Is permanent disability compatible with retirement?
If you are receiving a permanent disability pension and you reach retirement age, you may wonder whether you can also receive a retirement pension. In this post we will analyse this case to see if both pensions are compatible and if there are any exceptions to the general rule.
What is permanent disability?
Article 193 of the General Law on Social Security defines permanent incapacity as a contributory benefit that a worker may receive if he or she meets the necessary requirements and, after having undergone a medical assessment by the Catalan Institute of Medical and Health Assessments (ICAM), presents serious anatomical and functional reductions, which may be permanent, and which diminish or annul his or her capacity to work.
There are several degrees of permanent incapacity: partial, total, absolute and severe disability. The degree is defined according to the reduction in working capacity.
If certain conditions are met, the person suffering from permanent incapacity will receive a benefit. The incapacity benefit can be withdrawn for several reasons:
- The review of incapacity.
- The death of the person receiving it.
- Recognition of the retirement pension, in the event that the pensioner chooses this option and refuses the disability pension.
What is a retirement pension?
The retirement pension is a contributory financial benefit that covers the loss of income of a person who reaches retirement age (currently 65 years for those who have contributed 37 years and 6 months, otherwise the age is 66 years and two months, and will increase progressively until reaching 67 years), ends their working life and stops working as an employee or self-employed person or reduces their working hours or salary.
Is it possible to receive both a permanent disability pension and a retirement pension?
The general rule is that a permanent disability pension and a retirement pension are incompatible, so if you are entitled to both, you should choose the one that suits you best. Therefore, if a person has always contributed to the same Social Security scheme (General, Self-Employed, Sea Workers or Coal Mining), they must choose the disability pension that they have been receiving up to that moment or the retirement pension that corresponds to them. It is necessary to calculate the contribution base and the corresponding pension to see which is more profitable.
However, there are two exceptions to the general rule, i.e. two cases in which it is possible to receive both a retirement pension and a permanent disability pension. These are:
- When the permanent incapacity pension and the retirement pension derive from different Social Security schemes. For example, a person is self-employed and contributes to the Special Scheme for Self-Employed Workers (RETA) and, as a result of an illness, is granted permanent incapacity benefit. Subsequently, he/she works in a company under the General Scheme and retires.
- If the incapacity is due to an accident at work and is regulated by the old Regulation on Accidents at Work of 22 June 1956. In this case, the permanent disability pension and the retirement pension are compatible.
In short, if you are going to retire and you are receiving a permanent disability pension, it is necessary to have an expert Social Security consultant study your case and tell you what options you have to make both pensions compatible, if possible.