Government approves increase to more than 10.3 million pensions

Moncloa Palace, Madrid

The Council of Ministers approved a Royal Decree-Law on urgent measures on social, labour and employment-related matters, which includes increases in pensions under the Social Security system for retired civil servants and other public social provisions for 2019.

On a general basis, contributory pensions will rise by 1.6% on 1 January 2019, and minimum pensions and non-contributory pensions by 3%. Furthermore, as from the January payment, the regulatory base for widowhood pensions will rise by 4%, in addition to a further four points approved back in July.

In addition, pensioners will receive an additional 0.1% in April, which is the difference between the 1.6% increase applied in 2018 and the Consumer Price Index (CPI) for this year, which stands at 1.7%. The final rise for this year will thus stand at 1.7%.

The increase will affect 10,340,805 public pensions, of which 9,692,296 are contributory. Of the remainder, 451,229 are non-contributory and 197,280 correspond to family benefits for dependent minors of 18 years of age or older with a minimum disability of above 65%.

The President of the Government, Pedro Sánchez, who gave a press briefing following the Council of Ministers to take stock of his administration, highlighted that pensioners will acquire purchasing power after years of constant declines due to the effect of the previous system of calculating benefits.

Pedro Sánchez stated that "the sustainability of our pension system requires dialogue, not more impositions", and hence it is the government's intention that, within the framework of social dialogue, an agreement is reached that allows for the sustainability of the public system while maintaining the purchasing power of pensioners. "For this government, pensions are a citizen's right, not goods to be traded", he said.

Greater protection for the unemployed

Pool Moncloa/Fernando CalvoThe Royal Decree-Law approved on Friday also includes measures to foster new hirings and to improve unemployment benefits. The new law also includes an amendment to the Workers' Statute so that collective bargaining agreements can contain clauses that enable the termination of the employment contract on the grounds of having reached the statutory retirement age -so-called "compulsory retirement" - provided that the worker is entitled to receive a full pension.

Pedro Sánchez announced the government's commitment to present a new model of in situ unemployment benefit in 2019. Meanwhile, the Extraordinary Unemployment Benefit will be extended, which was due to expire on 4 January, in order to ensure cover for the unemployed.

The law also includes the express repeal of contractual measures and incentives for hirings tied in to an unemployment rate above 15%. It also reduces the minimum number of days required for temporary workers to receive unemployment benefit or agricultural income from 35 to 20.

Greater protection for the self-employed

The government included in the Royal Decree new measures so that the more than 2.5 million self-employed workers have greater social protection guaranteed and contribute in a more balanced fashion to the Social Security system.

Hence, common contingency cover (common diseases and accidents not at work) and professional contingencies (accidents at work and occupational diseases) will now be compulsory. Cover for termination of activity will also become obligatory and the periods for receiving benefits are doubled.

The minimum contribution base for the self-employed will increase by 1.25% to stand at 944.40 euros. The minimum rate of general contribution, which includes all contingencies, stands at 30% in 2019.

Pedro Sánchez highlighted that "the maximum duration of the benefit upon ceasing activity is doubled and an additional benefit is created consisting of the payment of a contribution when the self-employed worker is in a situation of temporary incapacity, from day 61 after signing off work".

Through these measures, said the President of the Government, the government is complying with a key sector for boosting our productive system and "places Spain at the forefront in Europe on cover for the self-employed".

Protection for minors

Pool Moncloa/Fernando CalvoThe Council of Ministers studied the Draft Bill of the Constitutional Law on the Comprehensive Protection of Childhood and Adolescence from Violence which, among other measures, would extend the statute of limitations for the criminal offences of assault and sexual abuse against minors, as underlined by the President of the Government.

The proposal seeks to turn childhood into a collective asset that deserves protection. Accordingly, the government offers a response to the problem of violence against children and commits to a model that places girls, boys and adolescents at the heart of public policies.

The new law amends 11 old laws and incorporate a broader definition of violence which spans any form of physical, psychological and emotional abuse, including physical punishment or negligent treatment.

The Criminal Code will be amended to significantly extend the statute of limitations for the most serious crimes against children. For offences of attempted murder, sexual offences, aggravated injury, habitual abuse and the trafficking of minors, the statute of limitations will begin to run as from when the victim reaches the age of 30. At present, it begins as from the age of 18.

The President of the Government added that new criminal offences will be created to avoid conduct going unpunished on technological grounds. In addition, conditions will be toughened for those convicted of sexual assault against minors being released on parole or on short-term releases.

Support for artistic creation

Pool Moncloa/Fernando CalvoThe government approved urgent measures on artistic creation, which reflect the recommendations of the report issued by the Sub-committee on Culture for the drafting of the Artists' Statute, approved unanimously by the Lower House of Parliament in September.

On tax matters, the Royal Decree-Law approved lowers Value Added Tax (VAT) from 21% to 10% for services provided by interpreters, artists, directors, technical staff, producers and organisers of cultural works and spectacles. Accordingly, the application of the reduced VAT rate for these essential services is recovered as from 1 January 2019.

Furthermore, the obligations are eliminated, included in the General State Budget for 2018, that had to be taken on by cinema producers for applying a tax break for producing international cinema in Spain. In addition, artists may remain under the General Regime of the Social Security system during periods of inactivity.

Pedro Sánchez pointed out that, through these initiatives, the government upholds an historical claim to guarantee that sector professionals have more decent labour conditions, including the possibility of making their retirement pension and artistic creation compatible. "A country that turns its back on culture is turning its back on the future. And Spain has a genuine treasure trove in its creators that we are under a duty to protect", he said.

Speed limit of 90 km/hour

The Council of Ministers approved a reduction in speed limits on conventional highways to 90 km/hour for all vehicles, in order to reduce the accident rate on these roads and comply with the goal of lowering the death rate in traffic accidents to below 37 people per million inhabitants.

This measure will affect the 10,000 kilometres of conventional roads that had a general speed limit of 100 km/hour. The change also means reducing the difference between speed limits for light vehicles and heavy vehicles and to improve traffic flow on these roads.

Other agreements

• The participation of the Armed Forces on 16 peace missions to be extended until 31 December 2019
• Treasury extends Personal Income Tax rebates to maternity and paternity leave for public servants
• Government agrees on criteria for application of extension of General State Budget for 2018 to 2019
• Government increases aid programmes to local authorities to foster low carbon economy by 144 million euros
• The Council of Ministers distinguishes 21 individuals and institutions in world of culture with the Gold Medal for Merit in the Fine Arts 2018

Non official translation