Many retirees in Portugal and Spain are unaware that certain activities are incompatible with the so-called “active retirement”. The recent case of a retired Spanish notary, 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.
Spain’s Supreme Court has confirmed that a retired notary will have to return 59,161.10 euros to Social Security for having unduly received his active retirement pension while continuing to perform public duties, according to the Spanish digital newspaper.
According to the STF, the notary was “inaccurate” in declaring that his activity was of a private nature, 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 retirement in July 2013, informing the INSS about starting a self-employed activity as a “notary holder”. He also declared that he would not perform any role in the public sector, which allowed him to access the pension in the form of active retirement.
For some time, the National Social Security Institute (INSS) accepted this situation. However, in 2014, data crossing revealed that the retiree continued to work as a notary, a position that the legislation considers a public function, while receiving his pension. It was thus proven 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 R$59,161.10. The registry contested the decision and filed the case in court, where the Superior Court of Justice of the Valencian Community ruled in favor, considering 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 clearly a public function and, therefore, 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 classifying 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 incorrect declarations by the beneficiary.
In practice, this means that the INSS could review and correct the right to benefit 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 statute of limitations” when there is an inaccuracy that influenced the INSS’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 Noticias Trabajo: the reinstatement must be restricted to the four years prior to the review, as established by the General Social Security Law.
What if it happened in Portugal?
In Portugal, a similar case would have a very similar picture, since the active retirement regime also clearly distinguishes between public and private activities. The legal basis is found in the , of April 5, and in article 78 of the Retirement Statute, which regulates the accumulation of pensions with income from work.
According to these rules, a retiree 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 comply with the contribution obligations and conditions defined by Social Security. Even so, income must be reported to the competent authority, to avoid undue receipt of amounts.
Article 63 of the , which approves the Pensions Legal Regime, also provides that, if there are inaccurate statements or omissions on the part of the beneficiary, the right may be reviewed at any time, without applying the normal five-year statute of limitations for administrative reviews.
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