Article published by José Alberto León Alonso in El Día on 11/01/15.
The reform of widow's and orphan's pensions (survival benefits) is emerging as one of the issues that will be on the agenda of the Toledo Pact Commission, which from the beginning of 2016 will evaluate the results of the changes incorporated since 2011 into the public system. With Social Security with a permanent structural deficit of around 25 billion euros, the idea of removing widow's benefits from contributory financing and paying for them through taxes is finally gaining strength among parties and unions, as is happening in all European countries. Such a decision could be accompanied by other reforms that would respect the rights of current beneficiaries, but that could substantially modify access to the benefit for future generations. In this way, social contributions would be dedicated to what they owe, to pay the pensions and work incapacity of those who have worked to generate that right, and not to pay welfare benefits like the ones we are dealing with now.
In my opinion, if we only change who is responsible for survival benefits, we would be halfway to the necessary reform. It is true that this type of assistance benefits must be paid for with taxes and not contributions, but first we must ask whether the widow's pension makes sense in the 21st century as it is formulated. In Spain, the widow's pension is a life annuity to which all surviving spouses are entitled if the deceased was registered with Social Security or was a beneficiary of a pension from the system. If the death results from a common illness, the beneficiary must prove that the spouse had contributed for just over one year in the last five years and that the marriage had lasted more than one year or that they had children in common.
In October 2015 there were 2.4 million recipients of the widow's pension, and only 340,000 recipients of the orphan's pension. Widow's pensions will cost 20.8 billion euros in 2015, and orphan's pensions will cost 1.8 billion. As a particularity, there are currently 50 widows and 2 widowers who receive it and they are between 20 and 24 years old, since there is no age limit to receive it. For each of these few young beneficiaries of the widow's pension, the death of their spouse guarantees that they will receive an accumulated amount of more than half a million euros throughout their life, compatible with any other public or private perception. It's not like they won the lottery, but it seems like it. And there are almost thirty thousand recipients of widow's pensions under the age of 45, who will receive a cumulative total of around 15,000 million euros for this concept throughout their lives.
In reality, the right to receive this perception has varied over the years since its implementation in the 60s, expanding to more and more groups with hardly any restriction. In principle, this right was limited to widows over 45 years of age, or with permanent disabilities, or with dependent children. Of course, then only husbands contributed, so when they died the wife retained a pension. In the eighties, men achieved equal rights, and since then the rest of the restrictions due to age, disability or dependent children have been eliminated. And it is not a minor group. One in four pensioners in Spain receives a widow's benefit, which is why they constitute a fundamental pillar of the pension system. Although the planned reform focuses on the change in the financing model, the underlying problem has a broader scope, since the massive incorporation of women into the labor market in recent years forces us to rethink this figure to adapt it to new times, since it has lost meaning for a pension to be paid simply for a marital status and for it to be compatible with work.
In my opinion, it does not make sense to grant a lifetime pension to a young widower who is able and old enough to earn a living on his or her own, burdening the taxpayer with this cost. Respecting the rights already recognized, these benefits must gradually become welfare benefits and, therefore, be granted only to those people who really need them. That is, the pension should be linked to low income and granted only temporarily to young people, turning it into a kind of transition insurance towards their new situation. In many European countries these benefits are incompatible with other income, especially from work. This is the case of France and Italy, where they are only collected if the widow or widower earns less than a certain amount. In Germany, they are also linked to the age of the beneficiary (they are temporary for the youngest) and the existence of children. My proposal would be:
1st) For widows over 45 years of age or with permanent disability, an indefinite pension incompatible with work income, as long as their other income (pensions, leases, capital) was lower than the Multiple Effects Public Income Indicator (IPREM), which in 2015 is €7,455.14 per year.
2º) For widows under 45 years of age without disability, a temporary income as long as their income was less than the IPREM for a time equal to one third of the time of marriage, with a maximum of two years. It would be a transitional benefit, received until the surviving spouse could support themselves on their own and dependent on the time of cohabitation, without the need to place themselves in a position of economic dependence on the State, a situation that should be reserved for those cases whose severity prevents the survivor from subsistence on his or her own.
Will this issue enter the upcoming electoral campaign? I'd bet not.
U!
