The CJEU's blow to the bonus paid to one million retirees with children will create a new hole in Social Security accounts.

The blow that the Court of Justice of the European Union (CJEU) has just dealt to the so-called "gender gap reduction supplement" received by almost one million pensioners threatens to open a new hole in the Social Security accounts at a very delicate time due to the pressure that the massive retirement of the baby boom generation is already exerting on spending.

Mariano Rajoy 's government created this bonus in 2016 to compensate women who had children for the impact on their contributions. The European Court of Justice deemed it discriminatory, and in 2021, Pedro Sánchez 's administration, with the current governor of the Bank of Spain, José Luis Escrivá , at the helm of Social Security, modified it to benefit both parents, but imposing stricter requirements on fathers.

The High Court has now confirmed that the supplement is discriminatory because mothers are automatically granted it upon retirement, while fathers must prove that they had to put their professional careers on hold for children born before 1995 or, after that date, that their contributions were reduced by at least 15% compared to previous years.

The Ministry of Inclusion, Social Security, and Migration has already put its legal services to work analyzing the ruling in depth. "It is very technical and complex," says the department currently headed by Elma Saiz . However, they state that "the Government's commitment to reducing the gender pension gap has been, is, and will continue to be unwavering."

Thus, the Ministry sends "a message of reassurance" to the 977,000 pensioners currently receiving the supplement (almost 90% of whom are women). "Childcare will continue to entitle women to the gender gap supplement, and it should continue to benefit working mothers primarily when they access their pensions," assure Social Security sources, who insist that "pensioners who were receiving it will continue to do so."

Although the government maintains that studies and statistics corroborate that raising children negatively affects women's careers more than men's, directly impacting a gap in wages and pensions, the CJEU ruling requires adapting the national law to European legislation. And although this does not necessarily open the door to compensation, as legal sources rule out its retroactive effects on pension claims, it will inevitably lead to an increase in pension spending.

This is the warning from technical sources familiar with the impact of this type of ruling on public finances: "Anything that generalizes rights increases spending." Now it's up to the experts at the National Social Security Institute (INSS) to calculate the impact, based on the scope of the expected new legislative amendment that the government will have to approve to comply with the CJEU's mandate.

The General Union of Workers (UGT) warns that the ruling released Thursday "poses serious risks." Among them, the union highlights, specifically, "an increase in public spending on pensions , by extending the receipt of the supplement universally and without corrective criteria." Furthermore, it warns of the " denaturalization of the gender gap supplement , by eliminating the positive action approach aimed at offsetting the effects of structural discrimination suffered by women in the labor market and in social protection."

"If the CJEU's ruling is upheld without nuance, not only would the financial balance of the system be jeopardized , but the very purpose for which this supplement was created: reducing the gender pension gap, would be void of meaning," insists the UGT. The union has requested an urgent meeting with Minister Saiz to assess the impact of this ruling and agree on a joint response. For now, the Ministry is refraining from disclosing whether it will open a negotiation process to agree on a solution with employers and unions.