# social security payments for those with private pension



## mojorojo (May 9, 2009)

Hi there,
My partner and I are considering going self-employed.

We already live in spain and are now wondering if we should rent out a small cottage we have.

The trouble is that if we have to pay what I understand is around 250 euros per month in social security - we will end up with a negative income as any rental income would be quite low.

We are aged 54 and 52 and so I don't believe we have enough pre-pension years left as I think you have to be in the system for 15 years at least.

We already pay 2000 euros per year for health insurance which we are happy with as it provides good cover including well-person checks.

My parner has a private pension plan.

Is there the possibility that we can opt out of the social security? 

Or is it a must regardless.


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## Suenneil (Feb 17, 2009)

mojorojo said:


> Hi there,
> My partner and I are considering going self-employed.
> 
> We already live in spain and are now wondering if we should rent out a small cottage we have.
> ...


Hi there ...

Im not too clued up on the pensions issue but I do know that if you are self employed in Spain or Autonomo you have to pay social security payments each month of around 250 euros - irrespective of whether you earn any money in that particular month! autonomo was considered a decent option when things were really good in the economy - I know a lot of people who did it in the boom years, because they were able to offset so much of their earnings - and paying the SS wasnt a problem ... things are a bit different now in that you have to be confident of earning enough to cover the ss and an additional amount to live on!

Sue


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## jojo (Sep 20, 2007)

Suenneil said:


> Hi there ...
> 
> Im not too clued up on the pensions issue but I do know that if you are self employed in Spain or Autonomo you have to pay social security payments each month of around 250 euros - irrespective of whether you earn any money in that particular month! autonomo was considered a decent option when things were really good in the economy - I know a lot of people who did it in the boom years, because they were able to offset so much of their earnings - and paying the SS wasnt a problem ... things are a bit different now in that you have to be confident of earning enough to cover the ss and an additional amount to live on!
> 
> Sue



I thought you could dip in or out of it depending on what you earn per month.. a good month and you pay it, a bad month and you dont???? Its not compulsory tho is it??? so if you're covered for health care you should be ok, as long as your health care covers you for emergencies etc... and of course you dont need to claim ss unemployment???



Jo xxx


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## Xose (Dec 10, 2008)

mojorojo said:


> Hi there,
> My partner and I are considering going self-employed.
> 
> We already live in spain and are now wondering if we should rent out a small cottage we have.
> ...



I'm not sure I understand the dilemma. If you already pay 167 per month for private medical, then you will be searching for 83€ more per month to cover Autonomo. Say €100 to cover an Asesoria/Gestoria doing your quarterly returns.

So, you can get into the system (see your SS Tesoreria to find out if you can make up contributions for the 2 missing years) and it's paid for by your cottage - and it leaves you with money to fix it up a bit or even take a holiday somewhere

Sorry, is it that you are thinking of Autonomo PLUS keep the private medical?!

The only thing Autonomo gets you is the "I want to see the Doctor Tomorrow morning" factor and avoid the waiting lists for the more minor ailments. Urgencias is excellent in any event and private hospitals are nowhere near as well equipped as the SS majors. In fact, most private sector doctors practice within the SS primarely and secondarily have their private practices.

Most Autonomos have private cover to prevent delays in their busy lives. Is this something you would need to have?!


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## Suenneil (Feb 17, 2009)

jojo said:


> I thought you could dip in or out of it depending on what you earn per month.. a good month and you pay it, a bad month and you dont???? Its not compulsory tho is it??? so if you're covered for health care you should be ok, as long as your health care covers you for emergencies etc... and of course you dont need to claim ss unemployment???
> 
> 
> 
> Jo xxx


Hi Jo

I know that my OH was autonomo for more than 12 months and we had to pay ss every month - even though sometimes he earnt nothing at all. The gestoria did all the paperwork and books every month / quarter (cant remember now!) and as well as paying the ss the payments to the gestor of around 60 euros a month made it a non start really! ..... maybe we were just fleeced or minsinformed ? But I also have friends who are autonomo who have the same problems.
Sue x


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## Xose (Dec 10, 2008)

jojo said:


> I thought you could dip in or out of it depending on what you earn per month.. a good month and you pay it, a bad month and you dont???? Its not compulsory tho is it??? so if you're covered for health care you should be ok, as long as your health care covers you for emergencies etc... and of course you dont need to claim ss unemployment???
> 
> 
> 
> Jo xxx


In practice, you can register and deregister as you wish. In reality, knowing when you are going to be able to earn €1 is going to be quite difficult. You are supposed to be registered to earn that €1. Hence the huge black economy in Spain.

