EconomicsMoncloa Increases Contribution Of Taxes To The Payment Of Pensions By 32%

Moncloa Increases Contribution Of Taxes To The Payment Of Pensions By 32%

The pension reform continues to display its effects on the public system. By 2022, the Government will increase by 32% the transfer received by Social Security from the General Budget and nurtured with tax revenues from the State and which will mainly serve to defray the so-called improper expenses thrown into the System and that the ministry itself figures at 23,000 million euros .

According to the draft General Budgets for 2022, the transfer that the State Social Security will receive will go from 13,929 million euros this year to 18,396 million euros . As in previous years, the amount will be released for payment, in addition to improper expenses, to face the moments of greatest financial stress experienced by the System throughout the year, and more specifically in the months of June and November, when pays the extra pay for pensions and where the payroll of contributory benefits reaches 20,000 million each month.

The largest ministerial party
The Ministry of Inclusion, Social Security and Migrations will take the largest item of the Budget for 2022, with 33,478 million, taking into account that the transfer of 18,396 million is included to guarantee the payment of pensions.

According to the Budget Bill approved this Thursday by the Council of Ministers, the Ministry headed by José Luis Escrivá will receive an item of 15,082 million without including this transfer to Social Security, which represents 1.4% more compared to last year.

After Inclusion, the next Ministry with the largest budget allocation is that of Transport, Mobility and Urban Agenda, with 13,330 million, 16.2% more. After him, Defense is placed, with 10,152 million, 7.87% more than last year, which includes special Defense programs. Both ministries are usually the ones that receive the highest amounts for the investments they make.

They are followed by the Ministry for the Ecological Transition and the Demographic Challenge, which brings together a total of 9,742 million euros, including 3,695 million from the electricity sector, and the Ministry of the Interior, with 9,362 million, 5.1% more.

For its part, the Ministry of Education and Vocational Training will receive 5,605 million, 2.6% more; followed by the Ministry of Economic Affairs and Digital Transformation, with 4,859 million, 6.8% more; the Ministry of Social Rights and Agenda 2030, with 4,608 million (+ 20.1%); the Ministry of Industry, Commerce and Tourism, with 4,382 million (+ 82.9%) and the Ministry of Science and Innovation, with 3,843 million (+ 18.9%).

After these stand out the 3,130 million from the Ministry of Finance, 8.1% more; the 2,278 million from the Ministry of Labor and Social Economy, including 672 million of rebalancing transfer to the Sepe, and the 2,828 million for Health, which has seen its departure reduce by 17.3% due to the lower incidence of the expected pandemic. For its part, the Ministry of Justice will receive 2,247 million, 11.6% more.

Improvement of the deficit
With all this, despite the financial difficulties that Social Security has gone through during the past year and a half of the pandemic, being the main public body in charge of the deployment of the so-called social shield to withstand the crisis, the measures applied by the Ministry of Inclusion, Social Security and Migration seem to be improving at a forced marches the financial health of the administration in charge of the public pension system in our country.

Specifically, in terms of financial health, the improvement since 2018 is 80%, which is the reduction in the financing needs foreseen for Social Security in 2022, compared to the time of the arrival of the Socialist Government.

According to the authors of a study on Social Security finances prepared by professors of the Pension Research Group, in 2021 these transfers are already ordinary because they are included in the Social Security budget as “transfers to comply with the first recommendation of the Toledo 2020 Pact “.

“But it is very possible that they are not enough and have to be supplemented with additional transfers,” due to possible imbalances in the level of income of the System and advance of expenses in the new benefits, says the document to which the Economist has had access .

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