Social Security Programs

Throughout the World:

The Americas, 2003

Social Security Administration

Office of Policy

Office of Research, Evaluation, and Statistics

This publication is substantially based on information collected and summarized by the International Social Security Association.

Preface

This issue completes the first four-volume series of Social Security Programs Throughout the

World. In this new format, each volume focuses on a specific region of the world: Europe, Asia

and the Pacific, Africa, and the Americas. The volumes are published at 6-month intervals over a

2-year period. The next issue (Europe), which will begin the second series, will appear in

September 2004.

The information contained in these volumes is crucial to our efforts, and those of researchers

in other countries, to review different ways of approaching social security challenges that will

enable us to adapt our social security systems to the evolving needs of individuals, households,

and families. These efforts are particularly important as each nation faces major demographic

changes, especially the increasing number of aged persons, as well as economic and fiscal issues.

Social Security Programs Throughout the World is the product of a cooperative effort

between the Social Security Administration (SSA) and the International Social Security

Association (ISSA). Founded in 1927, the ISSA is a nonprofit organization bringing together

institutions and administrative bodies from countries throughout the world. The ISSA deals with

all forms of compulsory social protection that by legislation or national practice are an integral

part of the countries social security systems.

Previous editions of this report, which date back to 1937, were issued as one volume and were

prepared by SSA staff. With the introduction of the four-volume format, however, the research and

writing has been contracted out to the ISSA. The ISSA has conducted the research largely

through its numerous country-based correspondents, as well as its Social Security Worldwide

Database and a myriad of other types of data that must be drawn together to update this report.

Members of the ISSA’s Information System and Databases Unit analyzed the information and

revised the publication to reflect detailed changes to each social security program. Social

Security Programs Throughout the World is based on information available to the ISSA and SSA

with regard to legislation in effect in July 2003, or the last date for which information has been

received.

Questions about the report should be sent to Barbara Kritzer at ssptw@ssa.gov. Corrections,

updated information, and copies of relevant documentation and legislation are also welcome and

may be sent to:

International Social Security Association

Information System and Databases Unit

Case postale 1

4 route des Morillons

CH-1211 Geneva 22

Switzerland

This report is available at http://www.socialsecurity.gov/policy. For additional copies, please

telephone 202-358-6274 or e-mail op.publications@ssa.gov.

SSA staff members were responsible for technical and editorial assistance and production.

Barbara Kritzer served as technical consultant and provided overall project management.

Emil Loomis designed the report and produced it for publication. Sherry Snyder edited the report,

with assistance from Celine Houget. Laurie Brown prepared the Web versions of this publication.

Edward J. DeMarco

Associate Commissioner

for Research, Evaluation, and Statistics

March 2004

Contents

Guide to Reading the Country Summaries

Sources of Information .................................................................................. 1

Types of Programs

Employment-Related .................................................................................................... 2

Universal ..................................................................................................................... 2

Means-Tested .............................................................................................................. 3

Other Types of Programs ............................................................................................. 3

Format of Country Summaries

Old Age, Disability, and Survivors .............................................................................. 3

Sickness and Maternity ............................................................................................... 7

Work Injury.................................................................................................................. 10

Unemployment ............................................................................................................ 12

Family Allowances....................................................................................................... 14

Tables

1. Types of social security programs.......................................................................... 16

2. Types of mandatory systems for retirement income ............................................... 18

3. Demographic and other statistics related to social security, 2003 .......................... 20

4. Contribution rates for social security programs, 2003 ............................................ 22

Antigua and Barbuda .................... 27

Argentina ....................................... 29

Bahamas......................................... 34

Barbados........................................ 37

Belize .............................................. 41

Bermuda ......................................... 44

Bolivia ............................................ 47

Brazil .............................................. 50

British Virgin Islands ..................... 54

Canada ........................................... 56

Chile ............................................... 61

Colombia ........................................ 67

Costa Rica ...................................... 71

Cuba ............................................... 75

Dominica ........................................ 78

Dominican Republic ....................... 81

Ecuador .......................................... 85

El Salvador ..................................... 89

Grenada .......................................... 92

Guatemala ...................................... 95

Guyana ........................................... 98

Haiti................................................ 101

Honduras ....................................... 103

Jamaica ........................................... 106

Mexico ........................................... 108

Nicaragua....................................... 112

Panama ........................................... 115

Paraguay ........................................ 118

Peru ................................................ 121

Saint Kitts and Nevis ..................... 125

Saint Lucia ..................................... 128

Saint Vincent and the Grenadines .. 130

Trinidad and Tobago ..................... 132

United States ................................. 135

Uruguay ......................................... 141

Venezuela ....................................... 145

Country Summaries

Guide to Reading

the Country Summaries

This issue on the Americas marks the completion of the

first four-volume series Social Security Programs

Throughout the World. The combined findings of this

and previous reports on Europe, Asia and the Pacific, and

Africa highlight the principal features of social security

programs throughout the world. The next series begins

with the volume on Europe, which will be published

September 2004.

