Payroll services Spain

New Incentives for Deferred Retirement in Spain: Enhancing Flexibility for International Companies

Table of Contents

Share

Share on whatsapp
Share on facebook
Share on twitter
Share on linkedin

Introduction

As international companies operating in Spain, staying updated on labor and fiscal regulations is crucial for ensuring compliance and maximizing benefits. In this article, we will explore the recent reforms regarding incentives for deferred retirement in Spain.

These incentives provide employees with the option to delay their retirement, offering a combination of increased pension benefits and a lump-sum payment.

Employing In Spain understands the importance of providing comprehensive assistance to international clients, and we are dedicated to offering expert guidance on labor and fiscal matters.

Understanding the New Incentives for Deferred Retirement

The Spanish Council of Ministers has recently approved a royal decree that finalizes the reform of incentives for deferred retirement, which was initiated in 2021.

The reform introduces a mixed formula that combines two existing benefit types for individuals voluntarily choosing to postpone their retirement.

The formula includes a percentage increase in pension and the provision of a lump-sum payment upon retirement.

Benefits and Eligibility Criteria

Employees who opt for this new formula and delay their retirement between 2 and 10 years will receive a simultaneous increase of 2% in their pension for each year of delayed retirement.

Additionally, they will receive a lump-sum payment equivalent to half of what they would have received under the current lump-sum payment option.

For those who delay their retirement for 11 years or more, the incentive includes a lump-sum payment applied to a 5-year delayed period, along with a 2% increase in the pension for each year of delay.

Positive Impact and Adoption Rate

The reform of incentives for deferred retirement has already shown positive results.

In 2022, the first year of implementation, the percentage of individuals choosing this option reached 5.4% of retirees. In the first quarter of 2023, this percentage further increased to 7.8%.

During 2023, 1,148 new pensioners (17% of pensions benefiting from some form of delay supplement, compared to 12% in the same period of 2022) have opted for the lump-sum payment, with an average amount of €13,100.

Conclusion

At Employing In Spain, we understand the significance of labor and fiscal regulations for both workers and companies in Spain.

We have a team of professionals ready to assist you in achieving your employment objectives and addressing any concerns related to labor and employment matters.

Contact us today to schedule an appointment and take advantage of our expertise.

We are committed to providing the best possible assistance for your business operations in Spain.

Share

Share on whatsapp
Share on facebook
Share on twitter
Share on linkedin

MAIN OFFICE

Calle Sorni 7, 1º-A
46004 Valencia, Spain 

__________________                  964 250 099
info@lexcamasesores.com

OTHER OFFICES

Calle Ruiz Zorrilla 1, 3º
12001 Castellon Spain
_________________________        Paseo de la Castellana 40, 8º
28046 Madrid Spain

Official Partners

Follow us

Recent posts