the time. But what about people who are ill, or simply can’t argue their corner?
Can you take your boss to court? Yes, you can. But it will involve years of expensive litigation, and you might well lose. Employers often argue, ‘he was in on the scam – I only took him on because he agreed to my under-the-table methods’.
What’s the answer?
Check your status regularly (or pay an accountant to do it), or go ‘autonomo’, or win the lottery.
I always ask for a ticket which contains the digits, ‘147’.
Business & Finance
Spain’s €50bn Pension Timebomb: Payments Surge Ahead Of Mass Retirement Of The Baby Boomer Generation – Olive Press News Spain
PENSIONERS in Spain have seen their retirement benefits surge by a third since 2018 – dramatically outpacing wage growth across the nation.
New data released by Spain’s Social Security system reveals that while working Spaniards have seen their salaries rise by 25% over the past six years, retirees have enjoyed a 33% increase in their monthly payments.
Accordingly, the average pension has now jumped from €1,107 in 2018 to €1,450 per month in 2024.
It paints a stark contrast with the slower growth in workers’ wages, which have only climbed from an average of €1,748 to €2,181 monthly.
The surge in pension payments is putting unprecedented pressure on Spain’s social security system, with experts warning of a growing deficit.
The system closed 2023 with a shortfall exceeding €50 billion, according to calculations by the Foundation for Applied Economics Studies (Fedea).
Adding to the financial strain, newly retiring workers are entering the system with significantly higher pensions than their predecessors.
Last November, new retirees received an average of €1,548 monthly – 16% more than those who retired in the same month of 2018.
The number of pensioners has also increased by 9.2% since 2018, yet pension spending has grown four times faster.
The situation is particularly critical as Spain faces the imminent mass retirement of its baby boomer generation, the largest demographic group in the country’s history.
This demographic shift threatens to further strain the system as the workforce supporting it through contributions continues to shrink.
READ MORE: Reservoirs in Spain are 5% fuller than a year ago following autumn downpours
The Spanish government has attempted to address these challenges through reforms, such as increasing social security contributions, particularly for higher earners, and introducing incentives for workers to voluntarily delay their retirement.
However, Spain’s Independent Authority for Fiscal Responsibility (AIReF) is set to audit these measures this year, with many experts anticipating that they won’t be enough to balance the books.
Without new agreements, the system could face automatic increases in social security contributions, potentially driving up labor costs across the Spanish economy.
The growing disparity between pension payments and wages highlights the broader challenge Spain faces as it grapples with an aging population and the sustainable funding of its pension system in the decades ahead.
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