spainish sip card

More info needed:

Are you a state pensioner

Did you sign on the foreigners register(previously know as residency)

"My question is why are we not issued with permanant card and entitled to full medical care."

Good question, and the only answer I can think of is that Spain is breaking the law and getting away with it. You may need to go to your local INSS office to ask the question, or maybe get a gestor on the case for you, but this kind of story is becoming more and more common unfortunately.

I agree with Mary Roberto on this,  Don't ask us ask INSS or even the DWP overseas office Newcastle.

I think the problem lies with Spain, not the UK (DWP).

To quote from the info on the S1 from the European Commission (Coordination of Social
Security Systems): "When you (and/or your family members) reside in a different country to the one you are insured in, you (and/or your family members) are entitled to all the benefits in kind (e.g. healthcare, medical treatment, hospitalisation) provided for under the legislation of your country of residence as if you were insured there. The institution in the country of residence is reimbursed by the institution with which you are insured."

In other words, once registered with the S1, Spain has to treat you as she treats her own. That's EU law. But then, there's almost certainly some law about parking on zebra crossings as well....

Good luck.

I agree with Mary Roberto on this 

(private joke!)