The Spanish Minister of Inclusion, Social Security, and Migration, Elma Saiz, and the United States Ambassador to Spain, Julissa Reynoso, on behalf of the US government, have signed the Social Security Agreement between Spain and the US.
This agreement introduces improvements in the social protection of workers who spend part of their working lives in both countries. During the signing ceremony, Minister Saiz emphasised that “thirty-six years after the signing of the first agreement, we are taking a step further in promoting international labour mobility, which will undoubtedly be a powerful lever to continue stimulating our bilateral economic activity.”
“Great impact on hundreds of thousands of workers”
Together with the US Ambassador to Spain, they highlighted the importance of the agreement “for its impact on the lives of hundreds of thousands of workers,” as the new agreement allows for the application and implementation of crucial benefits, eliminates duplicate coverage, provides relief from double taxation, and will prevent gaps in the social security of many workers.
Key innovations
The main innovations included in the new text relate to the calculation of Spanish Social Security pensions, which will be more beneficial. From now on, two pension calculations will be made. The first based solely on contributions in Spain. The second by adding them to the time contributed in the United States. After comparing the two calculations, the most favourable one will be paid out.
Improved calculation
Furthermore, the calculation of the regular base amount of benefits when contributions from Spain and the United States are combined has been improved. These are based on the actual contribution bases before the last working day in Spain. This change benefits especially those who have spent the last part of their working lives in the US, without detriment to those who have worked in Spain immediately before applying for the benefit.
Another novelty relates to the inclusion of the regimes of civilian and military officials in the scope of the Agreement. This means that individuals who contribute in Spain under this regime may see their pension rights improved.
Improvements in posting of self-employed workers
Finally, the Agreement introduces improvements in the posting of self-employed workers and extends the duration of such postings, both for self-employed individuals and employees, to 5 years, extendable by 2 years under exceptional circumstances and subject to approval by the competent authority.
This new agreement aims to promote the mobility of insured workers in Spain and the US and stimulate bilateral economic activities.
