The Supreme Court has rejected the appeal of the National Social Security Institute (INSS), confirming that a retiree will not have to return the 125,208.56 euros that the entity claimed in respect of undue charges. The pensioner made his pension compatible with part-time work of 7.5% of the day, below the legal minimums for “flexible retirement”, but he did not notify the INSS. Social Security considered this a total incompatibility and claimed 100% of the pension, but the High Body confirms that it will only have to repay that 7.5% of what was received.
The pensioner, Genaro, began collecting his retirement pension in May 2014. After this, the man was registered in the General Social Security Regime, with several part-time contracts that added up to 7.5% of the working day, during the years 2014, 2015, 2016 and part of 2017 (this is important, since it is the key to the ruling).
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Although the discharge and contributions were known to the Treasury, the retiree did not ask Social Security for what is known as “flexible retirement,” nor did he communicate that he was making the pension compatible with said jobs.
After learning of this in January 2018, Social Security reported that he had improperly collected the pension, for which he was asked to return the entire pension collected during the aforementioned years, which made a total of 125,208.56 euros. Social Security explained that the working day (7.5%) was lower than the minimum limit established for flexible retirement (which the INSS placed at a 50% reduction at that time) and that, therefore, compatibility was impossible.
Since he did not join voluntarily, this dispute was taken to court to decide who was right.
From the 50% refund to the 7.5% refund
In the first instance, the Social Court No. 16 of Valencia agreed, although partially with the retiree. The court accepted that the charge was improper, but not for the entire amount. In a Solomonic decision, he ruled that the reimbursement should be 50% of what was received (that is, 62,604.28 euros), based on the limits of partial retirement.
After this, both Social Security and the pensioner appealed to the Superior Court of Justice of the Valencian Community. The TSJ ruled in favor of the worker, dismissing the Social Security appeal. The Court established that the reduction percentage of the pension, and, therefore, the amount to be reimbursed, should be 7.5% (in other words 9,390.64 euros), exactly the same percentage of the hours that had been worked.
For everything, Social Security decided to present an appeal before the Supreme Court, insisting on the total incompatibility according to article 213.1 of the General Law of Social Security (which can be consulted in this BOE).
“If the most is allowed, the least is allowed”
The High Court explains that the rigorous interpretation of Social Security was incorrect. The ruling explains that article 213 of the LGSS allows the pension to be made compatible with part-time work, and that “it conflicts with this logic that the situation that arises when dedication to productive tasks is far below that 25% is considered incompatible.”
“If the most is allowed, it is evident that the least should be allowed,” the Court reasons. For the Supreme Court, the consequence of not having communicated the situation is not the total loss of the pension, but rather what is established by the regulations themselves (Royal Decree 1132/2002), which is the obligation to repay what was unduly received “in the amount corresponding to part-time activity.” In other words, they cannot force you to return the entire pension, but they can force you to return the part improperly collected.
In this ruling, the key is that performing work below the minimum of the flexible retirement does not make it incompatible, but rather it must be “reflected proportionally on the amount of the pension.”