Xose


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## jojo (Sep 20, 2007)

Suenneil said:


> Hi Jo
> 
> I know that my OH was autonomo for more than 12 months and we had to pay ss every month - even though sometimes he earnt nothing at all. The gestoria did all the paperwork and books every month / quarter (cant remember now!) and as well as paying the ss the payments to the gestor of around 60 euros a month made it a non start really! ..... maybe we were just fleeced or minsinformed ? But I also have friends who are autonomo who have the same problems.
> Sue x


I'm sure you're right Sue, I'm not the sharpest tool in the box when it comes to tax and contributions etc, I'm just going on heresay. 

I should put on my signature "do not listen to this woman, she's blonde, but she means well" LOL

Jo xxxx


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## Xose (Dec 10, 2008)

mojorojo said:


> Hi there,
> My partner and I are considering going self-employed.
> 
> We already live in spain and are now wondering if we should rent out a small cottage we have.
> ...



Sorry but forgot to mention. Please get yourselves good advice before letting the cottage. See some agents and talk about contracts and the like.
Ask things like "What happens if after 3 months they stop paying rent?" and once you get an answer, "How can we protect ourselves against that?" You'll get to learn about bank guarantees, due process to get non payers out, the difference between the first 5 years and thereafter, and the like.

Good luck,
Xose


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## Xose (Dec 10, 2008)

Suenneil said:


> Hi Jo
> 
> I know that my OH was autonomo for more than 12 months and we had to pay ss every month - even though sometimes he earnt nothing at all. The gestoria did all the paperwork and books every month / quarter (cant remember now!) and as well as paying the ss the payments to the gestor of around 60 euros a month made it a non start really! ..... maybe we were just fleeced or minsinformed ? But I also have friends who are autonomo who have the same problems.
> Sue x


Hi Sue,
€60 a month for gestoria?! must have had some pretty complex books then. Most gestorias charge the usual Autonomo (nothing changes much in work type and layout every quarter, just the numbers) less than that for the quarter

Xose


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## Suenneil (Feb 17, 2009)

jojo said:


> I'm sure you're right Sue, I'm not the sharpest tool in the box when it comes to tax and contributions etc, I'm just going on heresay.
> 
> I should put on my signature "do not listen to this woman, she's blonde, but she means well" LOL
> 
> Jo xxxx


lol .. I know thats not true Jo ! Im a brunette and get really confused myself sometimes!! lol :tongue1:


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## mojorojo (May 9, 2009)

Many thanks one and all for some interesting aand thought-provoking answers.

Ideally, only one of us would pay SS and put everything through in that person's name. Which would be an entirely true situation.

The trouble is that we are not married (really it is no trouble at all 

but it does mean that we can't claim for the person not paying SS to be a dependant. 

So one of us would still have to pay for private health insurance.

Sounds to me as if you just have to bite the bullet and pay the SS,

or not work

or, or ...

mmmmm .....


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## Suenneil (Feb 17, 2009)

Xose said:


> Hi Sue,
> €60 a month for gestoria?! must have had some pretty complex books then. Most gestorias charge the usual Autonomo (nothing changes much in work type and layout every quarter, just the numbers) less than that for the quarter
> 
> Xose


Hi Xose

I think 50 to 60 euros per month is pretty much what all our friends are paying for the Gestor to keep their autonomo stuff in check etc ...... there were additional payments to be made when they were putting in the tax claims etc ...... it did feel like a lot at the time particularly after already taking out SS payments etc .... when you didnt earn a great deal some months! luckily I,m on contract so dont have to worry too much about it these days! 
Sue


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## DWPinSpain (Mar 2, 2009)

mojorojo said:


> Many thanks one and all for some interesting aand thought-provoking answers.
> 
> Ideally, only one of us would pay SS and put everything through in that person's name. Which would be an entirely true situation.
> 
> ...


