What happens after 18 months of sick leave in Spain

Updated on 27 September 2026. This version adds the 90-day deadline for examining your situation and the 730-day cap if the assessment is postponed, the Supreme Court judgment of November 2025 on the final settlement at 545 days, and Ley 2/2025, under which permanent incapacity no longer ends the employment contract automatically. The maximum length of sick leave has not changed in 2026.

When you reach the limit of 18 months of temporary incapacity (strictly speaking, 545 calendar days), you are not automatically signed fit for work and you do not stop being paid. On that day the sick-leave benefit ends by law, but you move into the extension of the financial effects of temporary incapacity (prolongación de efectos económicos de la incapacidad temporal): you keep receiving the same amount while the Instituto Nacional de la Seguridad Social (INSS, the National Social Security Institute) decides whether you have a permanent incapacity.

How you get to 545 days

Temporary incapacity (incapacidad temporal, IT) lasts a maximum of 365 days, which can be extended by another 180 days when it is expected that you may be discharged as recovered during that time (art. 169.1.a of the Ley General de la Seguridad Social (General Social Security Act), LGSS). That is where the 545 days come from. Relapses count towards the total, meaning new sick leave for the same or a similar condition within 180 calendar days of the previous discharge (art. 169.2 LGSS).

From day 365 onwards, only the INSS medical inspectorate can sign you fit for work; if it does not, the extension applies without any further step (art. 170.2 LGSS). If it signs you fit during that period and you disagree, you have 4 calendar days to lodge your disagreement with the medical inspectorate of your public health service (in Madrid, that of the Comunidad de Madrid), under art. 170.3 LGSS.

What happens when you reach 545 days

Once the limit is reached, the INSS must examine your condition within a maximum of 90 calendar days to assess, where appropriate, a permanent incapacity (art. 174.2 LGSS). The case is opened by the INSS itself: you do not need to apply. The Equipo de Valoración de Incapacidades (EVI, the incapacity assessment team) issues a proposed opinion, and you are then given a hearing to put forward your arguments (art. 5 of Real Decreto 1300/1995). This is the time to provide up-to-date medical reports. The general deadline for deciding these cases is 135 days; if it passes without a decision, the rules treat the case as refused by administrative silence and you can file a prior administrative claim (reclamación previa) under art. 6.1 of the same royal decree and art. 71.2 of the Ley reguladora de la jurisdicción social (Social Jurisdiction Act, LRJS).

In the meantime, the extension of financial effects continues until you are notified of the decision (art. 174.5 LGSS).

The three possible outcomes

1. Permanent incapacity is recognised (partial, total, absolute or severe incapacity (gran incapacidad)). If the benefit is higher than what you were receiving, it is backdated to the day after your sick leave ended; if not, it starts on the date of the decision (art. 174.5 LGSS).
2. It is refused. The extension ends when you are notified and you must go back to your job. You do not have to repay what you received until then (art. 6.3 of Real Decreto 1300/1995).
3. The INSS postpones the assessment. If you are still receiving treatment and a recovery allowing you to return to work is expected, it may put off its decision, but never beyond 730 calendar days counting sick leave and extension together (art. 174.2 LGSS). This is what is sometimes called an "exceptional extension": it is not new sick leave and you keep being paid the same.

What you are paid and who pays you

You receive the same amount as during your sick leave: normally 75% of your regulatory base (base reguladora) (for a non-work-related illness or accident this percentage applies from day 21 of sick leave; for a work accident or occupational disease, from the day after sick leave begins).

What changes is who pays it into your account. Until now your employer advanced the benefit through your payslip and deducted it from its social security contributions (pago delegado, delegated payment); that collaboration ends on day 545 at the latest (art. 170.2 LGSS). From then on, you are paid directly by the INSS or the mutual insurer (mutua) covering your case. The exception is employers that voluntarily collaborate in managing Social Security (art. 102.1.a LGSS): they keep paying you themselves, including during the extension (art. 170.2 LGSS). If the INSS letter asks you to apply for direct payment, do so as soon as possible, with the mutua or through the Social Security procedure "Prestación de pago directo por incapacidad temporal" (direct payment of the temporary incapacity benefit).

Three details you should not overlook:

• Collective agreement top-ups. If your collective agreement (convenio colectivo) improves the benefit (for example, up to 100% of your salary), check how long it lasts: many agreements limit it in time, and it may stop being paid once the sick leave is exhausted.
• Income tax (IRPF). The INSS or the mutua becomes an additional payer. If the amounts received from the second and subsequent payers exceed €1,500 in the year, the employment income threshold below which you do not have to file a return falls from €22,000 to €15,876 (art. 96 of the Ley del IRPF (Personal Income Tax Act)).
• Social security contributions. During the 90 days and any postponement there is no obligation to pay contributions (art. 174.2 LGSS). That is why your employer will usually register your baja (deregistration) with Social Security and you may receive a notice, which on its own is not a dismissal.

If you do not know which mutua covers you, ask your employer in writing: since 5 October 2026, if you do not already have that information, it must give it to you within 30 working days of your request, together with any voluntary improvements to Social Security benefits it provides (Real Decreto 723/2026, art. 3.2.p and sole transitional provision).

What happens to your contract

Your contract does not end because you reach 545 days: it remains suspended (art. 45.1.c of the Estatuto de los Trabajadores (Workers' Statute), ET). Your employer does not pay you a salary or contributions, but you keep your job.

