How to retire early after collecting unemployment: these are the requirements and the pension you have left

Access to early retirement is traditionally understood as a way of leaving work early by accepting cuts in the retirement pension in exchange for early retirement, but the truth is that it can be achieved through other situations such as, for example, the collection of a contributory unemployment benefit, what we know as unemployment.

Unemployment is the benefit paid by the SEPE (Public State Employment Service) to people who have contributed, within the six years prior to the legal situation of unemployment, for at least one year for unemployment. Its maximum duration is two years, it depends on those unemployment contributions and it forms the great protection of the system for people who have lost a job, above unemployment benefits.

If the legal situation of unemployment arrives in the final stage of the worker’s career there is the possibility that the citizen can go directly from collecting unemployment to early retirement. The reason is that Social Security allows access to early retirement both in situations of registration and assimilated, a category within which the legal situation of unemployment is included.

In the first place, of course, the worker will have fulfilled the prerequisites to receive unemployment: being registered as a job seeker, being legally unemployed, having signed the activity commitment, not having the ordinary retirement age, not having the right to an incompatible pension and not to carry out full-time employment or self-employment, as explained by the SEPE on its website.

During the time that the contributory unemployment benefit is received, the citizen will continue to contribute for retirement. Specifically, this contribution will be 4.7% of the regulatory base, which is obtained by calculating the average of the contribution base of the contribution bases for professional contingencies of the previous 180 days.

This is important because, during the time that they receive unemployment, the citizen is not left off the hook in terms of contributions and will continue to increase the number of years contributed, which may be key to accumulating enough time to be able to retire early and meet all the necessary requirements.

The modality that the citizen can choose to retire early will depend on their personal circumstances and the time of advance.

Involuntary early retirement after collecting unemployment

The citizen may avail himself of involuntary early retirement, which derives from an involuntary cessation of work, up to four years before the ordinary retirement age: from the age of 61 (if you have contributed for 37 years and six months) or from 62 years and two months (if you have contributed less than 37 years and six months). Thus, if you find yourself receiving unemployment and reach this age, you would already be able to retire early.

In any case, other requirements must be met, such as being registered as a jobseeker at least six months before the application, accumulating a minimum of 33 years of contributions (one of the ‘military’ or substitute social benefits can be used) of the which two must occur between the last 15 and the cessation of work must be due to one of the following causes:

-A collective dismissal for economic, technical, organizational or production reasons.

-An objective dismissal for objective reasons.

-An termination of contract by judicial resolution in cases of insolvency.

-Death, retirement or disability of the employer, as well as the extinction of the legal personality of the company.

-A contract termination due to force majeure.

-A termination of the contract by the will of the worker in cases of geographical mobility, substantial modification of working conditions or serious breaches of the employer.

-An termination of contract for reasons of gender violence.

Voluntary early retirement after collecting unemployment

There is also the option that, without obeying the previous cases, the worker has received unemployment benefits for a different contract termination. In these situations, you will be allowed to access voluntary early retirement, which is executed by the will of the worker to advance his retirement. This retirement contemplates advances of a maximum of two years, so that people will be able to avail themselves of it from 63 or 64 years and two monthsdepending on the price.

In addition, they must meet another condition: have at least 35 years of contributions (one of the ‘mili’ or substitute social benefit can also be used), of which two must occur within the last 15 years prior to applying for the pension .

What will be the amount of the retirement pension

Everything will depend on the type of early retirement chosen by the worker. The calculation of the pension will be the same as that used for the rest of the people: Social Security takes into account the contributions of the last 25 years to obtain the regulatory base and the total number of years worked to know the percentage of that regulatory base. to which you are entitled.

Later, the pension will have to be subjected to a reduction coefficient that depends both on the type of early retirement and on the duration of the worker’s career. The new coefficients introduced by the ‘Escrivá reform’ can be consulted in the text of Law 21/2021, of December 28, guaranteeing the purchasing power of pensions: those for voluntary early retirement range from 2.81% to 21% and those of the involuntary go from 0.50% to 30% reduction.

Voluntary early retirement after collecting unemployment: an example

Miguel is a worker who loses his job at the age of 62, accrediting at that time 36 years of contributions and with the right to receive the maximum period of unemployment, two years. The termination of his contract is not among the assumptions that allow him a voluntary early retirement, so he begins to receive unemployment.

After a year and a half of collecting unemployment, Miguel will then be 63 years and six months old and have a contribution of 37 years and six months after having added the contributions for the collection of unemployment. If he so desires, he can already retire early, since his ordinary retirement age at that time will be 65 years and he would enter within the maximum two-year advance of voluntary early retirement.

If you decide to retire early, however, you will have to assume the cuts in the retirement pension that correspond to your contribution, time in advance…