Ok, let's sort out the chaff.

You don't have to be in the system for 15 years to claim a Spanish pension. As long as you have a minimum of one year's contributions you may be entitled to a very small pro-rata pension, which the Spanish will calculate by adding your national insurance contributions to those you have made in the UK. You will then get a pension from both countries, depending on entitlement.

Autonomo payments - It may be €250 a month but as well as health cover, you will be entitled to a number of other benefits. The Spanish are also looking at bringing in contributions to unemployment benefit from next year, though we don't have any details yet.

Dependants - you will be able to claim health care for your partner. You need a 'Certificado de Conviviencia' from your Local Police. With this certificate, you will be able to register your partner as a dependant for health care purposes.

If you do start making autonomo payments, try not to miss one. It will be marked as an outstanding debt, which you will have to settle before getting any entitlement to a pension or benefit in Spain. If you do wish to stop paying, make sure you deregister properly and get it in writing from the TGSS.


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## mojorojo (May 9, 2009)

*SS Payments*

That is extremely interesting.

Many thanks indeed for the info.

A further question, if I may - do you happen to know if that holds good for the Canary Islands, which is where I live (should have mentioned it before!).


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## Tallulah (Feb 16, 2009)

DWPinSpain said:


> Ok, let's sort out the chaff.
> 
> You don't have to be in the system for 15 years to claim a Spanish pension. As long as you have a minimum of one year's contributions you may be entitled to a very small pro-rata pension, which the Spanish will calculate by adding your national insurance contributions to those you have made in the UK. You will then get a pension from both countries, depending on entitlement.
> 
> ...


Hi there,

That's very interesting and contradicts the advice I've been given here. 

I have an opportunity to do some work via internet for a UK based company. I would have to be autonomo and they would simply pay me every month on my invoice. The sums involved, typical of many posts here, would vary but it's interesting to me because even if it just covers autonomo, it does allow me to get in to the system in Spain on my own steam and benefit from the items you've mentioned above. 

However, I don't have a huge amount of years on NI contribution history - typical start work, get married, have family etc. If I do the above work, I can't see myself doing it for more than a few years. To be honest, in the current climate, who knows how long said company would be around for in any case, and it is very much a one-off scenario and not a chosen career path for me anyway. I could therefore end up with, say, five years of autonomo contributions. 

So, given that I would be some 24 years from female retirement age in Spain, and given the small number of contributions to NI in the UK, is it possible then that they would merge the E301 UK and E301 Spain, making a total of about ten years contributions and I would end up with a small pension from one or both of them? Or, as I've been told for Spain, is the fact that I'm so far from retirement age and "apparently critically" missed the last 15 years, I'm likely to get nothing from the Spanish system - and from the limited amount I understand of the UK contribution system, probably nothing based on the input from the UK either? I am practically decided that I will not take up the autonomo opportunity as in the long term, it appears to not benefit me. Your post has made me rethink and any clarification from you would be extremely welcome.:juggle:

Why does everyone I speak to about this talk about the last 15 years before retirement as being the critical contribution years? I understand that the calculations of the pension appear to be based on this, but also that they are critical in actual contributions also. Is this total rubbish? So much so, that I may have misunderstood, but the impression left with me was that it's better to start at 50 and stop at 65, than start at 40 and end at 55. Even though the number of years contributed are the same, it's not the critical last 15 years. I've even heard of people who've stopped contributing at 62 due to illness or whatever, and losing a large percentage of their pension, even though they've worked all their lives. Is this all nonsense? Or am I getting expat rules mixed up with Spanish national rules??

Sorry for the lengthy post full of questions, but your little clarifier has thrown a massive spanner into my understanding of the finer points.

I should mention to clarify, that my provision for future retirement, etc, is made from my OH's private pensions, etc so the above is based on purely on my own scenario.

Many thanks in anticipation of your reply,
Tallulah.


