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Spain to absorb a further 1 Bln from Social Security System

Source: El Pais El Pais - Sat 11th Jan 2014
Spain to absorb a further 1 Bln from Social Security System

The Spanish Social Security system plans to take in an estimated billion euros more a year by including a series of non-wage remunerations provided by companies to employees such as contributions to pension plans and meal tickets that were previously exempt, or partly exempt, in the calculation of contributions to the system.

According to a decree published in the official gazette (BOE) on December 21 of last year, employers will have to pay 30% of the value of such non-wage supplements and workers 6% to the Social Security system.

However, the new system will not affect those who earn the most, as the maximum amount of Social Security contribution has not been changed.

Other items also now included in the calculation of contributions include employee health insurance plans, school and nursery fees and company shares.

The Social Security coffers have been strained by high unemployment, which has lowered the level of revenues from contributions and increased outlays for benefits. The system is expected to have closed last year with a hefty deficit.