This guide serves as an overview of programs in all

regions. A few political jurisdictions have been excluded

because they have no social security system or have

issued no information regarding their social security

legislation. In this volume on the Americas, the data

reported are based on laws and regulations in force in July

2003 or on the last date for which information has been

received.1 Information for each country on types of social

security programs, types of mandatory systems for

retirement income, contribution rates, and demographic

and other statistics related to social security is shown in

Tables 1–4 beginning on page 16.

The country summaries show each system’s major

features. Separate programs in the public sector and

specialized funds for such groups as agricultural workers,

collective farmers, or the self-employed have not been

described in any detail. Benefit arrangements of private

employers or individuals are not described in any detail,

even though such arrangements may be mandatory in

some countries or available as alternatives to statutory

programs.

The country summaries also do not refer to international

social security agreements that may be in force between

two or more countries. Those agreements may modify

coverage, contributions, and benefit provisions of national

laws summarized in the country write-ups. Since the

summary format requires brevity, technical terms have

been developed that are concise as well as comparable

and are applied to all programs. The terminology may

therefore differ from national concepts or usage.

Sources of Information

Most of the information in this report was collated from

the Social Security Programs Throughout the World

survey conducted by the International Social Security

Association (ISSA) under the sponsorship of the U.S.

Social Security Administration (SSA). This information

was supplemented by data collected from the ISSA’s

Developments and Trends Annual Survey. Empirical

data were also provided by numerous social security

officials throughout the world. (For a listing of countries

and jurisdictions, see page 2.) Important sources of

published information include the ISSA Documentation

Center; the legislative database of the International

Labour Office; and official publications, periodicals, and

selected documents received from social security

institutions. Information was also received from the

Organization for Economic Cooperation and

Development, the World Bank, and the International

Monetary Fund. During the compilation process,

international analysts at both SSA and the ISSA

examined the material for factual errors, ambiguous

statements, and contradictions in material from different

sources.

Types of Programs

The term social security in this report refers to

programs established by statute that insure individuals

against interruption or loss of earning power and for

certain special expenditures arising from marriage, birth,

or death. This definition also includes allowances to

families for the support of children.

Protection of the insured person and dependents

usually is extended through cash payments to replace at

least a portion of the income lost as the result of old

age, disability, or death; sickness and maternity; work

injury; unemployment; or through services, primarily

hospitalization, medical care, and rehabilitation. Measures providing cash benefits to replace lost income are

usually referred to as income maintenance programs;

measures that finance or provide direct services are

referred to as benefits in kind.

Three broad approaches to coverage provide cash

benefits under income-maintenance programs; namely,

employment-related, universal, and means-tested

systems. Under both the employment-related and the

universal approaches, the insured, dependents, and

survivors can claim benefits as a matter of right. Under

means-tested approaches, benefits are based on a

comparison of a person’s income or resources against a

standard measure. Some countries also provide other

types of coverage.

1 The names of the countries in this report are those used

by the U.S. Department of State. The term country has been

used throughout the volume even though in some instances

the term jurisdiction may be more appropriate.
2 ♦ SSPTW: The Americas, 2003

Employment-Related

Employment-related systems, commonly referred to as

social insurance systems, generally base eligibility for

pensions and other periodic payments on length of

employment or self-employment or, in the case of family

allowances and work injuries, on the existence of the

employment relationship itself. The amount of pensions

(long-term payments, primarily) and of other periodic

(short-term) payments in the event of unemployment,

sickness, maternity, or work injury is usually related to the

level of earnings before any of these contingencies

caused earnings to cease. Such programs are financed

entirely or largely from contributions (usually a

percentage of earnings) made by employers, workers, or

both and are in most instances compulsory for defined

categories of workers and their employers.

The creation of notional defined contributions (NDC)

is a relatively new method of calculating benefits. NDC

schemes are a variant of contributory social insurance

that seek to tie benefit entitlements more closely to

contributions. A hypothetical account is created for each

insured person that is made up of all contributions during

his or her working life and, in some cases, credit for

unpaid activity such as caregiving. A pension is calculated by dividing that amount by the average life expectancy at the time of retirement and indexing it to various

economic factors. When benefits are due, the

individual’s notional account balance is converted into a

periodic pension payment.

Some social insurance systems permit voluntary

affiliation of workers, especially the self-employed. In

some instances, the government subsidizes such programs to encourage voluntary participation.

The government is, pro forma, the ultimate guarantor

of many benefits. In many countries, the national government participates in the financing of employmentrelated as well as other social security programs. The

government may contribute through an appropriation from

general revenues based on a percentage of total wages

paid to insured workers, finance part or all of the cost of

a program, or pay a subsidy to make up any deficit of an

insurance fund. In some cases, the government pays the

contributions for low-paid workers. These arrangements

are separate from obligations the government may have

as an employer under systems that cover government

employees. Social security contributions and other

earmarked income are kept in a dedicated fund and are

shown as a separate item in government accounts. (For

further details on the government’s role in financing

social security, see Source of Funds under Old Age,

Disability, and Survivors.)