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## DWPinSpain (Mar 2, 2009)

mojorojo said:


> That is extremely interesting.
> 
> Many thanks indeed for the info.
> 
> A further question, if I may - do you happen to know if that holds good for the Canary Islands, which is where I live (should have mentioned it before!).


It's the same all over Spain


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## mojorojo (May 9, 2009)

Does anyone know how much, roughly, a basic pension in Spain is, supposing that you had paid in for the last 15 years?

I'd be interested to know how the sliding scale works. 

Can anyone point me to the SS website please.

Assuming that I get a Certificado de Conviviencia, which shouldn't be a problem (thanks DWP for the advice), can I claim health benefits for my partner just because he doesn't happen to be working or would he have to register as unemployed.

I don't want to sound as we are here to milk the system. Quite the contrary. We don't expect benefits or health care but if we do pay into the system I want to make sure that it isn't one way traffic because we can't afford that!


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## Xose (Dec 10, 2008)

mojorojo said:


> Does anyone know how much, roughly, a basic pension in Spain is, supposing that you had paid in for the last 15 years?
> 
> I'd be interested to know how the sliding scale works.
> 
> ...


I think you'd be looking at somewhere around the 600€ mark, maybe a bit less or a bit more. There are many factors that impact. Not the least is if your minimum pension is being "made up". I know someone who paid the said 15 years - mind you, it was in the "Agraria" - farmer types - days, and that "rama" never did pay big pensions.... because people generaly paid minimum contribs. That person also has a small pension from the UK. Cut a long story short, the small pension meant she would not have the, today, minimum made up as she was getting another source of income. So she was left with about 500 - 550 a month including a widow's pension. Bottom line, the UK small pension impacted how much she got "made up" to today's minimum pension standards. You hear a lot about minimum pensions being revised, usually around election times, and lots of 800-850 talk, but I don't know anyone here getting the basic pension that gets that much... and I know many who get a lot less than 600 - mind, these might e people who have never contributed and if they have nothing, they do get a small minimum.

If anyone in your immediate family is contributing in the regimen general or Autonomo, the rest can be included under their number if:
They live with them.
They lack resources (his pension might be a problem!!)
The Tax man knows they get little or nothing - in effect, verifying a need due to lack of resources.

You might be asked for a "certificado de empadronamiento" and if they mean that, the local police verify who lives there and issue it. If you have good town hall legal people they will have this verified as the law does NOT require the police version. It's actually the town hall's "Lista de Empadronamiento Conjunto" they need and what the law apparently asks for and not the police's certificado. But sometimes it's better to go with the flow and just pay for the local police to do it and be done with it... it isn't a lot.

You (the person,people wanting to go under another's number) will be asked for either the last IRPF declaration in full or a certificate from Acienda stating that basically, there's not a lot there! The IRPF in full would show that they don't get a wage, for example, but they own several other properties other than their normal residence. Hopefully, the cottage won't be an issue here!

You will be asked for proof of relationship. In the case of Spain, it's always the "Libro de Familia", but I'm sure there is a process for those that don't have one.

As I said in a past post, your best bet for all of these steps, papers needed, critical path for what to do when etc., is to go to your local "Centro de Salud" and ask for the "administrador del centro". If they ask why, say it's " Para solicitar la targeta sanitaria y luego inscribirnos en el centro" - which basically means to apply for the medical card and sign up with the health centre. Sorry if you already got that.

By far the biggest consideration is being aware! - is your husbands personal pension declared in IRPF? Is the cottage, not your only and primay home, declared in IRPF (normally shown under the patrimonio assets bit)?
If they are not, then were into risky bizz - given that the Autonomo route is the cottage in question.

I appologise for seeming to be the bearer of bad news with the Personal Pension and the Cottage potentially being problems for your husband being under your SS number, but it's worth being aware just in case the end result is that he will need a private health contract after all.

The above are pointers. Some may be inacurate. I thought the benefit limits in Spain were a joke and recently found out helping a friend with a claim for subsistance, that they are per person. So it wasn't a case of him earning 400ish€ from wherever and getting nothing. It was a case of 400ish€ per head, so in his case, over 2400€ per month for the family unit. He got his subsistance. So it's always worth checking info like this for relevance to your particular situation.

Good luck.

Xose


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