The Supreme Court established that not all the money withdrawn counts as income. Only the gains can affect the subsidy for those over 52 years old.
Withdrawing a pension plan while receiving the subsidy for those over 52 generates uncertainty among many beneficiaries. The key lies in which part of the withdrawn money actually constitutes a gain. The Supreme Court already ruled in 2016: not all the capital recovered should be considered income for subsidy purposes.
The State Public Employment Service (SEPE) is the body that reviews each case. If the beneficiary exceeds the income limit of 75% of the Minimum Interprofessional Wage (SMI), they could lose the aid. However, the withdrawal itself does not automatically imply suspension.
Which part of the withdrawal counts as income?
The ruling 65/2016 from the Supreme Court clarified that withdrawing from a pension plan does not generate new wealth, but rather transforms prior savings. Therefore, only the gains or interest obtained during the investment are considered income. The capital contributed by the holder does not count towards the income limit.
To know how much corresponds to each concept, the managing entity of the plan must issue a certificate with the breakdown. That document is essential for the SEPE to assess whether the right to the subsidy is maintained.
“What matters is not how much money is withdrawn, but which part of that amount actually constitutes a gain,” explain sources from the SEPE.
The beneficiary is obliged to inform the SEPE about the operation and provide documentation. Failing to do so may lead to reviews and possible claims.
Practical example: withdrawing 15,000 euros annually
Let’s imagine a 58-year-old person with 45,000 euros accumulated in a pension plan who wants to withdraw 15,000 euros a year for three years. This approach does not automatically mean losing the subsidy. It will depend on the generated profitability.
If only a small part of those 15,000 euros corresponds to profits, and the rest is contributed capital, it is possible that the subsidy is maintained, as long as there are no other incomes that exceed the limit of 75% of the SMI (excluding extra payments).
Each withdrawal is unique, as profitability varies according to the plan's evolution. Therefore, before deciding, it is advisable to request from the manager the breakdown between capital and returns.
Tax consequences and recommendations
The SEPE's criteria for the income limit does not coincide with the tax treatment of the withdrawal. For IRPF purposes, the amounts received are taxed as employment income, so the payment may impact the income tax return.
To avoid surprises, experts recommend: requesting a certificate with the breakdown from the managing entity, informing the SEPE about the operation, and assessing the tax impact. Additionally, it is advisable not to withdraw amounts that, when added to other incomes, exceed the limit of 75% of the SMI.
“The withdrawal must be communicated to the SEPE, which will be responsible for checking whether the operation affects the right to continue receiving the subsidy,” warn officials from the agency.
In summary, withdrawing a pension plan while receiving the subsidy for those over 52 is possible, but requires planning. The essential thing is to know which part of the money is profit and how it affects the income limit. With the appropriate documentation, many beneficiaries can access their savings without losing the aid.
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