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Practical manual for Income Tax 2024. Volume 1

7. Pensions due to uselessness or permanent disability of the passive class regime

Regulations: Art. 7.g) Law Income Tax

Pensions for disability or permanent incapacity are exempt from the passive classes regime, provided that the injury or illness that caused them completely disables the recipient of the pension for any profession or trade.

In accordance with the provisions of the Order of the Presidency of the Government of 22 November 1996, which establishes the procedure for issuing medical opinions for the purposes of recognising certain benefits of Civil Service Employees ( BOE of 23 November), in cases of retirement due to permanent disability for service, it must be stated whether the civil servant's injury or pathological process, in addition to disabling him/her for the functions of his/her Corps, completely disqualifies him/her for any profession or trade and, where appropriate, whether he/she needs the assistance of another person to carry out the most essential acts of life.

See in relation to these pensions, article 28.1 of the consolidated text of the Law on Civil Servants of the State, approved by Royal Legislative Decree 670/1987, dated 30 April ( BOE of 27 May) and Chapter I of Title I (articles 1 to 8) of Royal Decree 710/2009, dated 17 April, which develops the provisions of Law 2/2008, of 23 December, on the General State Budget for 2009, regarding civil servant pensions and certain social security benefits ( BOE of 30 April) .

The aforementioned Law 2/2008, of December 23, in its thirteenth Additional Provision, provides that the taxpayer may request new assessment the extent of the permanent disability so that if, after the recognition of the retirement pension or retirement due to permanent disability for service, these three circumstances occur:

  • that a worsening of the pensioner's illness or injury occurs,

  • that such illness or injury disables him from performing any profession or trade,

  • that such circumstance occurs before reaching the retirement age or compulsory retirement,

The body that has recognized the right to a retirement pension or retirement pension due to permanent disability for service may agree to increase the amount of the pension up to 100% of what would have corresponded to him, following a mandatory and binding opinion issued for this purpose by the expert medical body.

Well, the Supreme Court in its Judgment number 1706/2023, of December 15 ( ROJ : STS 5755/2023) declares as case law that the amounts received for the retirement pension due to permanent disability resulting from injury or illness that completely disables the pension recipient from any profession or trade are exempt from personal income tax, by application of art. 7.g) of the Personal Income Tax Law ##2## with effect " from the first day of the month following the submission of the application that gave rise to the resolution to increase the pension, in the terms provided for in art. 7 of Royal Decree 710/2009, of April 17" .