Reimbursement of benefits recognized due to alleged errors by the Administration or its collaborating entities: Can they demand repayment years later?
Introduction
Recently, there has been a significant increase in proceedings initiated by Social Security or its managing entities, seeking reimbursement of previously recognized benefits.
These claims are often based on ex officio reviews that conclude that the original grant was improper.
This practice generates significant legal and social debate, especially when several years have passed since the beneficiary received the benefit and has acted in good faith, legitimately trusting in the validity of the aid received.
Fundamental questions arise:
Can the Administration revoke a benefit granted years ago?
What legal principles should protect citizens in these cases?
Is there case law limiting Social Security's ability to enforce these refunds?
In this article we analyze the applicable legal framework, the most recent judicial resolutions and the doctrine of European Court of Human Rights (ECHR) about this issue.
Can Social Security revoke a benefit years later?
The case of the benefit for cessation of activity with maintenance of self-employment activity
One of the most recent and representative examples of this problem is the claim for the return of a cessation of activity benefit compatible with maintaining self-employment activity, granted in 2021 and revoked in 2024 after an official review.
past more than three and a half years since the granting of the benefit, the collaborating entity of Social Security proceeded to review the file and determined that the beneficiary did not meet the required economic requirements, claiming the full refund of the amounts paid.
This case raises key questions:
- Can the Administration reclaim a benefit legitimately granted years ago?
- Is it fair for the beneficiary to assume the burden of a administrative error?
- What legal principles should be applied to determine the legality of these returns?
Below, we analyze the legal basis of these ex officio reviews and their compatibility with the fundamental principles of administrative law.
Legal certainty and legitimate expectations: key principles in the review of benefits
What do the Constitution and the Law say about these ex officio reviews?
The principle of legal certainty, included in the Article 9.3 of the Spanish Constitution, guarantees the protection of citizens against regulatory or administrative decisions that generate insecurity or unexpectedly affect their consolidated rights.
Additionally, the principle of legitimate trust —consolidated in the field of European Union law— protects the reasonable expectation that administrative acts, when they have produced favorable effects and have not been reviewed within a reasonable period, will be maintained over time and will not be modified to the detriment of the citizen.
Both principles have been collected in:
- Law 40/2015, on the Legal Regime of the Public Sector, which limits the possibility of reviewing administrative acts favorable to citizens.
- Law 39/2015, on Common Administrative Procedure, which establishes that the review of administrative acts can only be carried out within reasonable deadlines and with a clear justification.
How do these principles apply to the case under analysis?
When a collaborating entity of Social Security it takes more than three years in reviewing a benefit and subsequently demanding its return, the principles of legal certainty and legitimate trust are violated.
The beneficiary received the benefit based on the legality of the administrative act and the presumption that the grant was correct.
The benefit for cessation of activity with maintenance of self-employment activity: social assistance with a clear purpose
Nature and purpose of the service
The self-employment-compatible cessation of activity benefit is an exceptional measure designed to provide support to self-employed workers who experienced a substantial drop in income, without this implying the complete cessation of their professional activity.
This type of aid arises especially in contexts of economic or health crises, as occurred with the COVID-19 pandemic. COVID-19, which left thousands of self-employed workers in a situation of financial instability.
This benefit has the following main objectives:
- Guaranteeing economic protection for the self-employed in periods of difficulty, allowing them to continue operating and maintaining their activity.
- Avoid the closure of viable businesses, since without financial support, many self-employed workers would be forced to permanently cease their activity.
- Facilitate the progressive recovery of self-employed income, ensuring that you have enough time to stabilize your business.
- Sustain employment and business activity, avoiding a decline in the country's productive and economic fabric.
It is, therefore, a measure with a distinctly social purpose, aimed at preventing the economic suffocation of small business owners and self-employed workers by providing them with financial support that allows them to meet their basic expenses during difficult times.
Main requirements and features
This benefit is not granted automatically, but requires compliance with certain requirements. economic and administrative requirements.
The main criteria for granting it include:
- Demonstrate a drastic reduction in turnover compared to the same period of the previous year.
- Maintain self-employment, since the objective is to allow business continuity and not its complete closure.
- Be up to date with Social Security payments, since failure to comply with prior obligations could prevent access to the benefit.
- Quote for cessation of activity, which means that only self-employed workers who have made the corresponding contributions can benefit from this aid.
The amount to be received varies depending on the contribution base and is generally composed of: Two parts:
- A direct economic benefit, which provides a monthly income to cover basic needs.
- Compensation of Social Security contributions, allowing the self-employed person to remain registered without assuming the full cost of the fees.
Is it fair to demand repayment of aid years after it was granted? The impact of repayment requirements
Claiming the return of a benefit more than three years after it was granted imposes an excessive and unjustified burden on the beneficiary.
In this specific case, the aid did not exceed 7.000 Euros, of which approximately one 68% corresponded to direct financial support and the 32% remaining to offset Social Security contributions.
Considering their purpose and amount, it is reasonable to understand that these funds were used to cover basic needs or to support the operation of the business.
Requesting its reinstatement in 2024 not only distorts the social purpose for which the benefit was conceived, but also transforms a support measure into a source of economic insecurity for the self-employed.
Relevant case law: the European Court of Human Rights and the Supreme Court
Cakarevic v. Croatia (ECHR, 2018): a key precedent
The European Court of Human Rights (ECHR) set an important precedent in its judgment in Cakarevic v. Croatia of 26 April 2018, stating that:
- The Administration's error should not harm the citizen.
- If the beneficiary has acted in good faith, the repayment of benefits granted erroneously cannot be demanded.
- The delay in reviewing a concession is attributable to the Administration, not the citizen.
- The imposition of disproportionate economic burdens should be avoided.
This doctrine is fully relevant in the present case, given that the administrative review and the claim for reimbursement occurred three and a half years after the benefit was granted, causing clearly disproportionate harm to the beneficiary.
Supreme Court Jurisprudence
El Supreme Court has ratified this doctrine in various recent rulings:
Judgment 1186/2024, of October 15
- He declared the inadmissibility of the refund of a subsidy granted erroneously, given that the error was exclusively attributable to the Administration.
- He highlighted the good faith of the beneficiary and the delay in detecting the alleged error.
Judgment 4269/2023, of May 8, 2024
- He stressed that Administrative errors must be assumed by the responsible entity and not by the citizen.
- He indicated that the The beneficiary's financial capacity and the impact of the refund should be determining factors..
Conclusion: the inadmissibility of the refund in this case
The requirement for the return of benefits recognized in error by the Administration raises serious doubts about its compatibility with the principles of legal certainty, legitimate trust and good governance.
The case analyzed presents all the elements to consider the refund inappropriate:
- The benefit was legitimately granted and used for its social purpose.
- There was no fraud or falsehood on the part of the beneficiary.
- It took the government's collaborating entity more than three years to detect its alleged error.
- The economic burden imposed is disproportionate.
- And there was no other private interest in conflict
Both the doctrine of the European Court of Human Rights as the jurisprudence of the Supreme Court They consolidate the principle that errors attributable to the Administration must be assumed by it, without passing on the consequences to citizens who have acted in good faith.
Consequently, the fair solution in cases like this should not be the requirement to return the amounts received, but rather the assumption of responsibility by the public entity and the implementation of mechanisms to prevent future undue concessions.
This case clearly illustrates how administrative law must act as a safeguard against arbitrary or disproportionate decisions, requiring the Administration to act diligently and respectfully with the essential principles of the legal system.