Universal

Universal programs provide flat-rate cash benefits to

residents or citizens, without consideration of income,

employment, or means. Typically financed from general

revenues, these benefits may apply to all persons with

sufficient residency. Universal programs may include

Countries in the Americas that Responded to the

Social Security Programs Throughout the World Survey

Antigua and Barbuda

Argentina

Bahamas

Barbados

Belize

Bermuda

Brazil

British Virgin Islands

Canada

Chile

Costa Rica

Dominica

Dominican Republic

Ecuador

El Salvador

Grenada

Guatemala

Guyana

Honduras

Jamaica

Mexico

Nicaragua

Panama

Peru

Saint Kitts and Nevis

Saint Lucia

Saint Vincent and the Grenadines

United States

Uruguay

Venezuela
SSPTW: The Americas, 2003 ♦ 3

old-age pensions for persons over a certain age; pensions

for disabled workers, widow(er)s, and orphans; and

family allowances. Most social security systems

incorporating a universal program also have a second-tier

earnings-related program. Some universal programs,

although receiving substantial support from income taxes,

are also financed in part by contributions from workers

and employers.

Means-Tested

Means-tested programs establish eligibility for benefits by

measuring individual or family resources against a

calculated standard usually based on subsistence needs.

Benefits are limited to applicants who satisfy a means

test. The size and type of benefits awarded are

determined in each case by administrative decision within

the framework of the law.

The specific character of means, needs, or income

tests, as well as the weight given to family resources,

differ considerably from country to country. Such

programs, commonly referred to as social pensions or

equalization payments, traditionally are financed primarily

from general revenues.

Means-tested systems constitute the sole or principal

form of social security in only a few jurisdictions. In

other jurisdictions, contributory programs operate in

tandem with income-related benefits. In such instances,

means- or income-tested programs may be administered

by social insurance agencies. Means-tested programs

apply to persons who are not in covered employment or

whose benefits under employment-related programs,

together with other individual or family resources, are

inadequate to meet subsistence or special needs. Although means-tested programs can be administered at the

national level, they are usually administered locally.

In this report, when national means-tested programs

supplement an employment-related benefit, the existence

of a means-tested program is generally noted, but no

details concerning it are given. When a means-tested

program represents the only or principal form of social

security, however, further details are provided.

Other Types of Programs

Three other types of programs are mandatory private

insurance, publicly operated provident funds, and

employer-liability systems.

Mandatory Private Insurance. This type of coverage

may have been introduced to substitute for, or to complement, social insurance systems that are mainly pay-asyou-go (PAYG). Private insurance is funded either

through mandatory employee contributions or a combination of mandatory employee and employer contributions.

Contributions are assigned to an employee’s individual

account. The employee must pay administrative fees for

the management of the private account and usually

purchase a separate policy for disability and survivors

insurance.

Provident Funds. These funds, which exist primarily in

developing countries, are essentially compulsory savings

programs in which regular contributions withheld from

employees’ wages are enhanced, and often matched, by

employers’ contributions. The contributions are set aside

and invested for each employee in a single, publicly

managed fund for later repayment to the worker when

defined contingencies occur. Typically, benefits are paid

out in the form of a lump sum with accrued interest,

although in certain circumstances drawdown provisions

enable partial access to savings prior to retirement or

other defined contingencies. On retirement, some

provident funds also permit beneficiaries to purchase an

annuity or opt for a pension. Some provident funds

provide pensions for survivors.

Employer-Liability Systems. Under these systems,

workers are usually protected through labor codes that

require employers, when liable, to provide specified

payments or services directly to their employees. Specified payments or services can include the payment of

lump-sum gratuities to the aged or disabled; the provision

of medical care, paid sick leave, or both; the payment of

maternity benefits or family allowances; the provision of

temporary or long-term cash benefits and medical care in

the case of a work injury; or the payment of severance

indemnities in the case of dismissal. Employer-liability

systems do not involve any direct pooling of risk, since

the liability for payment is placed directly on each employer. Employers may insure themselves against liability,

and in some jurisdictions such insurance is compulsory.

Format of Country Summaries

Each country summary discusses five types of programs:

• Old age, disability, and survivors;

• Sickness and maternity;

• Work injury;

• Unemployment; and

• Family allowances.

Old Age, Disability, and Survivors

Benefits under old age, disability, and survivor programs

usually cover long-term risks, as distinct from short-term

risks such as temporary incapacity resulting from

sickness and maternity, work injury or unemployment.

The benefits are normally pensions payable for life or for

a considerable number of years. Such benefits are
4 ♦ SSPTW: The Americas, 2003

usually provided as part of a single system with common

financing and administration as well as interrelated

qualifying conditions and benefit formulas.

