EU LAW

Euro court rules against Spanish pension calculation for migrant workers

Luxembourg-based tribunal says social security contributions made in other countries have to be taken into account

The European Court of Justice on Thursday ruled that Spanish rules for calculating the state pension benefits of workers who have also worked in other EU member states violate European legislation.

The same court in November also ruled that Spanish regulations on state pensions discriminate against part-time workers by requiring them to make a disproportionate amount of social security contributions.

The latest sentence relates to a Spanish worker who paid Social Security contributions for 10 years in Spain and five in Portugal. She was requested and was granted the right to a state pension by the Social Security system in Spain with effect from the start of 2006. Her monthly pension amounted to 337 euros. The minimum number of years for entitlement to a contributory pension in Spain is 15.

The Social Security system took into account the 10 years of contribution she had made in Spain, while for the period she had worked in Portugal included a fictitious period of five years of contributions at a zero rate, thereby considerably reducing her entitlements. The worker demanded that the actual contributions she made in Portugal be included in the calculation of her pension. If that had been the case, her monthly pension would have been 864 euros.

Spain granted her a pension, but it only amounted to 337 euros

When the Social Security system rejected her demand, she took her case to the Galician regional High Court, which then passed it on to the European Court of Justice (ECJ). The Luxembourg court in turn ruled that Spain had breached the free of movement of labor principle and the right to residence anywhere within the bloc, as enshrined in the EU Treaty. “Migrant workers should not suffer a reduction in their social security benefits as a result of having exercised their right to freedom of movement,” the ECJ ruled.

The ruling is binding and also applies to other EU nationals resident in Spain.

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