Tuesday, February 14, 2017

Health care and retirement coverage in Spain

This post is mostly looking into the situation of Spaniards living abroad but eventually planning to go back to Spain.

For healthcare covered by taxpayer pocket, the governing law is really wide and covers almost everybody. Some that fall outside could be a resident that makes more than 100k Euros but doesn't pay Social Security (which includes Health Care). Or a Spaniard that is not resident. Nevertheless, if the Spaniard is visiting, he is still covered as long as nothing else does:

  • "Los trabajadores por cuenta ajena españoles de origen que no residan en Estados miembros de la Unión Europea, ni en Estados parte del Acuerdo sobre el Espacio Económico Europeo ni en Suiza que se desplacen temporalmente a España tendrán derecho a la asistencia sanitaria en España, con cargo a fondos públicos, a través del Sistema Nacional de Salud cuando, de acuerdo con las disposiciones de Seguridad Social española, las del Estado de procedencia o las normas o Convenios internacionales de Seguridad Social establecidos al efecto, no tuvieran prevista esta cobertura."

I guess that integrates de-facto such a Spaniard in the coverage, although there is a doubt about treating not urgent cases ("go back home and take care of it there").

How about retirement?
Wikipedia, as usual, is a good reference but I think only shows the old regime (which somehow you can choose, if you want?). In the new regulations, it seems that to compute the base of what you get paid you use the last 25 years of data. The formula is tricky and it never gives 100% of your pay (you divide by 350, but there are only 300 months in 25 years). But you can actually start getting paid after paying only 15 years. The kick is that then you get only 50% of the base. The percent increases by 0.19% every month, the first 248 months and then by 0.18% the rest, to cap at 100% after 300 months (25 years). Notice that if you only worked 15 out of 25 years, the first 10 are included on the base but at much lower rate (not zero, though, but minimum salary type stuff). So, if it was zero it would be 50% of 15/25 = 30%, but it'll be a bit higher (as again, it is not zero...) on one side, but lower as you actually owe to compute the base by dividing by 350, not 300 (25 years).

I guess I can decide soon if it is worth... How much is the payment?
A friend suggested to sign up as self-employee (autonomo). To compute how much you would pay, you would choose your salary from a range (between 893 and 3642), and then apply a rate (29.8%). So, say that you want to have the maximum salary at retirement but start paying when you are 52 (15 years before the 67 years of retirement age). You would pick the 3642x29.8%=1085 Euro/month. Nevertheless, you have to make sure you are paying that by the time you reach 47 or otherwise the maximum is limited to 1900. Anyhow, if I am thinking this right, notice that you pay about 1/3 of what you claim to make (which becomes the base eventually). So, when you start getting paid back (after retirement) you actually make about the same per month (in the scenario where you only paid for 15 years). Looks a bit like a break even deal (as you don't know if you are going to live past 67+15=82 years).

The kicker is that my friend was considering doing that while he was actually working on a foreign country (non-EU) so, probably was not legal (?).


No comments:

Post a Comment