Having children can mean an increase in the pension for certain retirees and a recent Supreme Court ruling has reinforced the right of some beneficiaries to collect an amount higher than what they had been receiving.
The protagonist is the old maternity supplement due to demographic contributionan economic improvement that was in force for pensions caused between January 1, 2016 and February 3, 2021. Its amount depended on the number of children and could increase the pension by between 5% and 15%.
The new resolution is especially important for those who accessed the active retirementa modality that allows the pension to be made compatible with work. The Supreme Court establishes that the supplement must be calculated taking as a reference the full initial amount of the pension and not only the part that was received while maintaining work activity.
What is the maternity supplement that can increase the pension?
The old maternity supplement was created to improve certain contributory pensions for people who had had children. The rule established different percentages depending on the number of descendants.
The increase was 5% for those who have had two children, 10% with three children and 15% with four children or more. In this way, the higher the pension recognized and the corresponding percentage, the higher the supplement could also be.
Although it was initially aimed at women, the European Justice considered it discriminatory to automatically exclude men. This opened the door for numerous pensioner parents to apply for it when they met the required conditions.
Who may be entitled to the old supplement
One of the first pieces of information that should be checked is when was the pension recognized. The old supplement applies to certain pensions accrued between January 1, 2016 and February 3, 2021.
The number of children is also important. The previous regulation was based on a minimum of two childrenwhether biological or adopted, to access the increase.
Therefore, having had children does not in itself mean that any retiree can now request an increase. You must check the date of access to the pension, the type of benefit, the number of children and the specific circumstances in which the supplement was recognized or calculated.
What has changed with the Supreme Court ruling
The new ruling affects a much more specific situation. The Supreme Court has analyzed what happens when the beneficiary of the supplement is in active retirement and makes collecting the pension compatible with a work activity.
In these cases, only part of the pension could be received while continuing to work. The discussion was to determine whether the percentage of the supplement should be applied to that reduced amount or to the pension initially recognized.
The Supreme Court has concluded that it should be used as a reference the initial amount of the pension before applying the reduction corresponding to active retirement. This may mean that some pensioners have been receiving a lower supplement than what they were entitled to.
The difference can be important for the pensioner
The effect is easily understood with a example. A pensioner who had initially been recognized with a pension of 2,000 euros and who received a supplement of 10% would have a supplement of 200 euros if it is calculated on the full amount.
If that same percentage had been applied only to 1,000 euros because they were collecting 50% of the pension during active retirement, the result would have been 100 euros. The difference would therefore be 100 euros in the monthly calculation of the supplement.
This is an indicative example to understand the effect of the criteria established by the Supreme Court. The amount that may correspond to each pensioner will depend on their recognized pension, the percentage of the supplement and the particular circumstances of their file.
What can those affected claim now?
The ruling allows those who find themselves in this situation to request that check your complement calculation. The objective is that the corresponding percentage is applied to the full initial amount of the pension and not to the reduced amount that was received during active retirement.
In addition to the increase that may correspond, the claim may affect amounts that the pensioner stopped receiving due to a lower calculation base having been used. The specific situation must be reviewed in each case before the National Social Security Institute (INSS).
It is not the same complement that is currently granted
This complement must be distinguished from the one that currently exists. Since February 2021, the old maternity supplement was replaced by the contributory pension supplement to reduce the gender gap.
The current system has its own requirements and a different way of calculation. The Supreme Court’s ruling refers to the previous supplement, so the date on which the pension was accrued is essential to know which regulations should apply.
For those affected by the old system, reviewing your pension resolution can serve to verify two issues. First, if they were entitled to the supplement for their children and, second, if in an active retirement situation was calculated on the entire initial pension or on a reduced amount.