Retirees who decide to return to work while collecting a contributory retirement pension run the risk of Social Security suspending their pension. And this is not all, because they can also claim amounts improperly collected, as established in the General Social Security Law. This standard explains in its articles 213 and 214 that returning to work life is not prohibited, but it must be done through one of the legal means, that is, accessing through a active, flexible retirement or self-employed with limited income. And always meeting the requirements.
Except for these exceptions, provided for by law, the collection of the retirement pension is incompatible with working in any of its regimes. Although the Government is working on re-implementing reversible retirement, it must be said that right now there are these aforementioned formulas by which a pensioner can resume their work activity, although partially.
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Jeanne (63 years old), retired as a nurse, tells how much she receives as a pension: “my pension is 2,000 euros; it was a real shock to see how much I lost, since I earned 3,380 euros.”
Frank (87 years old): “asking for early retirement was the biggest mistake of my life”
The first option is flexible retirement, which allows you to combine your retirement pension with a part-time job. On the other hand, there is active retirement, which is what makes it possible to make the pension compatible with the performance of a work activity, whether as an employed person or as a self-employed worker.
Now, what is the difference between both? Although they may seem the same, there are differences: while flexible retirement only allows part-time work and reduces the pension in proportion to the hours worked, active retirement allows you to maintain a full- or part-time work activity, as long as certain requirements have been met to access the pension. Furthermore, the latter makes it possible to collect up to 50% of the pension while maintaining professional activity.
What happens if I start working and do not notify Social Security?
In the case of starting to work, whether as an employee or self-employed, if you do not notify Social Security, there is a risk that your retirement pension will be suspended. This is established in article 213 of the General Law of Social Security, which states that “the enjoyment of the retirement pension will be incompatible with the performance of any work by the pensioner, whether employed or self-employed, that gives rise to their inclusion in any of the regimes of the Social Security system.”
Furthermore, the same article adds that “the recognition of the right to a retirement pension and its receipt will be incompatible with work, except in the cases expressly provided for by law. The performance of work incompatible with the pension will determine the suspension of its payment during the time in which the activity is maintained.” In other words, it can only be accessed through the two ways that we have mentioned and always meeting the requirements and requesting it from Social Security.
A real example of incompatibility
To understand it better, let’s look at it with a real example of how a pensioner temporarily lost his pension and had to return 17,538.72 euros to Social Security for collecting a retirement pension while continuing to work. The man began to receive a retirement pension in Spain of 1,800 euros per month, but, at the same time, he decided to move to the United States and continue working there for several years, where he continued contributing and did not communicate this situation to the Spanish Social Security.
Upon returning to Spain, Social Security notified him of the incompatibility between the collection of the pension and the work carried out abroad, and demanded the return of 17,538.72 euros corresponding to the amounts received unduly during that period. Although it took the case to court, the Superior Court of Justice of Catalonia ruled in favor of Social Security, since the regulations clearly establish the incompatibility between the collection of the retirement pension and the performance of a work activity, even if this is carried out outside of Spain.