A recent court decision has once again placed the compatibility between receiving retirement due to age and carrying out professional activity at the center of the debate, especially when this activity is not reported to Social Security. The case involves a pensioner who continued to receive her entire pension while working on her own, in a situation considered irregular.
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 from an activity carried out as an independent worker in the catering 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 contradicted the provisions of 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$917.47, corresponding to 100% of the amount granted. In April 2019, he decided to register with the self-employed regime to carry out an activity linked to restoration, maintaining this registration for four months before canceling it.
The central point of the process was the fact that this change was not communicated to Social Security.
Undue amounts identified by Social Security
When Social Security became aware of the situation, it found that the pensioner continued to receive her pension in full while she was registered as a self-employed worker and ran a business with workers in her employ.
This accumulation was considered incompatible with current law, as it did not fit into any of the exceptions provided, according to the same source. Therefore, the refund of R$ 4,768.82 was determined, corresponding to the four months of retirement paid unduly.
First favorable decision ended up annulled
The pensioner did not accept the decision and went to court. In a first phase, the Labor Court nº 2 of Valladolid decided in his favor, understanding that the situation was “fully compatible”. However, the INSS filed an appeal and the Superior Court of Justice ended up annulling 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, which establishes that 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 assumes responsibility and is obliged to return 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 point was reinforced by the fact that the retiree had hired workers during the period in which she was registered as self-employed, which indicated income above the legal limit.
Lack of communication and income above permitted
The court identified two essential aspects. 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 could allow some 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 is different from the Spanish one. The general rule allows old-age retirement to be accumulated with earnings from work, without it being necessary to suspend the benefit. Still, there are important exceptions to note.
The legislation does not allow the accumulation of retirement due to age when it results from the conversion of retirement due to absolute disability, maintaining in these cases a structural incompatibility. There is also a temporary limitation for those who access early pensions through the flexibility regime, being prevented, for three years, from carrying out professional activities in the same company or in the same business group.
When these prohibitions are not complied with, the right to a pension may be lost during the period of the infraction, and the return of benefits received unduly may also be required, as provided by law.
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