The contributory pension is an economic benefit granted by Social Security that aims to replace a person’s lack of income.
This pension consists of the delivery of an economic benefit for a certain time or for life that will depend on the time contributed, that is, the time of affiliation to Social Security and the regulatory base for which the contribution was made.
The Social Security system has two arms to deal with the economic security of people in the absence of income:
- Contributory arm: Substitutes the income that a person should receive, but that due to certain circumstances is not entitled to receive it in the form of a salary.
- Non-contributory arm: Compensates for the income that a person should receive, but for certain circumstances is not entitled to receive in the form of a salary.
The main difference between these two types of pension is that the contributory pension is based on what the person contributes.
On the other hand, the non-contributory pension takes care of people who have not contributed enough, and who without this type of pension would be left unprotected and outside the social protection that Social Security has as its objective.
Types of contributory pension
There are various types of contributory pension. This classification varies according to the contingency that gives rise to the need to receive this economic benefit.
- Permanent disability: Economic contribution granted because the worker finds himself in a situation in which, after an illness or accident, he presents anatomical or functional reductions that prevent him from carrying out his work normally. It can be a partial, total, or absolute disability, and the amount of the pension and its duration will depend on the type of disability and the regulatory base of the worker.
- Retirement: This economic contribution is the best known of the contributory pensions. It is a lifetime benefit that is granted when a person reaches the age (determined by the State) in which it is assumed that they cannot perform a job and therefore it will be necessary for them to have an economic contribution that will vary depending on their regulatory base. .
- Unemployment: It is an economic benefit granted for the loss of work. The amount and duration will vary depending on the amount of time the unemployed have contributed and their regulation base.
- Widowhood: The widowhood pension is an economic contribution given by the State to a person who needs it. This, due to the loss of the person with whom he lived and had an affective relationship and depended economically on her. It can be for life or temporary. For this pension to be granted, not only do the beneficiaries need to meet certain requirements, but the deceased had to meet other requirements.
- Orphanhood: The orphanhood pension is an economic contribution given by the State to a person who needs it due to the loss of their parents, on whom they depended financially. As with widowhood, it is necessary that both the deceased and the beneficiaries meet certain requirements (time of contribution, for example).
*For the writing of this article we have based ourselves on Spanish regulations. Other countries have another type of pension system.