The laws summarized under Old Age, Disability, and

Survivors focus first on benefits providing pensions or

lump-sum payments to compensate for loss of income

resulting from old age or permanent retirement. Such

benefits are usually payable after attaining a specified

statutory age. Some countries require complete or

substantial retirement in order to become eligible for a

pension; other countries pay a retirement pension at a

certain age regardless of whether workers retire or not.

The second type of long-term risk for which pensions

are provided is disability (referred to in some countries as

invalidity). Disability may be generally defined as longterm and more or less total work impairment resulting

from a nonoccupational injury or disease. (Disability

caused by a work injury or occupational disease is usually

compensated under a separate program; see Work Injury,

below.)

The third type of pension is payable to dependents of

insured workers or pensioners who die. (Pensions for

survivors of workers injured while working are usually

provided under a separate Work Injury program.)

Coverage. The extent of social security coverage in any

given country is determined by a number of diverse

factors, including the kind of system, sometimes the age

of the system, and the degree of economic development.

A program may provide coverage for the entire country

or some portion of the workforce.

In principle, universal systems cover the entire population for the contingencies of old age, disability, and

survivorship. A person may have to meet certain conditions, such as long-term residence or citizenship. Many

countries exclude aliens from benefits unless there is a

reciprocal agreement with the country of which they are

nationals.

The extent of employment-related benefits is usually

determined by the age of the system. Historically, social

security coverage was provided first to government

employees and members of the armed forces, then to

workers in industry and commerce, and eventually

extended to the vast majority of wage earners and

salaried employees through a general system. As a

result, public employees (including military personnel and

civil servants), teachers, and employees of public utilities,

corporations, or monopolies are still covered by occupation-specific separate systems in many countries.

In many countries, special occupational systems have

been set up for certain private-sector employees, such as

miners, railway workers, and seamen. Qualifying

conditions and benefits are often more liberal than under

the general system. The risk involved in an occupation,

its strategic importance for economic growth, and the

economic and political strength of trade unions may have

had a role in shaping the type and size of benefits offered

by the particular program.

Groups that might be considered difficult to administer—family workers, domestics, day workers, agricultural

workers, and the self-employed—were often initially

excluded from coverage. The trend has been to extend

coverage to these groups under separate funds or to

bring them gradually under the general system. In some

countries, noncovered workers become eligible for the

right to an eventual pension if they make voluntary

contributions at a specified level. Some systems also

provide voluntary coverage for women who leave the

labor force temporarily to have children or to raise a

family, or for self-employed persons not covered by a

mandatory program. Some developed countries with

younger programs have constructed a unified national

program, thus largely bypassing the need for developing

separate industrial or agricultural funds.

Most developing countries have extended coverage

gradually. Their first step toward creating a social

security system has commonly been to cover wage and

salary workers against loss of income due to old age and,

less commonly, disability.

In a number of developing countries, particularly in

those that were once British colonies, this initial step has

come via the institutional form of provident funds. Most

provident funds provide coverage for wage and salary

workers in the government and private sector. A few

funds have exclusions based on the worker’s earnings or

the size of the firm. Funds that exclude employees with

earnings above a certain level from compulsory coverage

may in some cases give them the option to affiliate or

continue to participate voluntarily.

Source of Funds. The financing of benefits for old-age,

disability, and survivor programs can come from three

possible sources:

• A percentage of covered wages or salaries paid by

the worker,

• A percentage of covered payroll paid by the employer, and

• A government contribution.

Almost all pension programs under social insurance (as

distinct from provident funds or universal systems) are

financed at least in part by employer and employee

contributions. Many derive their funds from all three

sources. Contributions are determined by applying a

percentage to salaries or wages up to a certain maximum. In many cases the employer pays a larger share.

The government’s contribution may be derived from

general revenues or, less commonly, from special earmarked or excise taxes (for example, a tax on tobacco,
SSPTW: The Americas, 2003 ♦ 5

gasoline, or alcoholic beverages). Government contributions may be used in different ways to defray a portion of

all expenditures (such as the cost of administration), to

make up deficits, or even to finance the total cost of a

program. Subsidies may be provided as a lump sum or an

amount to make up the difference between employer/

employee contributions and the total cost of the system.

A number of countries reduce or, in some cases, eliminate

contributions for the lowest-paid wage earners, financing

their benefits entirely from general revenues or by the

employer’s contribution.

The contribution rate apportioned between the sources

of financing may be identical or progressive, increasing

with the size of the wage or changing according to wage

class. Where universal and earnings-related systems

exist side by side, and the universal benefit is not financed

entirely by the government, separate rates may exist for

each program. In other instances, flat-rate weekly

contributions may finance basic pension programs.

These amounts are uniform for all workers of the same

age and sex, regardless of earnings level. However, the

self-employed may have to contribute at a higher rate

than wage and salary workers, thereby making up for the

employer’s share.

