A recent court decision once again drew attention to the compatibility between receiving retirement due to age and carrying out professional activity, especially when this activity is not reported to Social Security. The case involves a pensioner who continued to receive her entire pension while working independently, in a situation that would end 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 payment of her retirement pension through an activity carried out as a self-employed 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 Institute of Social Security, understanding that the situation contradicted what is provided for in the General Social Security Law, according to the Spanish digital newspaper.
Pension received in full and independent activity
According to the sentence, the pensioner, identified as Celestina, received a monthly pension of R$917.47, corresponding to 100% of the amount to which she was entitled. In April 2019, she registered with the self-employed regime to develop an activity in the restaurant sector, maintaining this registration for four months before canceling it. The central point of the process is the fact that this situation was not communicated to Social Security.
Undue amounts identified by Social Security
When Social Security became aware of the case, it found that she continued to receive the full pension while she was registered as self-employed and managed an establishment with workers under her control.
This accumulation was considered incompatible with current legislation, as it did not fit into any of the exceptions provided, according to the same source. For this reason, the return of R$4,768.82 was determined, relating to the four months of retirement unduly paid.
First favorable decision ended up annulled
Without accepting this conclusion, the pensioner went to court. Initially, Labor Court No. 2 of Valladolid ruled in his favor, considering that the situation would be “fully compatible”. However, Social Security appealed and the Superior Court of Justice ended up revoking this decision, following the understanding defended by the INSS.
Incompatibility foreseen in legislation
The high court based its decision on article 213 of the General Social Security Law, according to which receiving a retirement pension is incompatible with any professional activity, whether employed or self-employed, according to the previously cited source.
The sentence also highlights that anyone who carries out an activity without reporting it incurs liability and is obliged to refund the amounts of pensions received unduly.
SMI exception was not applicable
The decision also clarifies that the conditions were not met to apply the exception provided for earnings below the interprofessional minimum wage in annual terms. This aspect was reinforced by the fact that the retiree had hired workers during the period in which she was registered as self-employed, which indicates income above the legal limit.
Lack of communication and income above permitted
The court was clear in identifying two essential aspects. On the one hand, the lack of communication to Social Security about the beginning of professional activity. On the other, the fact that the income obtained exceeds the ceiling that could allow some degree of compatibility.
Although the law provides for modalities such as partial, flexible or active retirement, they always require compliance with specific requirements and the respective communication to the competent authorities, according to Noticias Trabajo.
Overview of the situation in Portugal
In Portugal, the applicable regime differs from the Spanish model. The general rule determines that retirement due to age can be accumulated with earnings from work, without the need to suspend the benefit.
There are, however, relevant exceptions. The legislation provides that the accumulation of retirement due to age is not permitted when it results from the conversion of retirement due to absolute disability.
Furthermore, beneficiaries who access early pension through the flexibility regime are, for three years, prevented from carrying out professional activity in the same company or in the same business group, which may result in the loss of the right to pension during this period and the refund of unduly paid benefits.
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