Andorra 2026 Budgets: Key Takeaways on Interest Rates and CASS Updates
The Consell General has recently approved Law 1/2026, of January 22, regarding the budget for the 2026 financial year. Beyond the major macroeconomic figures, this law introduces annual updates that directly affect the daily lives of businesses, freelancers, and families in Andorra.
In this article, we will break down two of the most frequently consulted aspects of the new budgets: how the official interest rates are set and what the updates are in the Andorran Social Security Fund (CASS), paying special attention to pensions and healthcare coverage.
1. Financial Operations: Interest Rates for 2026
The third chapter of the budget law establishes the official interest rates that will govern financial and tax operations throughout the year 2026.
- Legal interest rate (3.24%): The legal interest rate for the 2026 financial year is set at 3.24%. A very important detail for government suppliers is that, if the Government fails to pay within the legally established deadlines, it is obliged to automatically incorporate the corresponding legal default interest into the payment.
- Default interest rate (4.05%): The default interest rate for the 2026 financial year is established at 4.05%. This is the percentage provided for in Article 23 of the Law on the basis of the tax system, and it is applied to debts with the public administration.
2. Social Security (CASS) Updates
The budget law also updates the provisions of the Social Security Law, introducing highly relevant social protection measures.
A. Progressive Pension Revaluation
For the year 2026, the revaluation of economic benefits paid by CASS is not linear, but is applied progressively based on the variation of the Consumer Price Index (CPI). The objective is to provide greater protection for lower incomes. The increase is calculated based on the brackets comparing the pension amount against the Minimum Interprofessional Wage (SMI) established for 2026:
- Pensions below 1 SMI: Increased by double the CPI.
- Pensions between 1 SMI and 2 SMI: Increased according to the CPI.
- Pensions between 2 SMI and 3 SMI: Increased by 25% of the CPI.
- Pensions above 3 SMI: Have a 0% CPI increase (not revalued by default).
Equity correction mechanism: To avoid unfair imbalances, the law provides for additional revaluations for those whose pension as of December 31, 2025, was just above the border of the brackets (for example, just above 1 SMI, 2 SMI, or 3 SMI). This ensures that the applied increase does not leave them at a disadvantage compared to those who earned slightly less than them.
B. Extension of Healthcare Coverage Upon Death
One of the most prominent modifications with the greatest social impact is the reform of the termination of CASS reimbursement benefits.
- Extension to 4 months: Coverage for “indirect insured” persons is extended for up to four months in the event of the death of the direct insured person who provided them with coverage.
- Maintenance of rights: Indirect insured persons maintain the right to receive reimbursement benefits provided they maintain the general conditions to be beneficiaries. The exact period is calculated based on the contribution time accredited by the deceased prior to death.
- Objective of the measure: The law itself details that this measure seeks to ensure that family members “are not suddenly left unprotected”. In this way, they enjoy a reasonable period to process the pensions they are entitled to (such as widowhood or orphanhood) or to seek alternative solutions.