For administrative purposes, a number of countries

assess a single overall social security contribution covering several contingencies. Benefits for sickness, work

injury, unemployment, and family allowances as well as

pensions may be financed from this single contribution.

General revenue financing is the sole source of income in

some universal systems. The contribution of the resident

or citizen may be a percentage of taxable income under

a national tax program. General revenues finance all or

part of the means-tested supplementary benefits in many

countries.

Contribution rates, as a rule, are applied to wages or

salaries only up to a statutory ceiling. A portion of the

wage of highly paid workers will escape taxation but will

also not count in determining the benefit. In a few cases,

an earnings ceiling applies for the determination of

benefits but not for contribution purposes. In some

countries, contribution rates are applied not to actual

earnings but to a fixed amount that is set for all earnings

falling within a specified range or wage class.

Qualifying Conditions. Qualifying to receive an old-age

benefit is usually conditional on two requirements:

attainment of a specified age and completion of a

specified period of contributions or covered employment.

Another common requirement is total or substantial

withdrawal from the labor force. In some instances,

eligibility is determined by resident status or citizenship.

Old-age benefits generally become payable between

ages 60 and 65. In some countries, length-of-service

benefits are payable at any age after a certain period of

employment, most commonly between 30 and 40 years.

Reflecting public pressure to lower the age limits, a major

policy issue in the 1970s and 1980s was the age at which

retirement benefits first become payable. More recently,

several countries have increased the age limit for entitlement, due, in part, to budgetary constraints.

Many programs require the same pensionable age for

women as for men. Others permit women to draw a full

pension at an earlier age, even though women generally

have a longer life expectancy. Although the norm has

been for the differential to be about 5 years, there is now

an emerging international trend toward equalizing the

statutory retirement age.

Many programs offer optional retirement before the

statutory retirement age is reached. A reduced pension,

in some instances, may be claimed up to 5 years before

the statutory retirement age. Some countries pay a full

pension before the regular retirement age if the applicant

meets one or more of the following conditions: work in

an especially arduous, unhealthy, or hazardous occupation

(for example, underground mining); involuntary unemployment for a period near retirement age; physical or

mental exhaustion (as distinct from disability) near

retirement age; or, occasionally, an especially long period

of coverage. Some programs award old-age pensions to

workers who are older than the statutory retirement age

but who cannot satisfy the regular length-of-coverage

requirement. Other programs provide increments to

workers who have continued in employment beyond the

normal retirement age.

Universal old-age pension systems usually do not

require a minimum period of covered employment or

contributions. However, most prescribe a minimum

period of prior residence.

Some old-age pension systems credit periods during

which persons, for reasons beyond their control, were not

in covered employment. Credits can be awarded for

reasons such as disability, involuntary unemployment,

military service, education, child rearing, or training.

Other systems disregard these periods and may proportionately reduce benefits for each year below the required minimum. Persons with only a few years of

coverage may receive a refund of contributions or a

settlement in which a proportion of the full benefit or

earnings is paid for each year of contribution.

The majority of old-age pensions financed through

social insurance systems require total or substantial

withdrawal from covered employment. Under a retirement test, the benefit may be withheld or reduced for

those who continue working, depending on the amount of

earnings or, less often, the number of hours worked.

Universal systems usually do not require retirement from
6 ♦ SSPTW: The Americas, 2003

work for receipt of a pension. Provident funds pay the

benefit only when the worker leaves covered employment or emigrates.

Some countries provide a number of exemptions that

act to eliminate the retirement condition for specified

categories of pensioners. For instance, the retirement

test may be eliminated for workers who reached a

specified age above the minimum pensionable age or for

pensioners with long working careers in covered employment. Occupations with manpower shortages may also

be exempted from the retirement test.

The principal requirements for receiving a disability

benefit are loss of productive capacity after completing a

minimum period of work or having met the minimum

contribution requirements. Many programs grant the full

disability benefit for a two-thirds loss of working capacity

in the worker’s customary occupation, but this requirement may vary from one-third to 100 percent.

The qualifying period for a disability benefit is usually

shorter than for an old-age benefit. Periods of 3 to 5

years of contributions or covered employment are most

common. A few countries provide disability benefits in

the form of an unlimited extension of ordinary cash

sickness benefits.

Entitlement to disability benefits may have age limitations. The lower limit in most systems is in the teens, but

it may be related to the lowest age for social insurance or

employment or to the maximum age for a family allowance benefit. The upper age limit is frequently the

statutory retirement age, when disability benefits may be

converted to old-age benefits.

For survivors to be eligible for benefits, most programs

require that the deceased worker was a pensioner,

completed a minimum period of covered employment, or

satisfied the minimum contribution conditions. The

qualifying contribution period is often the same as that for

the disability benefit. The surviving spouse and orphans

may also have to meet certain conditions, such as age

requirements.

