In a significant policy shift, María Jesús Montero, the Minister of Finance, announced on March 27, 2025, that retirees who overpaid the IRPF (Income Tax) while contributing to mutual societies will now be able to claim their refunds in a single payment. This decision marks a departure from previous regulations that required beneficiaries to request their refunds over four years, from 2025 to 2028.
Montero’s announcement came during a press conference where she presented the budget execution data for 2024. "After listening to the collectives, unions, and political groups, I can announce that we are going to promote a regulatory change to expedite these refunds as much as possible," she stated. This move is expected to benefit over four million retirees who have long awaited the return of excess IRPF payments made during their working years.
The Tax Agency will be able to process these requests efficiently, having already paid out some refunds in 2024. Montero confirmed that retirees who apply will receive their refunds in one go. "The Tax Agency is in a position to handle these requests, and we will return the funds in a single payment," she added.
This decision comes after a tumultuous period of uncertainty for retirees. Just months prior, in December 2024, the Tax Agency had halted the single-payment option, requiring beneficiaries to claim their refunds year by year. This change was met with widespread criticism, with unions such as CCOO and UGT labeling the previous system as arbitrary and discriminatory.
In 2023, a landmark ruling by the Supreme Court determined that contributors affiliated with old mutual societies had overpaid their IRPF and were entitled to compensation. This ruling arose from a historical context where, upon the establishment of the Social Security system in the 1970s, mutual members were not granted the same tax deductions as regular contributors, leading to significant overpayments.
As a result of the Supreme Court's decision, the Tax Agency had initially offered a form for mutual members to request refunds for the last four years in a single payment. However, the sudden reversal in December 2024 left many retirees feeling frustrated and uncertain about their financial futures.
Montero emphasized that the government is now committed to ensuring that these refunds are processed swiftly. "This is a victory for the mutualists, and we are determined to rectify the situation," she said. The total amount to be refunded is estimated at around 6,000 million euros, with approximately 1,400 million already disbursed.
The new procedure will allow retirees to request their refunds for the 2019 tax year, with subsequent years being processed in a streamlined manner. The deadline to apply for the 2019 refund will be between April 2 and June 30, 2025, coinciding with the tax return filing period.
While the announcement has been met with applause from labor unions, there are still concerns about the implementation of the new refund system. Many retirees are anxious about the bureaucratic processes involved and whether they will receive their refunds in a timely manner.
In addition to the changes regarding IRPF refunds, Montero also addressed the ongoing negotiations surrounding the interprofessional minimum wage (SMI). She confirmed that discussions had broken down, with her counterpart in the Ministry of Labor, Yolanda Díaz, stating that Montero had walked away from negotiations without reaching an agreement.
The proposed changes would have allowed SMI recipients to be exempt from paying IRPF, but the government's veto on three legislative proposals from various political parties has left many questioning the future of tax policies affecting low-income workers.
As the government prepares to implement these changes, the focus remains on ensuring that retirees receive the refunds they are owed without further delays. Montero’s commitment to address the concerns of retirees and unions reflects a growing acknowledgment of the historical injustices faced by mutual members.
Overall, the decision to allow a single payment for IRPF refunds represents a significant step forward for retirees, offering them a much-needed reprieve after years of advocacy and legal battles. As the April tax season approaches, many are hopeful that the Tax Agency will be ready to handle the influx of requests and provide the financial relief that so many have been waiting for.
