A recent court decision has once again placed the compatibility between receiving an old-age pension and carrying out professional activity at the center of the debate, especially when this activity is not properly reported to Social Security. The case involves a pensioner who continued to receive her full pension while working as a self-employed worker, a situation that ended up being considered illegal.
A Spanish pensioner was ordered to return 4,768.82 euros to Social Security for having accumulated, for several months, the full receipt of her retirement pension through professional activity carried out as an independent worker in the restaurant sector.
The decision was taken by the Superior Court of Justice of Castile and Leon, which ruled in favor of the National Social Security Institute, considering that the situation violated the provisions of the General Social Security Law, according to the Spanish digital newspaper Noticias Trabajo.
Pension received 100% and activity as a self-employed worker
According to the sentence, the pensioner, identified as Celestina, received a retirement pension in the monthly amount of 917.47 euros, corresponding to 100% of the amount to which she was entitled. In April 2019, he decided to register with the self-employed worker scheme to carry out a restaurant activity, maintaining this situation for four months before canceling his registration.
The central point of the process is the fact that this situation was never communicated to Social Security.
Undue billing detected by Social Security
When Social Security became aware of the situation, it found that the pensioner continued to receive her full pension while she was registered as a self-employed worker and managed a business with workers at her service.
This accumulation was considered incompatible with the law, as it did not fit into any of the exceptions provided, according to the same source. For this reason, the return of 4,768.82 euros was demanded, corresponding to the four months of pension unduly paid.
First decision in favor of the pensioner ended up being reversed
Unsatisfied, the pensioner turned to the courts. Initially, Labor Court No. 2 of Valladolid ruled in favor, understanding that the situation would be “fully compatible”. However, Social Security filed an appeal and the Superior Court of Justice overturned this decision, aligning with the interpretation of the law defended by the INSS.
Incompatibility provided for by law
The high court was based on article 213 of the General Social Security Law, which establishes that the enjoyment of a retirement pension is incompatible with any work, whether employed or self-employed, according to the previously cited source.
The ruling also highlights that anyone who carries out a professional activity without reporting it incurs liability and is obliged to return the amounts of pensions received unduly.
SMI exception did not apply to the case
The decision also clarifies that there were no elements that would allow the exception provided for income below the interprofessional minimum wage to be applied in annual terms. This point was reinforced by the fact that the pensioner had hired workers during the period in which she was registered as a self-employed worker, which indicates income above the legal limit.
Lack of communication and income above the legal limit
The court was clear in identifying two fundamental problems. On the one hand, the lack of communication to Social Security about the beginning of professional activity. On the other hand, the fact that the income obtained exceeds the limit that would allow possible compatibility.
Although the law provides for modalities such as partial, flexible or active retirement, these always require compliance with specific requirements and due communication to the competent authorities, in accordance with .
Overview of the situation in Portugal
In Portugal, the applicable regime is different from the Spanish model. The general rule establishes that the old-age pension can be freely accumulated with income from work, without the need to suspend the benefit. There are, however, important exceptions to this principle.
The law determines that the accumulation of an old-age pension is not permitted when it results from the combination of an absolute disability pension, maintaining a structural incompatibility here. There is also a temporary restriction applicable to beneficiaries who access early pension through the flexibility regime, who are prevented, for three years, from carrying out professional activity in the same company or within the same business group.
Whenever these prohibitions are violated, the right to a pension may be lost during the period of infringement, and the return of benefits received unduly may also be required, in accordance with the legislation.
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