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AN EXTRA payment into State pensions for parents per child will mostly benefit women, but not exclusively, the government has revealed this week.
Everyone who has a child of their own, including an adopted or foster child, will get €378 a year injected into their State retirement pension – a fixed sum per child up to a maximum of four.
Based upon a 12-month income per year, this means when a parent retires, he or she will receive €31.50 for every son or daughter, to a maximum of €126 a month if they have four or more children.
State pensions are, in fact, paid 14 times a year, with a double packet in August and at Christmas, meaning in practice, each pension payment will have been incremented by €27 per child, to a maximum of €108 and twice a year, by €54 for each child, to a maximum of €216.
The additional payment into the pension pot was initially for women only, but the European Court of Justice (ECJ) ruled this was discriminating against men.
Spain's government explained that its single-gender plan had been because mums are traditionally more likely to see a drop in their income from work than dads, resulting in a lower retirement pension – currently, across the board, men's State pensions are 30% higher than women's, and the government wants to to ensure 'retirement equality'.
To this end, the structure of the parental increment has changed, with the cash injection based upon reduction in salary during childcare years.
According to minister for inclusion and Social Security, José Luis Escrivá: “In the first two years after conceiving a child, mothers' earnings reduce in 98% of cases, but only 2% of cases see a fall in fathers' income – this means that over the years, and combined with the existing gender pay gap, women are more likely to end up with a smaller retirement pension.”
To qualify, parents need to show a reduction in income in the two years following the birth, rather than, as Escrivá says, the conception, of their child, or that becoming a mum or dad has 'affected their professional career'.
If both parents show this, or if neither of them does, the right to the extra pension payment will automatically go to the mother.
Until now, this State payment only applied once a parent had two or more children, but now takes effect from the first, meaning nearly 30,000 more women will benefit from it in 2021 alone.
It will also apply to pensions received for voluntary early retirement, which was not the case until now.
The sum will gradually rise in line with pension index-linking, but will not affect existing benefits received for those on the minimum or in receipt of the non-contributory State pension – it will not raise their income threshold and render them ineligible for these top-ups.
Escrivá says the system in favour of mothers will continue in place until the gender pension gap shrinks to less than 5%.
DETAILED talks over how to maintain the rights and freedoms of cross-border workers living in Spain and with jobs in Gibraltar have reached a conclusion and a new system ready to be put into place.