Social Security has already experienced a significant recovery in 2015, with the help of job creation, and which is financed by social security contributions paid by employers and employees. And the government expects this recovery remain strong in 2016. So those responsible for designing public accounts for next year expected to raise 117 241 000 for the payment of social security contributions, which will mean 6.7% more than in 2015, when is now projected to grow by 6.8%.
Indeed, it is estimated that improving employment boost revenue from fees of employees by 8.3%, while revenue it brings will be cut The State quotes 13.3% unemployed. This significant increase in revenue from contributions of employees is that He expects employment to grow by 3% (600.0000 new jobs), the maximum and minimum contribution bases 1% and average bases (which can be equipped to the evolution of wages) 1.4% increase.
All of these revenues will go to pay contributory pension Social Security will require an expenditure of 118.941 million euros next year, . 2.8% more than in 2015
This increase in spending on pensions due to three factors: the increasing number of pensioners; the replacement rate (the new pensions are around 37% higher than those of pensioners who die) and the previously announced increase of 0.25% of the amounts of pensions law imposing minimum. Thus, the maximum pension for 2016 is fixed at 2567.28 euros (35,941.92 per year), while the minimum pension for over 65 years with a dependent spouse shall be monthly 784.9 euros (10,988, 60 per year).
In addition to the fee revenue, the state transferred to the social security 13.199 million euros for the payment of other non-contributory pension concepts. Fundamentally it is the payment of supplements to minimum pensions, which are the aid given to pensioners who have not contributed enough to reach the statutory minimum pension of each year, which will allocate 7.409 million and to pay non-contributory pensions and family protection, which will involve a cost of 2.454 and 1.532 million respectively.
So, for the second consecutive year, the process called separation of funding sources met the Social Security and establishes the contributions that employers and employees pay are used exclusively to pay contributory benefits and other welfare benefits not paid with tax revenue transfers to the State Social Security.
No But this separation of funding sources unlikely to be completed if what you want is to make it financially viable social protection system. In fact, for three years, the government has to resort to the Reserve Fund to pay pensions and overtime generally is not enough because it takes in from contributions.
Hence, the Minister of Finance himself, Cristobal Montoro, said yesterday during the presentation of public accounts for next year in the Congress of Deputies, the government “is aware of the financial strain that runs through the Social Security”. Therefore he reminded the latest reforms that involved the creation of revaluation factor and des sustainability which will begin implementation in 2019 and will link the amount of new pensions to life expectancy, cropping if this grows and vice versa . But he went further and announced that the government wants the Toledo Pact study ways of financing the social security contributions alternatives to Social Security. Specifically, Montoro meant that “the State financed less contribution taxes from Social Security.”
Additional provision 65
In fact, the government has wanted to reflect on This proposal written in the articles of the budget next year. 65th additional provision indicates that once the source separation has been financed with a minimum tax allowances, the Government will move in the “full funding of universal charge of the budgets of public administrations and non-contributory benefits” . That is, taxes. To do this, “will assess the conditions of the services involved in the system that may have this consideration.”
At this point, Montoro avoided mention what kind of benefits Social Security would be removed from the funding contributions but to date, a number of experts agree the least contributory, for example, pensions for widows and orphans.
That said, the finance minister also said if that financing via taxes would be through a tribute in particular, giving finalist character but as an example that at present “the VAT and finances supplements to minimum, so who disappoint with this tax also harms the lowest pensions,” he said Montoro. Although thereupon insisted they do not plan to raise VAT
With this proposal seek ways of fiananciación of alternatives to Social Security contributions, the Government also plans a second derivative:. To reduce these quotas social, because in the opinion of Montoro are a tax on jobs. Thus, although the unions recently considered that it was time to increase employers’ contributions to increase income from Social Security, the Minister of Finance yesterday flatly rejected this possibility. “We do not agree to raise prices but on the contrary, try them down and replace them with other sources of financing”.
As set out in the known yesterday budgets, the maximum contribution base for next year It is set at 3,642 euros per month, after increasing 1%. The same will increase the minimum wage bases and autonomous General Regime are affixed to 764.1 euros and 893.2 euros per month, respectively.
Less spending on unemployment
Together with pensions, another great social spending is starting to unemployment benefits. In the worst years of the crisis, this aid came require payment of more than 31,000 million euros. While in 2016 the Executive plans to allocate payment of unemployment benefits and subsidies totaling 19,820.94 million euros, 21.7% less.
This will save 5,480, 74 million euros compared to the initial budget for 2015. However, sources pointed out that the actual Administration later this year, depending on the implementation of the budget, savings could be in the vicinity of 3,000 million euros.
In any case, the decline in spending on unemployment is attributed not so much to lower the number of beneficiaries and the transfer of beneficiaries of contributory benefits to other subsidies as the Active Insertion Income or new Activation Program for employment for long term unemployed with dependents and have exhausted all aid. In fact, the amount is less. Thus, the government expects a reduction of 22% of beneficiaries of contributory benefits compared to the group that charged in January, while the reduction of the beneficiaries of welfare benefits alone will be cut by 12%.
Credit for training for employment will grow by 5.9% to 2.087 million euros; while business hiring bonuses to 1,635 million, 9% more than in 2015.
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