A self-employed worker has managed to get the Court to recognize a retirement pension of 2,625.40 euros per month after Social Security initially denied it for not being up to date with the payment of contributions. The Superior Court of Justice of Catalonia understands that, having approved a provisional exoneration of unsatisfied liabilities with a payment plan and being in compliance with it, their installments should be computed in the same way as if it were a deferral.
The conflict begins when this worker requests retirement and Social Security denies it for not being “up to date with the payment of Social Security contributions” on the date of the causative event, October 31, 2022. Later, after claiming, Social Security only partially recognized the benefit, computing only the contributions of the general regime. In this way, it established a regulatory base of 945.80 euros, a percentage of 69.74% and a pension of 659.60 euros per month.
The administrative file itself stated that if the RETA contributions were also taken into account, the pension “would be recalculated according to a regulatory base of 2,240.48 euros, with a % of 100%, with a total percentage of 108% and a pension of 2,625.40 euros.” The worker credited 12,990 countable days and 392 days of contributions after reaching the ordinary age, a relevant fact because the General Social Security Law allows adding “an additional percentage of 4 percent for each full year of contributions” after reaching the legal retirement age.
The key to the case was that, before retirement, the Commercial Court number 2 of Barcelona had approved the provisional exoneration of unsatisfied credits and a payment plan by which the debtor agreed to pay the General Treasury of Social Security 7,650.29 euros annually for five years. Even so, the INSS maintained that the unpaid fees “are not effectively made” and that they could not be taken into account either for the deficiency, for the regulatory base or for the percentage.
Deferring payment is not equivalent to losing contributions
The TSJ of Catalonia rejects this approach. The ruling states that the provisional exoneration with a payment plan “is assimilated to cases of deferral of installments, so we consider that it should produce the same effects.” This reasoning links with the collection regulations, which establish that anyone who has been granted a deferral is considered up to date with their obligations with Social Security and that the deferred contributions are eligible for the recognition of benefits, as long as the deferral is prior to the causative event.
Furthermore, the Bankruptcy Law itself provides that the provisional exoneration takes effect from the moment it becomes effective and that it can be revoked if the debtor fails to comply with the payment plan. Since in this case there was no revocation and the court considers it proven that the worker was complying with what was judicially approved, it concludes that he should be treated as a person up to date with payments.
For this reason, the TSJ confirms that these quotas had to be counted “to consider the minimum deficiency, regulatory base and percentage met.” The result is an enormous difference: from a pension of 659.60 euros to another of 2,625.40 euros per month. The resolution leaves a clear idea: when the debt with Social Security is subject to a judicial payment plan and this is fulfilled, that situation cannot be used to reduce the retirement as if the contributions did not exist.