Many retirees in Portugal and Spain are unaware that certain activities are incompatible with the so-called “active retirement”. The case of a notary, already retired, who will have to return more than 59 thousand euros for continuing to perform public functions after retirement, clarified where the right to a pension ends and the obligation to repay begins.
The Supreme Court confirmed that a retired notary will have to return 59,161.10 euros to the National Social Security Institute (INSS), for having unduly received an active retirement pension while continuing to hold public office.
According to the Supreme Court, the notary committed an “inaccuracy” in declaring that his activity was private, when, in reality, he performed a public function incompatible with this regime.
An active reform that was not compatible
According to the decision, the notary, identified as Virgilio, requested a retirement pension in July 2013, informing Social Security that he had started working on his own as a “notary holder”. He also declared that he would not hold any position in the public sector, which allowed him to receive his pension in the form of active retirement, according to the Spanish digital newspaper Noticias Trabajo.
For some time, the National Social Security Institute (INSS) accepted this situation. However, in 2014, a cross-check of data revealed that the retiree continued to work as a notary, a position that the law classifies as a public function, while receiving his pension. Thus, it was demonstrated that he was receiving the full amount of the pension without complying with the legal requirements.
Social Security then demanded the return of the amounts unduly received, totaling 59,161.10 euros. The notary contested this decision and took the case to court, where the Superior Court of Justice of the Valencian Community ruled in favor, understanding that the debt had already expired, since more than four years had passed, according to the same source.
However, this decision ended up being reversed by the Supreme Court, which confirmed Social Security’s position. For judges, notarial activity is, without a doubt, a public function and, as such, incompatible with active reform, which only applies to private activities.
Weight of “inaccurateness” in the declaration
The Supreme Court highlighted that the error made by the retiree in declaring his activity as private had a decisive impact. This “inaccurateness” ruled out the four-year statute of limitations, since the law provides for exceptions when there are omissions or inaccurate statements by the beneficiary.
In practice, this means that the INSS could review and correct pension entitlement at any time, regardless of the time that has passed since payments began. The Supreme Court also added that the beneficiary “should not benefit from the limitation period” when there is an inaccuracy that influenced Social Security’s initial decision.
Supreme Court corrected TSJ criteria
The essential error of the Superior Court of Justice, according to the Supreme Court, was to apply the limitation period to a case in which there was an incorrect declaration. The jurisprudence is clear: when the award of a pension results from inaccurate information, the administration may demand the return of amounts received unduly, without a time limit.
Even so, the Supreme Court set a limitation, according to: reinstatement must be restricted to the four years prior to the review, as provided for in the General Social Security Law.
What if it happened in Portugal?
In Portugal, a similar case would have a very close solution, since the active retirement regime also clearly distinguishes between public and private activities. The legal basis is found in Decree-Law no. 85-A/2012, of April 5, and in article 78 of the Retirement Statute, which regulates the accumulation of pensions with income from work.
According to these laws, a retired person can only carry out paid professional activity and accumulate pension income if this activity is not integrated into the public service. This means that judges, notaries, public servants and political office holders cannot work in the State after retirement, under penalty of suspension of the pension or refund of amounts received unduly.
The exception only applies to those who work in the private sector or as self-employed workers, as long as they maintain the discounts and comply with the conditions established by Social Security. Even so, income must be communicated to the competent entity, to avoid undue perception of values.
Article 63 of Decree-Law No. 187/2007, which approves the Pensions Legal Regime, also provides that, if there are inaccurate statements or omissions on the part of the beneficiary, the right can be reviewed at any time, without the normal five-year statute of limitations set for administrative reviews.
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