New rules on early retirement, working while drawing a pension, and layoffs of workers over 50

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1. People who retired at the legal age with a 100 percent pension may work full or part time and receive 50 percent of their pension. While they work, only temporary disability and occupational risk contributions are paid, plus a special 8 percent solidarity contribution that does not count toward benefits.
2. Two early retirement routes are set: involuntary job termination (up to 4 years before legal age, with 33 years of contributions) and voluntary retirement (up to 2 years before, with 35 years). The pension is reduced by coefficients per missing quarter, lower the longer the contribution record.
3. Partial retirement can be reached without a relief contract once the legal age is met, with a work hour reduction of 25 to 50 percent. With a relief contract, ages rise gradually to 63 in 2027, with 6 years of company seniority and 33 years of contributions required, and the retiree's contribution base rises gradually to 100 percent.
4. The rules in force before the reform still apply to pensions starting before January 1, 2019 for people whose employment ended before April 1, 2013, or who come from collective layoff proceedings, collective agreements or partial retirement plans dated before that date.
5. Profitable companies with more than 100 workers that carry out collective layoffs where workers over 50 exceed their share of the workforce must pay a contribution to the Public Treasury, based on unemployment benefits. Amounts for workers rehired within six months are excluded.
6. Companies using the pension and work compatibility must not have made wrongful dismissals in the previous six months and must keep their employment level while the retiree's contract lasts.
7. The new compatibility regime also applies to retirement pensions under Clases PasivasClases Pasivas The pension scheme for civil servants, now largely merged into Social Security. (the former civil servants' pension scheme), on similar terms, for pensions starting on or after January 1, 2009. Earlier pensions keep their previous rules.
8. The income requirement for the unemployment subsidy for people over 55 is tightened (family income cannot exceed 75 percent of the minimum wage), jobless people over 55 who exhausted benefits become a priority group for active employment policies, and a committee of experts on the sustainability factor is created.

Who it affects

• People already retired at the legal age with a 100 percent pension: They may go back to work while receiving 50 percent of their pension.
• Workers who want to retire before the legal age: New contribution requirements (33 or 35 years) and pension reductions per quarter of early retirement.
• Workers aged 50 or over affected by collective layoffs: Their profitable companies may have to pay a contribution to the State; they become a priority group for employment policies.
• Profitable companies with more than 100 workers: New payment and job preservation obligations if they lay off workers over 50 or use pension-work compatibility.
• Worker-members of cooperatives: They can access partial retirement on the same terms as employees.

Words worth knowing

Coeficiente reductor (reduction coefficient)

Percentage deducted from the pension for each quarter short of the legal retirement age.

Carrera de cotización (contribution record)

Years worked and paid into Social Security.

Contrato de relevo (relief contract)

A contract with an unemployed person to cover the hours freed up by a partially retired worker.

Clases Pasivas

The pension scheme for civil servants, now largely merged into Social Security.

Factor de sostenibilidad (sustainability factor)

A mechanism that adjusts pensions to changes in life expectancy.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries