Spain’s Audit Office conducted the study by cross-checking pension payments on the social security system with deaths registered at the National Institute of Statistics (INE) dating way back to 1989. The report reveals that these pensions to the dead people add up to more than $27 million every month. Although, the original study was done in December 2014, as many as 95 percent of these people continued to receive pension October 2015 when a followup study was conducted.
The report suggested a number of recommendations for the improvement in the system.
Insufficient information was given to the Social Security Office when a person died and that it failed to use effective controls over who it pays pensions to, and neither do the banks through which pensions are paid.
A spokesman for the National Social Security Institute, which is in charge of pension payments refuted the Audit Office’s claim.
We checked each name of a retiree in receipt of a pension with the INE’s register of deaths, and discovered that the only link between the two was the deceased’s identity card number, but not the name. It seems highly likely that there have been errors in entering identification numbers, or that they have been duplicated.
The Spanish government expects the public pension system to register a record deficit equivalent to 1.1% of GDP by the end of this year. Last week, it borrowed $10 billion from its reserve fund to cover the annual summer bonus payment. There are fears that Spain’s Social Security fund will go bust in 2018 unless the Government infuses more cash to the fund.
