Shadows over the Social Security fund

Handing over executive power over benefits breaks the unity of the system.

"After 46 years, the door to the financial management of Social Security has finally been opened," proclaimed the Lehendakari, Imanol Pradales , after securing the transfer of management of non-contributory benefits to the Social Security family. And even though the planned governance of unemployment benefits, which was ultimately not agreed upon in the latest transfer package, fell by the wayside.

However, the fact that the Basque government is responsible for managing the benefits paid by the agency responsible for paying pensions in Spain is enshrined in the Gernika Statute approved in 1979, which the executive is using as a shield, does not prevent what could constitute a breach of the constitutional principles of unity that should underpin the Social Security system. First, because the proposed concessions could lead to territorial inequality between regions. This is warned by the Labor and Social Security Inspectorate. When its members were consulted privately, they warned that the damage could be irreparable. And second, because it remains to be seen whether the ultimately implemented scheme violates constitutional regulations.

It should be noted that the planned transfer assigns the Basque Country the management of benefits but not the collection capacity of the contributions that financially support them, something that will remain in the hands of the General Treasury. For example, with non-contributory Social Security family benefits—in the first phase of the planned transfers—which will now be administered by the Basque government's public service.

This management concession does open the door, for example, for the regional government to implement improvements to the service, such as supplements, which would open up an initial gap in inequality compared to the rest of the regions.

From this perspective, it is worth remembering that, according to the Constitution and the subsequent clarifications made by the Constitutional Court, the exclusive powers of the State include all regulatory powers, but also the executive powers necessary to guarantee the principles of unified funds and financial solidarity, as well as the equality of all citizens in rights and obligations regarding Social Security.

Therefore, a redistribution of powers in which the State retained only the regulations, ceding executive powers to the autonomous communities, would constitute, both materially and formally, a breach of the principle of unity. According to the Inspectorate, the single fund would be affected if the State were limited to regulating the deferral of pension debts or retirement pensions, and then ceding their processing and granting to the autonomous communities.

This executive power would therefore affect the single fund with respect to its income, any decision regarding the payment of contributions, and its expenses, including the management, recognition, and payment of a benefit, since it generates a financial obligation that must be borne by the State and interferes with the unitary economic regime of Social Security. The recognition and payment of Social Security benefits are fully integrated into the economic regime of Social Security, as they represent an expense and obligation borne by the single fund.

Evidently, the ultimate goal of Social Security transfers would also be to surrender tax collection capacity, which would ultimately undermine the minimal means of ensuring equality in access to and collection of benefits. However, this opens the door to deformities between the systems of the different regions, starting with the Basque Country. Furthermore, when the time comes, it would imply a substantial enclave of inefficiency, in addition to the possibility that the most prosperous regions could function as a magnet for attraction through the scaffolding of social benefits, exacerbating economic inequality between territories. This would be born from this completely differentiated system, distinguished from the various management formulas depending on the autonomous communities.