The regional government of Andalucia has introduced a greater increase in the level of non-contributory pension benefits for 1999 than the figure agreed for the rest of Spain. Central government has threatened to refer the matter to the Constitutional Court unless the increase is cancelled.
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The regional government of Andalucia has introduced a greater increase in the level of non-contributory pension benefits for 1999 than the figure agreed for the rest of Spain. Central government has threatened to refer the matter to the Constitutional Court unless the increase is cancelled.
On 29 December 1998, the regional government of Andalucia decided to increase the level of non-contributory pension benefits by 3.6% and welfare pension benefits by 5.5% for 1999, whereas central government had increased the rate by only 1.8% - equivalent to the year-on-year rate of inflation.
Non-contributory pensions (pensiones no contributivas) are granted to people who, for various reasons, have not contributed from their own income, or who have not done so for sufficient time. They are therefore are paid out exclusively or mainly from revenue from the public budget. The pensions are extraordinarily low - at most, ESP 38,000 a month - but are received by many claimants in Andalucia.
Central government has opposed the increases and threatened to refer the matter to the Constitutional Court, arguing that it contravenes the Toledo agreement - an agreement between political parties, trade unions and employers' organisations which governed the most recent reform of the social security system (ES9710220F). This agreement states that the level of pensions benefit is the exclusive responsibility of the central state. The government adds that Andalucia is thus breaking the unity of the system. The Junta (regional government) of Andalucia has replied that this argument may be valid for contributory pensions, which are paid from the contributions of employers and workers, but not for non-contributory pensions. The Junta is also surprised that the central government is scandalised by this small increase whilst it has done nothing about some spectacular pay rises for certain groups of public employee (such as teachers and others) in several other autonomous communities.
The debate has now gone beyond pensions. The trade unions and the Andalucian employers' associations have welcomed the Junta's measure, stating that there are issues contained in the Toledo agreement that must be reconsidered. The Socialist Party (PSOE) in Andalucia has stated that it seems incredible that central government is demanding this saving so soon after reducing taxes for the richest people (a reference to the latest tax reform - ES9812290F) and giving ESP 1.3 billion to the electricity utility companies (a measure that did not meet with approval in the EU institutions).
It has been argued that the main reason for the dispute is that the central government does not trust the regional governments to develop their own social policies, which may have important consequences in electoral terms.
Eurofound recommends citing this publication in the following way.
Eurofound (1999), Confrontation over non-contributory pensions in Andalucia, article.
