New year, new prices: Minimum wage and pensions up, electricity rises and medications fall

THE start of 2019 has brought with it a freeze in outer-suburban train ticket prices, a rise in the minimum wage and inn pensions, among other changes which have been announced over the last few weeks – and in the last few hours of 2018.

Minimum salaries will go up to a gross €900 a month for a full-time, 40-hour-a-week job, based upon 14 monthly payments – a double wage packet, or €1,800, given in summer and at Christmas – which will mean most workers taking home around €1,000 a month if they receive 12 wage packets a year.

Parents on low incomes will receive €1,200 a year per child, which will benefit nearly 2.5 million children nationwide, although no other child benefit for the average-earning parent has as yet been agreed – an essential move which would allow many of the seven in 10 women of fertile age who do not yet have children to start a family.

More free pre-school places will be created – 70,000 across the country – for low-income families, and student grants will gradually increase between now and 2022 until the total reaches the European Union average of 0.44% of the GDP.

State pensions will rise by 1.6%, being 0.6 percentage points above inflation predictions, but retirement age will also rise – as part of a plan to progressively increase pension age to 67, from today, January 1, it now sits at 65 years and eight months.

Minimum pensions for retirees have risen to €835.80 per month for the over-65s with a dependent spouse, or €677.40 for single, divorced or widowed pensioners and €642.90 for those with a spouse who is not a dependent.

The average State pension, however, is typically higher, ranging from €800 to €1,200 a month, depending upon region.

Widows’ and widowers’ pensions will rise to €783.60 a month.

A temporary increase in Social Security contributions for self-employed workers – of €5 a month – has been introduced, and will bring with it a battery of improvements in conditions, such as not having to pay their contributions during maternity leave and being able to claim sick pay from the first month of temporary incapacity.

But a complete overhaul of the system will eventually be put in place, with contributions linked to real earnings, now that the tax and Social Security offices are able to share information.

The minimum age for partial retirement will drop to 61 years and eight months where the worker in question has paid at least 34 years and nine months in contributions, or 62 years and four months where the employee has contributed for 33 years.

A total of 1,200 medications will reduce in price in pharmacies from today, and petrol and diesel prices are down to €1.211 and €1.163 per litre respectively.

Consumer prices on electricity – around 41% of the bill – will be frozen, but the rest will rise, and bottled gas remains at €15.33 after going up nearly 5% in November, but no cost hikes are expected for at least this month.

Landline and standing charges for mobile phones and internet will rise for those whose services are contracted through the main State operator, Telefónica.

Income tax will rise for the highest incomes, and company tax will sit at a minimum of 15% whilst a 1% rise on wealth tax will apply to Spain’s richest residents.

Value-added tax – IVA, Spain’s answer to VAT – will drop from 10% to 4% on sanitary towels and tampons, and from 21% to 10% on veterinary products.

Europe-wide, the Eurozone interest rate, or Euribor, ended 2018 on -0.13%, and may gradually rise long-term, although it is not expected to exceed 0%.

Catastral or basic land values for IBI or property tax calculation purposes have been reviewed in 1,179 towns, villages and cities in Spain, which will come into effect in 2019 bills – about 700 have seen increases and 400 or so have experienced reductions, with the average result being a typical 1.92% fall across the country.

Postage stamps will rise by 9% from today – to 60 cents, from 55 cents, for national standard mail.