A self-employed retiree has seen her active retirement pension reduced to 50% after Social Security understood that she no longer met the requirements to collect it in full, that is, 100%, as stated in the ruling of the Superior Court of Justice of Andalusia. The woman, who was a pharmacist, had established a community of property with her son to manage the family pharmacy, which led Social Security to consider that the workers became dependent on that entity and not on it directly.
It all begins when Felisa, a 73-year-old self-employed pharmacist, applied for an active retirement pension in 2018 after more than 41 years of contributions (which allows her to work and collect the pension) in the Special Regime for Self-Employed Workers (RETA). Social Security initially recognizes him 100% of his pension, since he met the requirement of having paid workers in his pharmacy.
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Later, in 2019, this pharmacist decided to create a community of assets with her son to jointly manage the pharmacy, in which she would own 80% and her son would own 20%. With this new legal figure, the employees who worked in the establishment became subrogated by the community of property and by only this worker (this is very important in this ruling, since it is key).
Months later, Social Security reviewed his file and notified that, since he did not have workers directly hired in his name, his active retirement became only 50% compatible. As explained by Social Security, the community of property was now the one who appeared as the employer, not Felisa as an individual self-employed person. In other words, he no longer met that requirement to collect 100%.
The Law requires at least one directly hired worker
The retiree, being dissatisfied, filed a claim alleging that, after the entry into force of Law 6/2017 that regulated the urgent reforms of self-employment (can be consulted in this BOE), had the right to continue collecting 100% of the active pension, since the workers continued to perform the same functions in the same workplace.
Despite this, Social Security explained that article 214.2 of the General Law of Social Security (available in this BOE) only allows full collection of active retirement when the pensioner, as a natural person, has at least one directly hired worker. As stated in the ruling, “only the self-employed worker included in the field of application of the RETA can prove this requirement by virtue of his personal condition, not when he acts through an entity with its own legal personality, such as a community of property.”
He was entitled to 50% and must return the amounts improperly collected
The retiree decided to go to court and the Social Court No. 1 of Cádiz initially agreed with her, recognizing her right to maintain 100% of the pension. But Social Security appealed to the Superior Court of Justice of Andalusia, which again revoked the sentence, agreeing with the INSS.
The TSJ was based on the jurisprudence of the Supreme Court, in sentences 120/2022 and 119/2022. They explain that “the employment contract carried out by a community of property cannot take advantage of its community members for the purposes of active retirement.”
The Andalusian court considered that the pharmacy workers were hired by the community of property, not by Felisa, and therefore that employment could not be counted for the purposes of article 214.2 of the LGSS. As the ruling explains, “the actions of the community of property (such as employing or maintaining the employment of three people) cannot be understood as carried out by a specific community member.”
Thus, given that the retiree did not have directly hired workers, she will be able to maintain active retirement at 50% of the pension and not at 100%. In addition, you must return the fees improperly collected, as explained in the ruling.