8.4.3. Additional reduction for contributions to the spouse's social security systems

In addition to the reductions made in accordance with the limits indicated in the previous section, taxpayers whose spouse does not obtain income from work or economic activities, or obtains such income in an amount less than 8,000 euros per year, may reduce the tax base for contributions made to the social security systems mentioned in the previous sections in which said spouse is a participant, member or holder, with a maximum limit of 2,500 euros per year.

The programme will ensure that the limit on the spouse's work and economic activities does not exceed 8,000 euros, and that the amount of the reduction does not exceed 2,500 euros.

Contributions that are subject to reduction by the taxpayer for this reason may not be used to reduce the taxable base of the spouse. Therefore, the amount shown in this section should not appear as a reduction in the spouse's tax base for contributions to social security systems.

These contributions will not be subject to Inheritance and Gift Tax.

CONTINGENCIES COVERED BY PENSION PLANS (art. 8.6 Legislative Royal Decree 1/2002)

The contingencies covered by the Pension Plans may be:

1. Retirement. To determine this contingency, the provisions of the corresponding Social Security Regime will be followed.

   When it is not possible for a participant to access retirement, the contingency will be deemed to have occurred from the ordinary retirement age in the General Social Security Regime, at the time when the participant does not exercise or has ceased his or her work or professional activity, and is not contributing to the contingency of retirement in any Social Security Regime. However, the corresponding pension benefit may be paid in advance from the age of 60, under the terms established by regulation.

   Pension plans may provide for the payment of the benefit corresponding to retirement in the event that the participant, regardless of his or her age, terminates his or her employment relationship and becomes legally unemployed as a result of a redundancy plan approved by the labour authority. Conditions may be established by regulation for maintaining or resuming contributions to pension plans in this case.

   Upon accessing retirement, the participant may continue making contributions to the pension plan. However, once the collection of the retirement benefit or the early collection of the benefit corresponding to retirement has begun, contributions may only be used to cover the contingencies of death and dependency. The same regime will apply, when access to retirement is not possible, to contributions made after the ordinary retirement age. The conditions under which retirement contributions may be resumed upon subsequent registration in a Social Security Scheme for exercising or resuming activity may be established by regulation.

   The provisions of this letter a) shall be understood without prejudice to the contributions in favor of beneficiaries made by the promoters of the pension plans of the employment system under the provisions of section 3 of article 5 of Royal Legislative Decree 1/2002, of November 29, which approves the consolidated text of the Law on the Regulation of Pension Plans and Funds.

2. Total and permanent incapacity for work in the usual profession, or absolute and permanent incapacity for any work and severe disability, determined in accordance with the corresponding Social Security regime.

   The destination of contributions for contingencies that may occur to persons in such situations may be regulated by regulation.

3. Death of the participant or beneficiary, which may give rise to the right to widowhood, orphanhood benefits, or benefits in favor of other heirs or designated persons.

4. Severe dependency or great dependency of the participant regulated in the Law on the promotion of personal autonomy and care for people in situations of dependency.

   For the purposes of the provisions of the first Additional Provision of Royal Legislative Decree 1/2002, the contingencies that must be implemented under the conditions established therein will be those of retirement, disability, death and dependency provided for respectively in letters a), b), c) and d) above.

   The commitments assumed by companies with workers who terminate their employment relationship with the company and become legally unemployed as a result of a redundancy plan, which consist of the payment of benefits prior to retirement, may be subject to implementation, on a voluntary basis, in accordance with the regime provided for in the First Additional Provision of Royal Legislative Decree 1/2002, in which case they will be subject to the financial and tax regulations derived therefrom.

PENSION COMMITMENTS WITH WORKERS (DA) 1 Royal Legislative Decree 1/2002)

Pension commitments assumed by companies, including accrued benefits, must be implemented, from the moment their cost accrual begins, through insurance contracts, including company social security plans through the formalization of a pension plan or several of these instruments. Once implemented, the obligation and responsibility of companies for the aforementioned pension commitments will be limited exclusively to those assumed in said insurance contracts and pension plans.

For these purposes, pension commitments shall be understood as those arising from legal or contractual obligations of the employer with the company's personnel, and linked to the contingencies established in article 8.6(art. 8.6 Royal Legislative Decree 1/2002) Royal Legislative Decree 1/2002. Such pensions may take the forms established in article 8.5 of the same consolidated text, and shall include any benefit intended to cover such commitments, whatever their name.