Old-Age Benefits. The old-age benefit in most countries

is a wage-related, periodic payment. However, some

countries pay a universal fixed amount that bears no

relationship to any prior earnings; others supplement their

universal pension with an earnings-related pension.

Provident fund systems make a lump-sum payment,

usually a refund of employer and employee contributions

plus accrued interest. In programs that have mandatory

individual accounts, options for retirement include purchasing an annuity, making withdrawals from an account

regulated to guarantee income for an expected lifespan

(programmed withdrawals), or a combination of the two

(deferred annuity).

Benefits that are related to income are almost always

based on average earnings. Some countries compute the

average from gross earnings, including various fringe

benefits; other countries compute the average from net

earnings. Alternatively, some countries have opted to use

wage classes rather than actual earnings. The wage

classes may be based on occupations or, for administrative convenience, on earnings arranged by size using the

midpoint in each step to compute the benefit.

Several methods are used to compensate for averages

that may be reduced by low earnings early in a worker’s

career or by periods without any credited earnings due,

for example, to unemployment or military service, and for

the effects of price and wage increases due to inflation.

One method is to exclude from consideration a number of

periods with the lowest (including zero) earnings. In

many systems the period over which earnings are

averaged may be shortened to the last few years of

coverage, or the average may be based on years when

the worker had his or her highest earnings. Other

systems revalue past earnings by applying an index that

usually reflects changes in national average wages or the

cost of living. Some assign hypothetical wages before a

certain date. Alternatively, others have developed

mechanisms for automatic adjustment of workers’ wage

records based on wage or price changes.

A variety of formulas are used in determining the

benefit amount. Instead of a statutory minimum, some

systems pay a percentage of average earnings—for

instance, 35 percent or 50 percent—that is unchanged by

length of coverage once the qualifying period is met. A

more common practice is to provide a basic rate—for

example, 30 percent of average earnings—plus an

increment of 1 percent or 2 percent of earnings either for

each year of coverage or for each year in excess of a

minimum number of years. Several countries have a

weighted benefit formula that returns a larger percentage

of earnings to lower-paid workers than to higher-paid

workers.

Most systems limit the size of the benefit. Many do so

by establishing a ceiling on the earnings taken into

account in the computation. Others establish a maximum

cash amount or a maximum percentage of average

earnings set, for example, at 80 percent. Some systems

combine these and other, similar methods.

Most systems supplement the benefit for a wife or

child. The wife’s supplement may be 50 percent or more

of the basic benefit, although in some countries the

supplement is payable only for a wife who has reached a

specified age, has children in her care, or is disabled. It

may also be payable for a dependent husband.

Minimum benefits are intended to maintain a minimum

standard of living in many countries, although that objec-
SSPTW: The Americas, 2003 ♦ 7

tive is not always achieved. A maximum that reduces the

effect large families have on benefits is commonly used

to limit total benefits, including those of survivors, in the

interest of the financial stability of the program.

In some countries, benefits are automatically adjusted

to reflect price or wage changes. In other countries, the

process is semiautomatic—the adequacy of pensions is

reviewed periodically by an advisory board or other

administrative body that recommends a benefit adjustment to the government, usually requiring legislative

approval.

Disability Benefit. Under most programs, provisions for

disability benefits for persons who are permanently

disabled as the result of nonoccupational causes are very

similar to those for the aged. The same basic formula

usually applies for total disability as for old age—a cash

amount usually expressed as a percentage of average

earnings. Increments and dependents’ supplements are

generally identical under the total disability and old-age

programs. For the totally disabled, a constant-attendance

supplement, usually 50 percent of the benefit, may be

paid to those who need help on a daily basis. Partial

disability benefits, if payable, are usually reduced,

according to a fixed scale. The system may also provide

rehabilitation and training. Some countries provide higher

benefits for workers in arduous or dangerous

employment.

Survivor Benefit. Most systems provide periodic

benefits for survivors of covered persons or pensioners,

although some pay only lump-sum benefits. Survivor

benefits are generally a percentage of either the benefit

paid to the deceased at death or the benefit to which the

insured would have been entitled if he or she had attained

pensionable age or become disabled at that time.

Survivor benefits are paid to some categories of

widows under nearly all programs. The amount of a

widow’s benefit usually ranges from 50 percent to

75 percent of the deceased worker’s benefit or, in some

cases, 100 percent. In some countries, lifetime benefits

are payable to every widow whose husband fulfills the

necessary qualifying period. More commonly, the

provision of widows’ benefits is confined to widows who

are caring for young children, are above a specified age,

or are disabled.

Lifetime benefits are ordinarily payable to aged and

disabled widows. Those awarded to younger mothers,

however, are usually terminated when all children have

passed a certain age, unless the widow has reached a

specified age or is disabled. Most widows’ benefits also

terminate on remarriage, although a final lump-sum grant

may be payable under this circumstance. Special provisions govern the rights of the divorced. Age limits for

orphan’s benefits are in many cases the same as for

children’s allowances. Many countries fix a somewhat

higher age limit for orphans attending school or undergoing an apprenticeship or for those who are incapacitated.

