Social Security pays 24 monthly payments of the regulatory base at once to workers with partial permanent disability, who only pay income taxes for 70% of that compensation.

When Social Security recognizes a permanent disability, this does not always force the worker to have to leave his profession, since in the mildest degree he can continue working even if he performs less. In these cases, 24 monthly payments of your regulatory base are collected at once and at once, and in the Income Tax return you will only pay taxes for 70% of what you receive.

This is what happens with permanent partial disability, the lowest of the four degrees that exist. The twenty-sixth transitional provision of the General Social Security Law explains that it is what causes the worker “a decrease of no less than 33 percent in their normal performance for said profession, without preventing them from carrying out the fundamental tasks of the same.”

Unlike the other degrees, in which a monthly pension is collected, the partial pension is paid in a single payment. According to the Social Security website, there are 24 monthly payments of the regulatory base “that served to calculate the temporary disability subsidy from which the permanent disability is derived.” For example, with a base of 1,500 euros per month the worker receives 36,000 euros.

If there was no prior leave because the worker was not entitled to it, the regulatory basis that would have corresponded to him or her if he or she had had one is used. When the disability comes from a work accident or an occupational disease, the compensation can be paid by the company’s mutual insurance company instead of the National Social Security Institute.

How much compensation is taxed in the Income Tax return

Social Security itself indicates that this benefit “is subject to taxation in the terms established in the regulations of the Personal Income Tax (IRPF) and subject, where appropriate, to the general system of withholdings on account of the tax.” That is, it is taxed as income from work, so the money can be received with the withholding already deducted, since, as stated in article 7 of the Personal Income Tax Law, it only leaves absolute disability and severe disability free of taxes.

When collected at once, the 30% reduction is applied (it is included in article 18.3 of that law for disability benefits in the form of capital), as confirmed by the Treasury in the binding consultation V0409-17, of February 2017, on a partial compensation of 86,328 euros. With the 36,000 euros in the example, only 25,200 euros are included in the Income.

The partial is compatible with any job and, according to Social Security, “with the maintenance of the work that has been carried out.” If the worker performs less and there is no suitable position, the company can reduce his salary proportionally, but Royal Decree 1451/1983 prevents it from lowering it more than 25% or below the full-time minimum wage.

Requirements to collect compensation for permanent partial disability

To be eligible, Social Security requires that three requirements be met, the following being:

• Be affiliated and registered with Social Security or in a similar situation, such as collecting unemployment benefits.
• Have 1,800 days of contributions in the 10 years prior to the end of the leave, if the disability comes from a common illness (those under 21 years of age have a period with fewer days). Due to an accident, whether work-related or not, or due to an occupational disease, a prior contribution period is not required.
• If the disability comes from a common illness or a non-occupational accident, not having already reached the ordinary retirement age with the requirements to collect the pension.

These are the requirements of the general regime. For self-employed workers, Social Security only recognizes partial compensation when it comes from a work accident or an occupational disease and the loss of performance reaches at least 50%.