An important shift has emerged in Alicante’s labor landscape, where Social Security activity has provided meaningful support over the last year. A solid boost to the Social Security coffers helped narrow the province’s sizable deficit, a burden that grew during the pandemic. This is welcome news, especially since the extra resources arrive before the next pension reform is fully in motion. That reform is expected to lift contributions, particularly for higher earners.
New regional figures on Social Security spending and revenue show Alicante residents contributed 3.533 billion euros to the public system in 2022, up 17.4 percent from the previous year and higher than 2019, the last year before Covid-19 disruptions. About 3.496 billion of this total came from social contributions—payments by workers and employers through payrolls that form the system’s main income source.
Even so, that amount does not cover all costs. The province’s Social Security office did not completely close the gap. In 2021 the gap stood at nearly 1.7 billion euros between revenue and expenses; by 2022 the deficit was 1.241 billion, as total payments reached 4.770 billion. Of this total, 4.038 billion funded subsidized pensions, while the remainder went to other forms of assistance — including maternity leave or temporary incapacity — and the administration’s operating costs, which cover civil servants’ salaries.
The headquarters of the Social Security Treasury in Alicante mirrors the scale of these figures.
The notable rise in SGK revenues aligns with a significant increase in the number of affiliates—people who work and contribute to the system. The province repeatedly hit record levels of participants, finishing the year with a total of 708,552 jobs, an increase of 25,211 from the prior year.
Contributions from employed workers reached 2.808 billion euros, up 23.7 percent, while self-employed contributions rose to 395.5 million euros, an 18.27 percent gain. Beneficiaries’ own unemployment benefits fell by 23.9 percent, totaling 280.3 million euros.
The push toward reform continues, with a reform-minded shift aimed at reassessing 89,000 minimum pensions in Alicante. As labor market changes unfold, academics such as Pedro Pablo Ortuno from the Miguel Hernández University of Elche point to the impact of labor reforms that curtail the use of part-time contracts in favor of more stable, full-time arrangements. When collective agreements do not apply, moving toward full-time work raises premiums for many workers.
Pensioners in Alicante’s senior centers illustrate the broader social backdrop.
Last year’s near-total factory layoffs contributed to a drop in Social Security revenue during the early pandemic years, a trend now easing as the job market recovers. Alicante’s economy has been reshaped by these shifts, influencing how pension systems balance income and expenses.
In terms of pension types, Alicante’s latest official data show 333,318 contribution pensions in the province, with an average payment of 1,031 euros per month. The largest group is retirees, with 215,439 beneficiaries averaging 1,170 euros each month. Widows number 81,126, drawing an average monthly pension of 768 euros. About 23,107 residents receive permanent disability benefits, averaging 1,014 euros monthly.
Looking ahead, around 23,000 high-earning Alicante residents are expected to contribute more under the forthcoming pension reform. The reform includes the intergenerational equity mechanism that has applied since January and will rise from 0.6 percent to 1.2 percent in coming years. For those earning above roughly 54,000 euros gross annually, the maximum contribution base also triggers higher charges, alongside a solidarity premium aimed at helping fund the retirement reserve pool. In Alicante, the latest wage data indicate that about 23,000 workers will be affected by these increases as their incomes exceed the threshold.
The overarching question remains whether the reform will close the gap between Social Security’s expenses and its income, stabilizing the system for the years ahead. This balance is central to maintaining pension adequacy and the financial health of the public system in Alicante and beyond. (Citation: Local economic and pension administration reports, 2024)