Spain activates flexible retirement reform allowing pensioners to work self-employed with 25% pension

New framework for partial employment

Spain's revised regulatory framework for flexible retirement officially entered into force on Friday, 28 August 2026. The legislation originated in a Royal Decree approved by the Council of Ministers in May 2026 and published in the Official State Gazette, forming part of the pension reform package agreed in 2024 between the government, trade unions, and business organisations. The updated rules modify the parameters for retirees who wish to return to the labour market on a part-time basis while retaining a portion of their state pension. Under the new decree, the permissible working day for salaried returnees spans between 33% and 80% of full-time hours, widening the previous legal bracket of 25% to 75%. Monthly pension disbursements adjust in proportion to the hours worked, while workers who resume employment at least six months after retiring receive supplementary pension increases of 15% for schedules between 33% and 55%, or 25% for schedules between 55% and 80%.

Self-employed inclusion and eligibility rules

For the first time, the flexible retirement system incorporates independent business owners and self-employed professionals into its scope. Pensioners who choose to resume activity under a self-employed status are permitted to combine their occupational revenue with 25% of their contributory pension. However, access is subject to a specific restriction requiring that applicants were not registered in the Special Scheme for Self-Employed Workers (RETA) during the three years immediately prior to their retirement date. The reform also removes the mandatory waiting moratorium for salaried retirees, enabling individuals to apply for flexible retirement immediately after their contributory pension is formally recognized.

Industry opposition to the three-year barrier

The inclusion criteria prompted formal opposition from the Union of Professionals and Self-Employed Workers (UPTA). The association criticized the three-year prior non-registration condition, arguing that it prevents career self-employed workers from transitioning directly from their own businesses into flexible retirement, while allowing former salaried employees to establish independent ventures. UPTA president Eduardo Abad called on the Ministry of Inclusion, Social Security and Migration to eliminate the three-year waiting rule.

Social Security once again designs a reform thinking fundamentally about wage employment and forces the self-employed to adapt to a model that does not respond to their reality. We cannot accept that after decades of contributing to the system we continue to be treated as second-class workers.

Long-term pension calculations and protections

The regulatory overhaul aims to incentivize longer careers as demographic shifts from the retirement of the baby boom generation increase pressure on the social security system. The policy responds to broader interest in delayed retirement, aligning with findings from a Funcas study in September 2025 indicating that nearly 30% of retirees would consider returning to work to expand their incomes. Under the new decree, additional social security contributions generated during periods of flexible retirement will not increase final pension calculations once full retirement resumes. An explicit exception applies to individuals who entered retirement through forced early exits, such as collective redundancies (ERE), who retain the right to recalculate and increase their baseline pension. Throughout the period of flexible employment, participants maintain their legal status as pensioners for healthcare coverage and social protection entitlements.