Society

Differences between contributory and non-contributory pensions

As many know, there are two types of pensions, contributory pensions and non-contributory pensions. Both are benefits that social security recognizes to citizens who, after meeting certain requirements, are approved. Some of the general requirements to apply for the granting of a pension are age, certain impediments or the inability to work and in many cases a certain amount of contributions that the worker makes to the social security system during his work activity.

Therefore, in this article we will point out the definitions of both contributory pensions and non-contributory pensions, and then present the differences that exist between them.

contributory pension

A contributory pension is that pension that is granted to the person who has made economic contributions to the social security system, that is, has contributed to said system. The purpose of the contributory pension is to financially cover the person after retirement or when a condition occurs that makes it impossible for them to work, even when they have not reached the age required to qualify for a pension.

To be a beneficiary of a contributory pension, a citizen must compulsorily have made contributions or contributions to the social security system, which is a pension system that guarantees assistance to all its associates. The contributory pension that is granted most frequently is the retirement pension. Therefore, when the worker passes this stage having completed a certain number of years as an active worker, when he has reached a certain age or when he has reached a certain number of contributions, he has access to social assistance through his pension.

Despite the above, there are other contributory pensions that are frequently granted, such as the pension for disability, death or maternity and paternity. In these cases, the pension is granted to the person without having reached the required age or without having the total contributions necessary to access it.

Non-contributory pension

The non-contributory pension is one that is granted to a person without the need to have made economic contributions to the social security system but who manifests and demonstrates a real and proven need for the pension. For example, in Spain the non-contributory pension is granted to those who are unemployed and do not have the necessary resources to survive.

Non-contributory pensions can be disability and/or retirement pensions and are granted to the person when they have fulfilled certain requirements, which are evaluated in detail to determine whether or not the pension is approved. In some countries, access to the non-contributory retirement pension is obtained automatically upon reaching a certain age and in cases of people with special needs or some impediment, it is granted immediately once the case has been analyzed.

Taking into account the above, it can be seen that the main difference between a contributory pension and a non-contributory pension is:

  • The contributory pension is granted to the person who has made contributions to the social security system in the form of contributions during a period of work activity, while the non-contributory pension is granted to a person who has not made contributions (contributions) to the social security system. Social.

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