New year brings pension and minimum-wage increases

  • Pensioners will receive 1.6 per cent more, with minimum wage increasing by 22.3 per cent

The new year has brought in increases to both pensions paid out by the Spanish government and the national minimum wage.

For pensioners who receive an income for the time they paid into Spanish social security, the minimum pension is set to go up three per cent and for those receiving more than the minimum, it will go up 1.6 per cent.

The minimum length of time that a pensioner has to be paying in to the state system to retire at 65 is now 36 years and nine months. For those with less qualifying years, the official retirement age in Spain is now 65 years and eight months for those stopping work in 2019. This figure is rising progressively to 67 years by 2027.

The minimum wage also rose on 1 January. In the biggest increase for 41 years, it has been increased by 22.3 per cent to 12,600 euros a year. This was one of the conditions for the Podemos party to continue supporting the national government of the PSOE. More than 2.5 million workers are set to benefit from the increase, which will also see more money flowing into the social security system through the increased payments from employers.

The government has said that "there is only a small risk that some jobs will be destroyed" as a result of the increase, however companies have suggested the impact could be worse as their costs increase, with 70-90,000 net job losses, according to different studies.

For the self-employed, the so-called 'autónomos', the minimum amount their social security payments are calculated on has risen by 1.25 per cent a month.

'Autónomos' will now also get improved social security cover. For example they will not need to keep paying into the system if they have signed off sick and will now qualify for workplace accident payments.