a) Benefits derived from social security systems

Among the benefits derived from social security systems that are considered work income are the following:

• Social Security and Passive Classes

  Pensions and passive earnings received from public Social Security regimes and passive classes are considered income from work, regardless of the person who generated the right to receive them. Likewise, other public benefits for situations of disability, retirement, accident, illness, widowhood, or similar constitute employment income.

  However benefits received for absolute permanent disability or severe disability, pensions for disability or permanent disability the passive classes regime, provided that the injury or illness completely disables the recipient for any profession or trade, as well as family benefits referred to in letter h) of article 7 of the IRPF .

• General compulsory mutual funds for civil servants ( MUFACE , MUGEJU , ISFAS ), orphanages and other similar entities

  The benefits received by the beneficiaries of the aforementioned mutual societies, orphanages and other similar entities constitute income from work.

• Pension plans

  Employment income includes benefits received by beneficiaries of pension plans and those received from pension plans regulated by Directive 2003/41/ of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational pensions, regardless of the contingency covered by them (retirement, total and permanent incapacity for in one's usual profession or total and permanent incapacity for any work, and severe disability, severe dependency or great dependency and death of the participant or beneficiary).

  This same consideration is maintained, regardless of the form of collection of said benefit: income, capital or in mixed form, income and capital.

  The use of vested rights in pension plans in exceptional cases of serious illness or long-term unemployment is also considered to be work income.

• Mutual provident societies:

  The following are considered employment income: benefits received by beneficiaries of insurance contracts taken out with mutual social security societies, regardless of the contingency covered by them (retirement, disability, death, severe or great dependency and unemployment for working members), the contributions of which may have been, at least in part, deductible expenses for determining the net income from economic activities (in this case, the mutual society acts as an alternative system to the special Social Security regime for self-employed workers) or subject to reduction in the taxable base of IRPF (in this case, the mutual society acts as a supplement to the mandatory Social Security system).

  Social security mutual societies are insurance entities that provide a voluntary insurance modality complementary to the mandatory Social Security system, whose legal regulation is found in articles 43 and following of Law 20/2015, of July 14, on the regulation, supervision and solvency of insurance and reinsurance entities (BOE of July 15). The name of these entities must necessarily include the indication "Mutual Fund for Social Security". Due to their special fiscal relevance, the following can be highlighted, among others: professional mutual societies established by professional associations and mutual societies that act as an instrument of corporate social security in favour of workers. See also the ninth Additional Provision of the Tax Law.

  The requirements that contributions must meet to be considered as deductible expense or as reduction in the tax base are discussed, respectively, in Chapters 7 and 13.

  The integration into the tax base of the benefits received from Social Security Mutual Societies must be carried out, depending on the nature of the contingency covered, in accordance with the following criteria:

  1. Retirement or disability benefits

     These benefits are included in the recipient's tax base, as income from work, exclusively to the extent that their amount exceeds the contributions that could not be reduced or decreased in the tax base due to failure to comply with any of the subjective requirements legally provided for this purpose.

     In the case of contributions made before 1 January 1999, when the amount of the contributions that could not be reduced or decreased in the tax base cannot be proven, 75% of the retirement or disability benefits received will be included.

     See in this regard the second transitional provision of the Tax Law.

     Notwithstanding the foregoing, benefits for permanent disability or severe disability received by professionals included in the special Social Security regime for self-employed workers or freelancers, which derive from insurance contracts signed with social security mutual societies that act as alternatives to Social Security regime, are exempt from ##1## IRPF ##1##, provided that they are benefits in situations identical to those provided for absolute permanent disability or severe disability by Social Security.

     See in this regard the exemption for "Benefits for permanent total disability or severe disability received from Social Security or from entities that replace it" in Chapter 2.

  2. Other benefits

     The remaining benefits, including those received in the event of death, are taxed as employment income in their entirety.

  3. Consolidated rights provision

     The early disposal of economic rights of mutual members is possible in the same cases provided for pension plans. Amounts received from the early disposition, in whole or in part, of vested rights are taxed as employment income.

• Corporate social security plans and other collective insurance contracts that implement the pension commitments assumed by companies

  The benefits received by beneficiaries of company social security plans are in all cases considered to be work income.

  Please note that the early disposal of economic rights of insured persons is possible in the same cases as those provided for pension plans.

  For more information, the concept and requirements that must be met by corporate social security plans are discussed in Chapter 13.

  Retirement and disability benefits received by beneficiaries of collective insurance contracts, other than company social security plans, which implement the pension commitments assumed by companies, in the terms provided for in the first additional provision of the consolidated text of the Law regulating Pension Plans and Funds, and in its implementing regulations, will be included in the tax base to the extent that their amount exceeds the contributions imputed for tax purposes and the contributions directly made by the worker.

  Regarding the right of redemption in collective insurance contracts that implement pension commitments assumed by companies, see the first Additional Provision of the Personal Income Tax Law . Furthermore, it should also be noted that, in accordance with the first Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds in the wording given by Law 27/2011, of August 1 (BOE of the 2nd), collective dependency insurance is admitted, as of January 1, 2013, as insurance contracts suitable for implementing pension commitments assumed by companies. See the point regarding dependency insurance in this same section.

  The benefits received by the heirs as a result of the death of the insured worker do not constitute personal work income since their receipt is subject to the Inheritance and Gift Tax.

• Assured savings plans

  The benefits received by beneficiaries of insured pension plans are in all cases considered to be work income.

  The concept and requirements of insured pension plans are discussed in Chapter 13.

• Dependency insurance

  The benefits received by beneficiaries of dependency insurance in accordance with the provisions of Law 39/2006, of December 14, on the Promotion of Personal Autonomy and Care for People in Situations of Dependency ( BOE of 15) are considered work income.