The age limit is usually removed for disabled orphans as

long as their incapacity continues. Most survivor programs distinguish between half orphans (who have lost

one parent) and full orphans (who have lost both parents), with the latter receiving benefits that are

50 percent to 100 percent larger than those for half

orphans. Special payments are also made to orphans

under the family allowance programs of some countries.

Benefits are payable under a number of programs to

widowers of insured workers or pensioners. A widower

usually must have been financially dependent on his wife

and either disabled or old enough to receive an old-age

benefit at her death. A widower’s benefit is usually

computed in the same way as a widow’s benefit.

Many systems also pay benefits to other surviving

close relatives, such as parents and grandparents, but

only in the absence of qualifying widows, widowers, or

children. The maximum total benefit to be divided among

survivors is usually between 80 percent and 100 percent

of the benefit of the deceased.

Administrative Organization. Responsibility for

administration generally rests with semiautonomous

institutions or funds. These agencies are usually subject

to general supervision by a ministry or government

department but otherwise are largely self-governing,

headed by a tripartite board that includes representatives

of workers, employers, and the government. Some

boards are bipartite with representatives of workers and

employers only or of workers and the government.

Where coverage is organized separately for different

occupations, or for wage earners and salaried employees

or self-employed workers, each program usually has a

separate institution or fund. In a few cases, the

administration of benefits is placed directly in the hands

of a government ministry or department.

Sickness and Maternity

Sickness benefit programs are generally of two types:

cash sickness benefits, which are paid when short-term

illnesses prevent work, and health care benefits, which

are provided in the form of medical, hospital, and

pharmaceutical benefits. Some countries maintain a

separate program for cash maternity benefits, which are

paid to working mothers before and after childbirth. In

most countries, however, maternity benefits are

administered as part of the cash sickness program.

(Benefits provided as a result of work injury or

occupational disease are provided either under work

injury or sickness programs. Details of the benefits are

discussed under Work Injury.)
8 ♦ SSPTW: The Americas, 2003

Cash sickness and maternity benefits as well as health

care are usually administered under the same branch of

social security. For this reason, these programs are

grouped together in the country summaries.

An important reason for grouping these numerous

benefits together is that each deals with the risk of

temporary incapacity. Moreover, in most instances, such

benefits are furnished as part of a single system with

common financing and administration. Most countries

provide medical care services for sickness and maternity

as an integral part of the health insurance system and link

those services directly with the provision of cash benefits.

In some instances, however, maternity cash grants are

covered under family allowance programs. Occasionally,

medical care services are provided under a public health

program, independent of the social insurance system.

Where this dual approach is followed, it has been indicated in the summaries.

Where health care is dispensed directly by the government or its agencies and the principal source of funds is

general revenue, the cash benefit program usually

continues to be administered on an insurance basis,

funded by payroll contributions, and merged in some

instances with other aspects of the social insurance

system such as old age and disability. However, countries that deliver health care primarily through private

facilities and private funding are also likely to have

developed separate programs. Where the social security

program operates its own medical facilities, both types of

benefits are usually administered jointly.

Benefits designed to assist in the provision of longterm care, often at home, are generally supported by a

special tax. Benefit levels are normally set to the level of

care required. These benefits may be payable in cash, as

care services, or as a combination of the two.

Coverage. The proportion of the population covered by

sickness programs varies considerably from country to

country, in part because of the degree of economic

development. Coverage for medical care and cash

benefits is generally identical in countries where both

types of benefits are provided through the same branch

of social insurance. In a number of systems, particularly

in developing countries, health care insurance extends

only to employees in certain geographic areas. A

common procedure is to start the program in major urban

centers, then extend coverage gradually to other areas.

Both cash sickness and health care programs may

exclude agricultural workers, who, in some countries,

account for a major proportion of the working population.

Where a health insurance system (as distinguished from a

national health service program) exists, most workers

earning below a certain ceiling participate on a

compulsory basis. Others, such as the self-employed,

may be permitted to affiliate on a voluntary basis. In

several countries, higher-paid employees are specifically

excluded from one or both forms of sickness insurance,

although some voluntary participation is usually permitted.

Many countries include pensioners as well as other

social security beneficiaries under the medical care

programs, in some cases without cost to the pensioner.

Elsewhere, pensioners pay a percentage of their pension

or a fixed premium for all or part of the medical care

coverage. Special sickness insurance systems may be

maintained for certain workers, such as railway employees, seamen, and public employees.

Where medical care coverage is provided through a

national health service rather than social insurance, the

program is usually open in principle to virtually all residents. However, restrictions on services to aliens may

apply.

Source of Funds. Many countries have merged the

financing of sickness programs with that of other social

insurance benefits and collect only a single contribution

from employees and employers. More commonly,

however, a fixed percentage of wages, up to a ceiling, is

contributed by employees and employers directly to a

separate program that administers both health care and

cash benefits for sickness and maternity. Some countries

also provide a government contribution. Where medical

care is available to residents, generally through some type

of national health service, the government usually bears

at least the major part of the cost from general revenues.

