General budgets for the state lay out a critical framework for civil servants and retirees. In November 2022, a key measure was approved to be consolidated for 2023: the payroll update tied to the CPI. This adjustment translates into an 8.5% increase for pension contributors within the Social Security system, covering death and survival benefits, permanent disability, and retirement grants, all without the need for premiums or separate payslips. The policy also maintains the Minimum Living Income and keeps price increases aligned through 2023, applying a 1% increase from July 2022.
These decisions are planned with clear objectives. They aim to support the Spanish economy by curbing the erosion of purchasing power caused by inflation. Citizens bear the brunt of rising prices, especially those in the lowest income brackets. This group often faces tighter family budgets, reduced opportunities for savings, and heightened vulnerability to unforeseen events, making ends meet a constant challenge.
New date for pensions raise: retirees will be glad
Alongside updating the CPI figures for public income, additional measures were introduced to inject liquidity into families. One such initiative is a €200 one-off payment directed at households with parenting income, intended to provide immediate relief and stimulate spending within local economies.
Refunds to retirees
On March 16, authorities announced a policy to expand retirees’ rights and narrow the gender gap, while outlining a new sustainability framework for the public health system. This framework also includes refunds for income that was illegally deducted from retirees. The goal is to rectify past errors and restore rightful funds to those affected.
Many retirees fall into a specific income band: those who earn less than €5,365 per year and have an annual income under €11,200, and who are not required to file an Income Tax return. This group is exempt from medication charges, a protection that covers about six million retirees in Spain. This exemption recognizes the essential need for affordable access to medicines for retirees who rely on fixed incomes.
The situation arose from an error in the drug co-payment system. Retirees who previously qualified for exemption had to pay for medications due to the erroneous application of co-pay rules. The General State Administration has announced plans to rectify these mistakes and reimburse affected retirees through Social Security. Reimbursement will be processed within the next six months via the pension payment bank account, and the exact amount will reflect each individual’s spending on medicines.