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Practical Income Manual 2020.

Tax regime for benefits received and advance disposal of consolidated rights

a. Tax regime for benefits received

The benefits received for the contingencies covered by the pension plans (article 8.6 of the consolidated text of the Law regulating Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29) will be taxed in their entirety. as work income without under any circumstances being able to be reduced by the amounts corresponding to the excess contributions.

Regarding the benefits received, take into account the possible application of the transitional regime of reductions applicable to benefits received in the form of capital from social security systems and that derive from contingencies that occur in the years 2012 or later, for the part corresponding to contributions made until December 31, 2006, which is discussed in Chapter 3.

In the event that the benefit is received in the form of an insured annuity, reversal mechanisms or certain benefit periods or counterinsurance formulas may be established in the event of death once the annuity has been established.

Remember: In accordance with article 8.6 of the consolidated text of the Law regulating Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, the contingencies for which benefits will be satisfied are:

  • Retirement.
  • Total and permanent work incapacity for the usual profession or absolute and permanent for all work, and severe disability, determined in accordance with the corresponding Social Security Regime.
  • Death of the participant or beneficiary, which may generate the right to benefits for widowhood, orphanhood or in favor of other heirs or designated persons.

  • Severe dependency or great dependency of the participant, regulated in Law 39/2006, of December 14, on the promotion of personal autonomy and care for people in a situation of dependency.

b. Advance disposal of consolidated rights

The consolidated rights of the participants, mutual members or insured of pension plans, insured pension plans, corporate social welfare plans and social welfare mutual societies can only be made effective in advance in the cases provided for in article 8.8 of the aforementioned consolidated text of the Law for the Regulation of Pension Plans and Funds approved by Royal Legislative Decree 1/2002, of November 29, which are long-term unemployment, serious illness and from 2025 for contributions and business contributions made with at least 10 years of antiquity.

However, as a consequence of the health crisis caused by Covid-19, the twentieth Additional Provision of Royal Decree-Law 11/2020, of March 31, which adopts complementary urgent measures in the social and economic sphere to address to Covid-19 (BOE of April 1) and article 23 of Royal Decree-Law 15/2020, of April 21, on complementary urgent measures to support the economy and employment (BOE of 22), established on an exceptional basis and exclusively during the six-month period between March 14 and September 14, 2020, the possibility that pension plan participants could request to exercise their consolidated rights in the following cases:

  1. Being legally unemployed as a result of a temporary employment regulation file derived from the health crisis situation caused by Covid-19.
  2. Be a business owner of establishments whose opening to the public has been suspended as a result of the provisions of article 10 of Royal Decree 463/2020, of March 14.

  3. For self-employed workers who had previously been integrated into a Social Security regime as such or in an alternative mutualism regime to this, and as a consequence of the health crisis situation caused by Covid-19 have ceased their activity. or when, without having ceased its activity, its billing in the calendar month preceding the one in which the availability of the pension plan is requested has been reduced, at least, by 75 percent in relation to the average billing of the previous calendar semester. , provided that they do not fall into one of the two cases included in the previous letters.

    In the case of self-employed agricultural workers of seasonal production included in the Special System for Agricultural Self-Employed Workers, as well as workers of fishing, shellfish production or specific seasonal products included in the Special Regime for Sea Workers , when their average billing in the months of the production campaign prior to the one in which the benefit is requested is reduced, at least, by 75 percent in relation to the same months of the campaign of the previous year.

    In the case of self-employed workers who carry out activities in any of the following CNAE 2009 codes: 5912, 5915, 5916, 5920 and between 9001 and 9004 both included, provided that, without ceasing their activity, their billing in the calendar month prior to the one in which the benefit is requested is reduced by at least 75 percent in relationship with that carried out in the previous twelve months

The amount of the consolidated rights available will be that justified by the participant to the pension fund management entity, with the maximum limit of the lower of the following two amounts for the set of pension plans pensions of which you are entitled:

1. Depending on the assumption of those indicated above, the following amounts:

  • The wages not received while the validity of the temporary employment regulation file is maintained for the case provided for in section a) above.
  • The estimated net income that has not been received while the suspension of opening to the public is maintained for the case included in section b) above.
  • The estimated net income that has not been received while the health crisis situation caused by Covid-19 continues for the assumption included in section c) above.

2. The result of prorating the annual Multiple Effects Public Income Indicator (IPREM) for 12 payments in force for the year 2020 (6,583.20 euros) multiplied by three in the proportion that corresponds to the duration of the ERTE, to the period suspension of the establishment's opening to the public or the period of cessation of activity. In any case, in the three cases the maximum period of time to be computed is the validity of the state of alarm plus an additional month.

In all cases (that is, those provided for by article 8.8 of the aforementioned consolidated text of the Law on the Regulation of Pension Plans and Funds and, exceptionally, in those established by Royal Decree-Laws 11/2020 and 15/ 2020, of April 21, due to the health alarm situation caused by Covid-19) the reimbursement of consolidated rights is subject to the tax regime established for the benefits of pension plans, that is, they are taxed as income from work and are attributed to the year in which they are received.

However, in the event that the participant, mutual member or insured had, totally or partially, the consolidated rights, as well as the economic rights derived from the social security systems, in cases different from those provided in the regulations on pension plans and funds that we have just indicated in the previous paragraphs, you must replace the reductions in the tax base improperly carried out through the appropriate complementary self-assessments, including late payment interest.

These complementary self-assessments must be submitted within the period between the date of the advance withdrawal and the end of the regulatory deadline for submitting the declaration corresponding to the tax period in which the advance withdrawal is made.

In this case, the amounts received that exceed the amount of the contributions made, including, where applicable, the contributions imputed by the promoter, will be taxed as work income in the tax period in which they are received.