“In the system” – an introduction to Spanish social security

As a Chartered Accountant in Spain and working mainly with British clients, I am often asked if it is a good idea to be “in the system” and, if so, how do you join? Employees have to join but what of the self-employed?

Individual circumstances vary but if you can afford the contributions it makes a lot of sense to join the system, particularly when you have a family and aim to live in Spain long term. Joining the system means contributions of almost 250€ a month and having to register for VAT and income tax. Besides the peace of mind that comes from being “legitimate”, there are two main benefits:

Healthcare for themselves and their families: The alternatives are paying as you go which can be risky and private health insurance which will normally cost less than social security but exclusions and excesses usually apply.

Pensions: Anyone paying into the Spanish system will start accruing pension rights. If you also contributed in your home country (like the UK) you will get two pensions, both reduced depending on years spent contributing in each country or even possibly a full UK one and a reduced Spanish one. If you only ever contribute to the Spanish system you will need a minimum 15 years to qualify.

Once you have decided to join the system:

- go to the local “Tesoreria de la Seguridad Social” with your NIE and passport (plus copies). Complete a “Solicitud de Afiliacion” form and get social security number.

- Register with the Hacienda (Tax Office) as “autonomo” (self-employed). At this stage you will need to provide an address, social security number and NIE.

- Return to the Social Security office and complete a “solicitud de alta de autonomos” form and hand it in with a copy of your NIE and the proof that you have registered with the Hacienda (from the step above and called a “modelo 36”)

If you don’t wish to negotiate the bureaucracy alone, any english speaking accountant or gestoria, including my firm, will assist you. A longer version of this article and other information about spanish social security it can be found at www.advoco.es.