Government approves rise in minimum wage and pensions

Moncloa Palace, Madrid

The Council of Ministers approved a Royal Decree establishing the rise in public pensions under the Social Security system, the rise in pensions for civil servants and other public social benefits for 2017. All these pensions and financial benefits will rise by 0.25%.

The Social Security system estimates that this increase will affect 9,476,780 contributory pensions, 455,229 non-contributory pensions and 191,240 family benefits.

The President of the Government, Mariano Rajoy, declared at the press briefing following the Council of Ministers, after taking stock of the government's management in 2016 and outlining its challenges for the coming years, that Friday's decision "has allowed for the necessary steps to raise pensions by 0.25% as established by the General Social Security Act.

Unavailability of budgetary funds

The government approved an agreement whereby the distribution by ministerial department of the State Budget extended into 2017 is formalised, and established the unavailability of credit for a sum of 5.49 billion euros and adopted measures to control spending during 2017.

The way the election process unfolded and the situation of a caretaker government meant that it had not been possible to draft the General State Budget for 2017, and hence, as from 1 January 2017, the Budget for 2016 will automatically be extended.

Mariano Rajoy pointed out that in the context of the automatic extension to the Budget, "it has been necessary to approve an agreement so that the level of State spending is in line with the ceiling approved for 2017, and consequently, meet our deficit commitments for 2017 within the framework established for the Eurozone".

Minimum wage

The Council of Ministers approved a Royal Decree setting the amount of the minimum wage (Spanish acronym: SMI) for 2017 at 707.70 euros per month, an 8% increase. This has been set at 23.59 euros per day and 9,907.80 euros per year.

The minimum wage for seasonal and temporary workers is set at 33.51 euros per day for those who provide services for one company for not more than 120 days per annum.

The President of the Government highlighted that "this increase, agreed with the Socialist Group, is the highest in 30 years and is possible thanks to the general state of the Spanish economy".

Other agreements

• Approval of the Refugee Resettlement Programme in Spain 2016, for its implementation in 2017.
• Allocation of 20 million euros to boost training and youth employment in the Digital Economy.
• Extension of the contract with Renfe for the provision in 2017 of the following services: suburban trains, Avant, metric gauge and medium distance.
• Authorisation for the signing of 57 partnership agreements between Central Government and the regional governments.
• Agreements for emergency recruitment to the Directorate General of the Police and the Guardia Civil.