The ten million citizens who receive some form of pension (mostly pensioners) will begin to receive the payment of the extra Christmas installment in their bank accounts from today, together with the monthly instalment, as happens every year in this period such as Social Security Sociale settles these payments.
In reality, the Social Security Treasury does not plan to carry out these operations until next December 1st. But in practice, most banks advance these payments and materialize them in their customers’ accounts so that they have these amounts available for the next few days. The day on which this payment will be made will depend on the financial policy of each entity, so each customer is advised to consult their branch, as there is no specific day of mandatory fulfillment.
This payment will once again put a greater strain on the accounts of Social Security, which already spends almost 13 billion euros every month on the payment of all types of pensions. Three quarters of this amount correspond, as usual, to old age pensions. Specifically, according to the latest available data (October this year), these pensions represent 73.1% of the payrolls paid by the system, approximately 9,431 million euros. For widows’ pensions, 2,113 million euros have been allocated, while the paychecks for permanent disability amount to 1,145 million; that of orphans, at 171 million euros and that of benefits to family members, at 34 million.
Furthermore, the average pension from the social security system is 1,259.6 euros, 5.2% more than the previous year. This average includes the amount of the different types of pension (old age, permanent disability, widowhood, orphanage and for relatives). The average old-age pension, received by over two-thirds of all pensioners (6.5 million people), stands at 1,447.4 euros per month, after having increased on average by 5% compared to October 2023.
By scheme, the amount of the average old-age pension in the General Scheme is 1,605.5 euros per month, while in the Special Scheme for Self-Employed Workers it is 965.8 euros. In the coal mining sector, the average pension amount is 2,808.9 euros, in the maritime regime 1,602.7 euros. The monthly amount of new pension registrations in the system rose on average to 1,644.2 euros in September, according to the latest available data.
Furthermore, this same week pensioners will know what the revaluation of their pensions should be for 1 January 2025. With the latest law reform in hand, the Government will have to calculate this increase based on inflation data for the last twelve months , starting from December 2023 until November this year. Thursday will be the day on which INE will offer the advance CPI data for November, with which the average to be applied can be calculated.
In any case, the increase in pensions for next year will be lower than the revaluations of recent years. Especially when compared to 2023, when benefits increased by more than 8.5% on average, due to skyrocketing inflation, which forced the executive branch to inject more money into Social Security accounts. In 2024 pensions were revalued by 3.8%. For now, average annual inflation is less than 3%, awaiting definitive data from the Statistics.
What challenges does Social Security face in maintaining the sustainability of pension payments?
Interview between Time.news Editor and Social Security Expert
Time.news Editor (TNE): Welcome to our special segment, where we dive into the latest developments affecting millions of individuals. Today, we have an expert in Social Security and pensions, Dr. Laura Sanchez, joining us. Thank you for being here, Dr. Sanchez.
Dr. Laura Sanchez (DLS): Thank you for having me! It’s a pleasure to discuss such an important topic.
TNE: Let’s get right into it. The holiday season is upon us, and millions of pensioners are eagerly awaiting their extra Christmas installment. Can you explain the significance of this payment?
DLS: Absolutely. This extra Christmas payment is a vital addition to the monthly pensions that approximately ten million citizens receive. It helps many households manage their finances during the holidays, which tend to be a time of increased spending.
TNE: Interesting. The article mentions that while officially set for December 1st, many banks begin paying this installment early. Why is that?
DLS: Yes, that’s correct. Social Security technically schedules these payments for a specific date, but banks often choose to advance them. This practice varies by financial institution, and it’s intended to help recipients access their funds earlier, easing financial pressure during the festive season. However, it creates some uncertainty since individuals should check with their banks for precise payment dates.
TNE: That sounds practical. However, it seems there’s a significant strain on Social Security’s finances. Can you elaborate on the figures mentioned?
DLS: Of course. The Social Security system spends close to €13 billion every month on various pensions. A staggering 73.1% of this expenditure is on old-age pensions, adding up to about €9.4 billion. This reveals the pressure the system is under, especially with an aging population relying heavily on these benefits.
TNE: With retirement being a key concern for many, how does the average pension reflect the overall financial health of the pension system?
DLS: Currently, the average pension stands at €1,259.60, which shows a 5.2% increase from the previous year. This growth is positive, but it must be viewed in light of rising living costs, particularly in essential areas like housing and healthcare. While the average sounds promising, many pensioners may still struggle to make ends meet, especially those living solely on their pension.
TNE: It’s concerning to think about the overall welfare of pensioners. What future challenges does Social Security face as it continues to manage these payments?
DLS: One of the major challenges is ensuring sustainability amidst demographic shifts, such as an increasing number of retirees and a shrinking workforce contributing to the system. There may be a need for reforms to ensure that Social Security can meet its commitments without compromising the benefits that individuals depend on.
TNE: It seems like there’s a long road ahead for policymakers. What advice would you give to pensioners regarding their finances, especially with the upcoming holiday season?
DLS: I would advise pensioners to budget carefully, not just for holiday spending but for everyday expenses as well. Planning ahead can make a significant difference. Additionally, they should stay informed by checking with their banks and Social Security for any changes or important information.
TNE: Thank you, Dr. Sanchez, for sharing your insights. It’s clear the landscape for pensions and Social Security is complex, especially during this festive time.
DLS: Thank you for having me! It’s vital to keep these discussions going, especially in light of the upcoming challenges we face.
TNE: We appreciate your time, and for our viewers, stay tuned for more updates on this and other important topics. Happy holidays to everyone!