Not only natural persons and legal entities are considered companies, but also joint property associations and other entities that, even if they lack legal personality, are capable of assuming the commitments described with their employees.

In order for insurance contracts to serve the purpose referred to in the first paragraph, they must satisfy the following requirements:

• Take the form of collective life insurance or a company social security plan, in which the insured status will correspond to the worker and the beneficiary status will correspond to the persons in whose favor the pensions are generated according to the assumed commitments.

• The provisions of Articles 97 and 99 of the Insurance Contract Law shall not apply to such contracts.

• The policyholder's rights of surrender and reduction may only be exercised in order to maintain adequate coverage of the policy's pension commitments in force at any given time or for the exclusive purposes of integrating the commitments covered by said policy into another insurance contract, into a company social security plan or into a pension plan. In this last case, the new insurer or the pension plan will assume the full coverage of the aforementioned pension commitments.

• The investments corresponding to each policy must be individualized in accordance with the terms established by regulation.

• The amount of the redemption right may not be less than the realizable value of the assets representing the investment of the corresponding technical provisions. If there is a deficit in the coverage of said provisions, such deficit will not be reflected in the right of redemption, except in cases determined by regulation. The amount of the redemption must be paid directly to the new insurer or to the pension fund in which the new pension plan is integrated.

  It will be admissible that the payment of the redemption value be made through the transfer of the assets, net of the expenses required to carry out the corresponding changes of ownership.

In insurance contracts whose premiums have been charged to the subjects to whom the pension commitments are linked, the economic rights of the subjects must be provided for, in accordance with the conditions agreed in the commitment, in cases where the employment relationship ceases prior to the occurrence of the contingencies provided for in this regulation or the pension commitment linked to said subjects is modified.

The conditions to be met by insurance contracts referred to in this provision, including those drawn up between social security mutual societies and their members in their capacity as policyholders or insured parties, shall be established by regulation. In any case, the conditions established by regulation must be actuarially and financially consistent with the regulations applicable to pension commitments formalized through pension plans.

The effectiveness of pension commitments and the collection of accrued benefits will be subject to their formalization in the instruments referred to in the first paragraph. In any case, failure by the company to comply with the obligation to implement the pension commitments assumed will constitute a very serious labour infringement, in accordance with the terms provided for in Royal Legislative Decree 5/2000, of 4 August, on Infringements and Sanctions of the Social Order.

In no case will it be admissible to cover such commitments by means of the entrepreneur providing internal funds, or similar instruments, which imply that the entrepreneur maintains ownership of the resources established.

PROVISION OF CONSOLIDATED ERDS OF PENSION PLANS (art. 8.8 Legislative Royal Decree 1/2002)

Participants may only exercise their vested rights in cases of long-term unemployment or serious illness. As of January 1, 2015, contributions made at least ten years ago will also be available. With respect to vested rights existing as of December 31, 2015, disposal is permitted from January 1, 2025. Likewise, between May 15, 2013 and May 15, 2017, advance disposition is also allowed in the case of execution proceedings on the habitual residence.

The rights consolidated in the pension plans of the associated and individual system may be transferred to another pension plan or plans by unilateral decision of the participant or by loss of the status of associate of the promoter in a pension plan of the associated system or by termination of the plan.

The economic rights of beneficiaries in the pension plans of the individual and associated system may also be transferred to other pension plans at the request of the beneficiary, provided that the conditions of guarantee and assurance of the benefit allow it and under the conditions provided for in the specifications of the corresponding pension plans. This mobilization will not modify the method and conditions for receiving benefits.

However, the vested rights of participants in the pension plans of the employment system may not be transferred to other pension plans, except in the event of termination of the employment relationship and under the conditions established by regulation, and only if provided for in the specifications of the plan, or due to termination of the pension plan. The economic rights of beneficiaries in employment plans may not be mobilized, except upon termination of the pension plan.

The consolidated rights of the participant in a pension plan may not be subject to seizure, judicial or administrative impediment, until the time when the right to the benefit is caused or when they are made effective in the event of serious illness, long-term unemployment or early disposition due to the passage of 10 or more years of the rights.