The Spanish Government has announced its Council of Ministers has approved draft laws on social security reform, following reaching a principle agreement on the plans with unions and employers yesterday. The reforms incorporate a range of changes to pension arrangements.

In an announcement today, the Government said that under the plan the statutory retirement age will “gradually increase” from 65 to 67 over a transitional period with exceptions in which an earlier age will be provided for.

Stated exceptions included parents whose careers have been interrupted to care for children, and workers in particularly ‘dangerous or arduous’ work.

Further, a compromise has seen the Government extend the full state pension to 65 year olds who can demonstrate pension contributions spanning 38.5 years.

Workers may also retire on the state pension at 65 if they have not contributed for 38.5 years, but will receive a reduced pension.

Retirement at 63 will be permitted, albeit on a reduced pension, providing the individual can demonstrate contributions spanning at least 35 years. Exceptionally, “in times of crisis”, workers will be permitted to retire at 61 providing they have contributed for at least 34.5 years.

OECD secretary general Angel Gurría welcomed the reform plans.

“[The plan] makes substantial progress in strengthening the link between contributions and benefit entitlements, which will reinforce work incentives and reduce the black economy. The fact that it was agreed with the trade unions and employers bodes well for its full acceptance and implementation.”

“We also welcome the provisions that provide support to working mothers and fathers. This is an integral approach that considers both financial sustainability and social responsibility,” Gurría said.

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