The Supreme Court has confirmed this in its judgment STS 1157/2025 of 27 November (Social Chamber, appeal for the unification of case law 4669/2024): deregistering you from Social Security when the 545 days run out and handing you a final settlement (finiquito) is not, on its own, a tacit dismissal; there must be an unequivocal intention by the employer to end the relationship.

That does not mean you can ignore it. If your employer's letter makes it clear that it is ending the contract, treat it as a dismissal: you have 20 working days to challenge it, starting with a conciliation request (papeleta de conciliación); in Madrid this is filed with the SMAC, the regional mediation, arbitration and conciliation service (art. 59.3 ET and arts. 63 and 103 LRJS). If in doubt, ask your employer in writing to confirm that the contract remains suspended, but bear in mind that asking does not stop the clock. If the document refers to termination, to "end of contract" or to settling the employment relationship and your employer does not clarify it straight away, file the conciliation request within the 20 working days as a precaution, because that does stop the clock (art. 59.3 ET and art. 65.1 LRJS). And if the real reason for a dismissal is your illness, it may be discriminatory and therefore null and void under arts. 2.1 and 26 of Ley 15/2022 (Comprehensive Act on Equal Treatment and Non-Discrimination).

If permanent incapacity is recognised

If it is partial, you receive a lump-sum payment (art. 196.1 LGSS) and your contract does not end: you must go back to your job once you are notified of the decision, just as if it had been refused.

If it is total, absolute or severe incapacity, since 1 May 2025 (Ley 2/2025, the Act that amended the Workers' Statute and the LGSS on termination for permanent incapacity) it no longer ends the contract automatically (art. 49.1.n ET):

• You have 10 calendar days from notification of the decision to tell your employer in writing that you want to continue. The law does not say what happens if you do not, but the cautious reading is that, without that notice, your employer is not required to look for an adaptation and may terminate the contract, so do not let the deadline pass.
• Your employer has 3 months to adapt your job or move you to another suitable one. It may only terminate the contract, in writing and with reasons, if the adaptation is an excessive burden, if there is no suitable vacant post or if you turn down the proposed change. In the meantime, the contract remains suspended and your job is kept for you (art. 48.2 ET).
• If the decision provides for a review for improvement that would allow you to return, your job is kept for 2 years from the decision (art. 48.2 ET). We explain this in the review of permanent incapacity at 24 months.
• If you work in an adapted or different job that is incompatible with the pension, the pension is suspended while you do so (art. 174.5 LGSS).

If it is refused

You must return to work as soon as you are notified of the decision. If you do not, your employer may treat it as unjustified absences and dismiss you (art. 54.2.a ET). You can appeal at the same time: a prior administrative claim to the INSS within 30 days of notification and, if it is rejected or 45 days pass without an answer, a court claim within a further 30 days (art. 71 LRJS). Appealing does not exempt you from going back.

Nor can you chain another period of sick leave for the same condition: once the 545 days are exhausted, a new right to IT for the same or a similar condition only arises if more than 180 calendar days have passed since the decision, and for a non-work-related illness only contributions made after it count; as an exception, the INSS may agree to new sick leave once if it believes you can recover (art. 174.3 LGSS). This limit does not apply to sick leave for a different illness.

Settlement documents and the finiquito: what to check

It is common for the employer to send, at 545 days, a document listing outstanding amounts (holiday pay, extra salary payments or other items). Before you sign:

• Check whether it refers to suspension or to termination or "end of contract". They are not the same.
• Holidays cannot be exchanged for money while the contract is still in force (art. 38.1 ET). If your sick leave prevented you from taking them, you can take them when you return, provided no more than 18 months have passed since the end of the year in which they accrued (art. 38.3 ET).
• If you sign, you can do so as "received, not in agreement" (recibí, no conforme) and keep a copy.

In summary

• At 545 days there is no automatic discharge and you do not stop being paid.
• The INSS must examine your case within 90 days and, if it postpones the assessment, sick leave and extension together cannot exceed 730 days; you keep being paid until you are notified of the decision.
• Normally the INSS or the mutua pays you directly, and nobody pays contributions during this stage.
• Your contract remains suspended, and a final settlement is not, on its own, a dismissal; but if it refers to termination, the 20-working-day deadline to challenge it keeps running even if you ask for clarification.

If you are close to 545 days, have received a final settlement or an INSS decision and are not sure which deadline is running, we can review it with you: book a consultation. If you are also thinking about claiming unemployment benefit, you may want to read whether you can receive an incapacity pension and unemployment benefit at the same time.

Legislation and sources

• General Social Security Act (consolidated text), arts. 169 to 174 and 196
• Workers' Statute (consolidated text), arts. 38, 45, 48, 49, 54 and 59
• Ley 2/2025 of 29 April on termination of the contract due to permanent incapacity
• Real Decreto 1300/1995 on work incapacity (consolidated text)
• Social Jurisdiction Act (consolidated text), arts. 63, 65, 71 and 103
• Real Decreto 723/2026, art. 3 and sole transitional provision
• Personal Income Tax Act (Ley 35/2006, consolidated text), art. 96
• Ley 15/2022, Comprehensive Act on Equal Treatment and Non-Discrimination (consolidated text)
• STS 1157/2025 of 27 November (ECLI:ES:TS:2025:5425), on CENDOJ
• Social Security: recognition and payment of temporary incapacity benefit
• Social Security: direct payment of temporary incapacity benefit