• ALEJANDRA OLCESE

    @AlejandraOlcese

Updated Wednesday, January 26, 2022-01:27

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The

Central State Administration

will make

transfers to Social Security

in 2022 worth

36,343 million euros,

but even so, the

budget gap between income and expenses

at the end of the year will be around

6,170 million euros, 0.5% of GDP ,

as reported on Tuesday by the minister of the branch, José Luis Escrivá.

"

Transfers from the State

and other organizations finance 20.07% of the expenses of the Social Security system and their amount amounts to

36,342.11 million.

About half of this item is made up of transfers to comply with the recommendation of the Toledo 2020 pact amounting to

18,396.00 million euros

(32.07% higher than budgeted in 2021)", is included in the Economic and Financial Report that accompanies the Social Security Budgets in 2022.

This is a volume of transfers -which are made with a charge to tax collection-

16.25%

higher than that which occurred in 2021, of 31,163 million euros, and even

higher than that which was made in 2020,

the year of the pandemic, 35,793 million euros. Until the covid broke out, the normal levels of contribution by the State were much lower:

15,643 million in 2019

, which had been reached after years of increases (in 2005, for example, the State transferred 4,840 million).

The increase in transfers in 2022 will be necessary given the measures approved by Social Security, such as the

2.5% rise for public pensions

, and 3% for minimum and non-contributory pensions, approved this Tuesday in the Council of Ministers ;

as well as the payment of a compensatory 'paguilla' for the inflation of 2021 that on average will be around 250 euros.

Both measures will mean

inflating pension spending in

2022

by 6,500 million euros

, which will aggravate the system's budget gap.

At the end of 2021, the deficit is 1% of GDP, about 12,000 million euros, and it is expected that in 2022 it will drop to 0.5%.

The 36,000 million from the State will be used to finance

improper expenses

(18,396 million),

supplements to minimum pensions

(7,050 million), other

benefits

(4,471 million), finance

IMSERSO's social services

(3,061 million) or finance

non-contributory pensions

(2,772 million).

million), among other things.

The 18,000 for improper expenses will go to

childbirth and care

benefits (2,879.6 million euros),

reductions in contributions

(1,690 million),

subsidies

(996 million), integration of

contribution gaps

(468 million), supplements of contributory pensions (884), early retirement without a reduction coefficient (378), pensions in favor of relatives (387), cover the cost of involuntary early pension at ages prior to retirement (2,079), an amount equivalent to 1.5 points of contributions for other concepts of a non-contributory nature (5,085) and contributory benefit supplements subject to income limits (3,549).

With contributions there is not enough to pay contributory pensions

The transfers of the money collected by taxes are necessary to complement what the Social Security expects to enter through

social contributions

: a total of

136,344 million euros

, since this will not be enough to assume the

expected expenditure of 175,166 million euros

in current transfers .

In fact, with the income from contributions, it will not even pay for

contributory pensions

, which will cost

143,090 million.

For this reason, the Ministry of Social Security has to undertake the

second part of the pension reform

in 2022, which will focus on the modification of the self-employed regime, the unstopping of the maximum contribution bases and the modification of the calculation period for the pension.

These measures will be added to the Intergenerational Equity Mechanism, which will apply a rise in social contributions, to try to reduce the hole in the system.

At the end of 2021, the Social Security deficit stands at 1% -about 12,000 million euros-, despite the fact that the State has transferred 13,800 million to it and that the system's income has broken records.

The maintenance of employment that has been achieved in the country thanks to the

ERTE

and the evolution of wages has allowed

the system to collect 132,000 million for

social contributions in 2021, the equivalent of 11% of GDP and which is 10% more than in 2020 and

6% more than before the pandemic

.

Conforms to The Trust Project criteria

Know more

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