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Orphan’s pension: everything you need to know

Orphan's pension everything you need to know

No mother or father wants to think about their children needing an orphan’s pension. However, unfortunately, more than 340,000 people in Spain receive it every month.

Having a child is expensive. Several organizations have tried to calculate exactly how much it costs to be a parent in Spain, but the figures range from 98,000 to 355,000 euros from the time they are born until they are 18 years old. If we take the lowest figure as a reference, it means about 450 euros per month for 18 years; if we start from the highest, more than 1,600 euros per month.

Obviously, this money comes from the parents’ salaries. And, unfortunately, no one can be sure that it will always be there to cover the costs of their children. Social Security figures show that, in August 2021, more than 342,000 people were drawing an orphan’s pension. The amount? An average of 417 euros, far from the minimum 450 euros it costs to raise a child in Spain.

What is the orphan’s pension?
No mother wants to think that, one day, she may not be around to bring home the money. No father considers the option that he may no longer be able to meet his family’s expenses. However, as the data shows, this is a real possibility. The orphan’s pension is a financial benefit paid by Social Security to the children of a deceased person. It has different requirements, exceptions and amounts. Therefore, we summarize the most important things you should know about it, in the hope that your family will never need it.

Who can receive it?
This benefit can be requested when a deceased person leaves children up to 21 years of age, regardless of whether the other parent is still alive. It also includes the children of your spouse, provided they had been married for more than two years and lived together.

It can also be claimed for children over the age of 21 if they have a disability (absolute permanent disability or severe disability). Likewise, if you are over 21 and not working (or earning less than the minimum wage), you can receive it until you turn 25.

When the children are minors, the money is paid to the person who takes care of them. After the age of 18, it goes directly to the orphan.

When does the benefit end?
If one of these circumstances occurs:

The orphan reaches the maximum age (21 or 25, depending on income), unless he or she is disabled.
Someone adopts the orphan
The orphan marries
Death
It is proven that the parent is not actually deceased.
Is it compatible with a job?
Yes, the orphan’s pension is compatible with the income from work, both of the orphan himself or herself and of the spouse of the deceased and his or her widow’s or widower’s pension. However, both incomes can only be combined up to the age of 21. After that age, you can keep it until the age of 25 only if you earn less than the minimum wage.

How much money is it?
The pension that each orphan receives is 20% of the regulatory base, which varies according to the situation of the deceased (if he/she was registered with the Social Security) and the cause of death. If the orphanage is absolute, i.e., both parents have died, an extra payment of 52% of the regulatory base will be added.

There are many possible scenarios and the calculations are quite complex (all the information is available on the Social Security website), but we will give a basic example: death due to common contingencies. In this case, the regulatory base is calculated by dividing by 28 the sum of the deceased’s contribution bases for a period of 24 months. These 24 months are chosen within the 15 years immediately preceding the month prior to the month of death.

Thus, let us imagine that the contribution base of a mother of a family was 1050 euros per month. The regulatory base, using the above calculations, would be 900 euros. The orphan’s pension for her children would therefore be 20%: 180 euros per month. In the case of absolute orphanage, 52% of 900 would be added: 468 euros more.

It is important to add that this benefit is exempt from personal income tax (IRPF).

Minimum amounts
As you can see, the amount of money received is very small. There are minimum amounts fixed by law, although they are not very high either.

Orphan of a single parent: 210.80 euros per month or 2,951.2 euros per year. If he/she is a minor or has a disability of more than 65%, it goes up to 414.7 euros per month or 5,805.80 euros per year.
Absolute orphan: 733.30 euros per month or 10,266.2 euros per year. If there are several beneficiaries, the result of the payment to each one is calculated with a mathematical formula: 210.80+(522.5/number of beneficiaries).

Maximum amount
Just as there is a minimum amount, there is also a maximum. The orphan’s pension for all children may not total more than 100% of the regulatory base. If the spouse is still living and receives a widow’s or widower’s pension, the total of the orphan’s pensions may not exceed 48% of the regulatory base. In short: the family cannot receive more money than the deceased brought home.
Are there requirements for the deceased?
If you die and you were registered with the Social Security (or in an assimilated situation, i.e., unemployed or on leave of absence), there will be no problem for them to claim the benefit. Nor if you are a pensioner or the death is caused by an accident or occupational disease.
On the other hand, if you are not registered at the time of death (neither unemployed, nor on leave of absence or other cases contemplated by the Social Security), you need to have contributed for a minimum of 15 years.
When do I receive the money?
The benefit can be requested at any time after the death of the parent. From then on, the file is studied and resolved within a maximum period of 90 days. Currently, Social Security answers them within an average of 13 days.
Payment is monthly, with two extra payments in June and November. In the case of the occupational accident and occupational disease pension, it will be in 12 payments.
If it is requested within three months after death, it will be given from the day following the date of death or, if he/she was a pensioner, from the first day of the following month. If it is requested after three months, it will be paid retroactively for a maximum of 3 months from the date of request.
What procedures are required for the orphan’s pension?
It is only necessary to fill in the application form for Survivors’ Benefits and attach the personal information requested on the form. Among other things, the details of the deceased and the applicant, bank details, income, etc. are required.
The application must be submitted at any office of the National Social Security Institute.
Rely on the life insurance
The orphan’s pension can be very useful for a household that has lost one of its pillars, but it is not usually enough. If you are a parent, it will be hard for you to think that one day you may not be around to take care of your family, but it is a very real risk. You can secure your family’s future with life insurance. With it, you know that money won’t be an issue for your children if you can’t be with them. It will only take a minute to take a look at our comparator to convince you: having a life insurance is very cheap and gives you a lot in return.

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