The Superior Court of Justice of the Valencian Community has approved the criteria of Social Security to force a retired hotelier to return 60,082.11 euros of his retirement pension, in addition to losing it for six months, for maintaining and registering in his name a worker from his restaurant with the aim of being able to collect 100% of the pension. The court explains that the business was run by a company of its own, so the requirement is not met.
The man had been collecting active retirement since 2018, the modality that allows the retirement pension to be made compatible with a job. Being self-employed, article 214 of the General Social Security Law allowed him to collect 100% as long as he hired at least one worker, and that is what he did. While the workforce was transferred to a limited company of which he was a partner and sole administrator, he left only one of the workers registered in his name in order to comply with the requirements.
In April 2022, the Labor Inspection appeared at the restaurant, since the retiree’s daughter worked in the afternoons serving at the bar without being registered in the business (she was hired by another company of hers, dedicated to tourist rentals, according to the ruling). Upon seeing how the premises operated, the Inspection concluded that there was fraud, so Social Security decided to take away his pension for six months and claim what was improperly collected, which in total was 60,082.11 euros.
Social Security requires that he hire himself to collect 100%
The Superior Court of Justice explains that the key is who the employer is, since if it is the self-employed person who works as a natural person, he or she has to respond with all of his or her assets for salaries, as well as for staff dues, and his or her retirement can cost those jobs. On the other hand, if the business operates through a company, it is the company that hires, not the self-employed person, even if he or she is the sole owner.
The Chamber relies on the doctrine of the Supreme Court (ruling of January 26, 2024), which requires that it be “the self-employed individual who hires the employed worker.” In this case, the hotelier “has been ‘reactivated’ as a businessman on the occasion of his retirement to comply with the requirement”, something that according to the judges the plaintiff himself recognized. For the court, this conduct was a “fraudulent act” and it would be up to him to collect 50% of the pension, not 100%.
It is worth remembering that this 100% route is no longer in force, since as of April 1, 2025, article 214 of the General Social Security Law, reformed by Royal Decree-Law 11/2024, establishes a pension of between 45% and 100% depending on how many years retirement has been delayed, a situation that can be consulted on the Social Security website itself.
In the case of self-employed workers, it rises to 75% when retirement has been delayed between one and three years, as long as a person has been hired with an indefinite contract with a seniority of at least 18 months or is new (recently hired) and without an employment relationship with the self-employed person in the previous two years.
The minimum pension for retirees over 65 without a spouse would reach 1,018 euros per month in 2027, while those with a dependent spouse will receive about 415 euros more
The maximum pension will rise to about 3,481 euros per month in 2027 above the CPI, but the extra increase will only be received by new pensioners of that year
In this way, the hotelier will neither recover the 60,082.11 euros that he had already returned nor the pension for those six months that Social Security withdrew from him.