Overview of 2023 Pension Revaluations and Key Changes
This pension schedule covers permanent disability, retirement, widowhood, orphan benefits, and the incomes of relatives under the social security system. It applies to premium payments made before January 1, 2023 and not combined with other schemes. These pensions have been adjusted by 8.5 percent. The adjustment took effect on January 1, 2023, and retirees began receiving benefits under the new tables with this month’s payroll. The 8.5 percent increase, one of the most common adjustments for retirees drawing contributory pensions, affects roughly 10 million people and reflects the mid-year trend in consumer prices.
In 2023, the second year of the new automatic annual revaluation formula was implemented. This formula was agreed by the Minister of Inclusion and Social Security, Jose Luis Escrivá, with employers and unions. It uses the average inflation between December of the previous year and November of the current year, yielding an 8.5 percent adjustment for the next period. To illustrate, if the current average pension is 1,141.63 euros (based on the October payroll), it would rise by about 97 euros to 1,238.7 euros starting in January. All contributory pensions for widowhood, disability, or orphanhood receive increases in the same proportion. Among these, permanent disability pensions benefit the most in 2023 since they are exempt from Tax Office contributions and do not require the 2022 Income Statement.
Minimum pensions will also rise by 8.5 percent
The current floor for non-contributory pensions stands at 484.61 euros per month. After a special agreement with one political group to boost these subsidies by 15 percent, the government confirmed that in 2023 the minimum non-contributory pensions will remain at 484.61 euros monthly. Around 428,000 people in Spain receive some form of non-contributory pension, whether at the minimal level or for disability. On the higher end, the maximum contributory pension is set to increase to 3,059.2 euros per month, and the maximum contribution base will climb by 8.5 percent in line with the general pension adjustments.
Elimination of the “Paguilla” for 2023
The 2023 regulations remove the necessity for a compensatory adjustment known as a paguilla. This term described the transition when pensions used the prior year’s inflation rate to adjust early in the year, often leading to a later difference between actual inflation and the initial early-year increase. Last year, pensions rose 0.9 percent at the start of the year relative to what was expected for the year, and the gap widened as inflation was measured twelve months later. Going forward, traditional paguillas will disappear from payrolls, and pension revaluations will rely on the ongoing annual formula.