Qualifying Conditions. Generally, a person becoming ill

must be gainfully employed, incapacitated for work, and

not receiving regular wages or sick-leave payments from

the employer to be eligible for cash sickness benefits.

Most programs require claimants to meet a minimum

period of contribution or to have some history of work

attachment prior to the onset of illness to qualify. Some

countries, however, have eliminated the qualifying period.

The length of the qualifying period for cash sickness

benefits may range from less than 1 month to 6 months or

more and is ordinarily somewhat longer for cash maternity benefits. Usually the period must be fairly recent,

such as during the last 6 or 12 months. In the case of

medical benefits, a qualifying period is usually not required. In instances where such a requirement does

exist, it is generally of a short duration. Most programs

providing medical services to dependents of workers, as

well as to the workers themselves, do not distinguish in

their qualifying conditions between the two types of

beneficiaries. A few programs require a longer period of

covered employment before medical services are provided to dependents.
SSPTW: The Americas, 2003 ♦ 9

Cash Benefits. The cash sickness benefit is usually

50 percent to 75 percent of current average earnings,

frequently with supplements for dependents. Most

programs, however, fix a maximum benefit amount or do

so implicitly through a general earnings ceiling for

contributions and benefits. Benefits may be reduced

when beneficiaries are hospitalized at the expense of the

social insurance system.

A waiting period of 2 to 7 days is imposed under most

cash sickness programs. As a result, benefits may not be

payable if an illness or injury lasts for only a few days.

Similarly, in the case of a prolonged inability to work,

benefits may not be payable for the first few days.

Under some programs, however, benefits are retroactively paid for the waiting period when the disability

continues beyond a specified time, commonly 2 to 3

weeks. A waiting period reduces administrative and

benefit costs by excluding many claims for short illnesses

or injuries during which relatively little income is lost and

can also help reduce the potential for the inappropriate

use of the system by workers.

The period during which a worker may receive

benefits for a single illness or injury, or in a given

12-month period, is ordinarily limited to 26 weeks. In

some instances, however, benefits may be drawn for

considerably longer and even for an unlimited duration.

A number of countries permit the agency to extend the

maximum entitlement period to 39 or 52 weeks in specific

cases. In most countries, when cash sickness benefits

are exhausted, the recipient is paid a disability benefit if

the incapacity continues.

Cash maternity benefits are usually payable for a

specified period, both before and after childbirth. A

woman is almost always required to stop working while

receiving maternity benefits, and usually she must use the

prenatal and postnatal medical services provided by the

system. In some countries, cash maternity benefits are

also payable to working men who stay home to care for a

newborn child while the mother returns to work. Cash

payments may also be available for a parent, usually the

mother, who is absent from work to care for a sick child

under a specified age.

The proportion of earnings payable as a cash maternity

benefit differs considerably from country to country but,

like cash sickness benefits, is usually between 50 percent

and 75 percent of current earnings. However, in a

number of countries, maternity benefits are set at

100 percent of wages. Benefit payments usually start

approximately 6 weeks before the expected date of

childbirth and end 6 to 8 weeks afterward.

A nursing allowance—usually 20 percent or 25 percent

of the regular maternity benefit and payable for up to

6 months or longer—may be provided in addition to the

basic cash maternity benefit. A grant for the purchase of

a layette—clothes and other essentials for the new-born

baby—or the provision of a layette itself is furnished

under some programs. Finally, a lump-sum maternity

grant may be paid on the birth of each child. The wives

of insured men may be eligible for this grant. Similar

benefits may be provided under the family allowance

program.

Medical Benefits. Medical services usually include at

least general practitioner care, some hospitalization, and

essential drugs. Services of specialists, surgery,

maternity care, some dental care, a wider range of

medicines, and certain appliances are commonly added.

Transportation of patients and home-nursing services may

be included.

There are three principal methods of meeting the cost

of health care: direct payment to providers by the public

system or its agents, reimbursement of patients, and

direct provision of medical care. These methods may be

used in different combinations and may be varied for

different kinds of services.

Under direct payment, the social security or public

medical care system pays providers directly for services.

Patients usually have little or no direct financial dealings

with the care provider. Payments for care are commonly

made on the basis of contracts with service providers or

the professional groups representing them, such as

practitioner or hospital associations. Remuneration may

take the form of a specified fee for each service, a

capitation payment in return for providing all necessary

services to a given group of persons, or a salary.

Under the reimbursement method, the patient makes

the initial payment and is reimbursed by social security

for at least part of the cost. A maximum is sometimes

placed on the refund, expressed as a percentage of the

bill or a flat amount that can vary with the nature of the

service as stipulated in a schedule of fees. The ceiling on

medical bills can be placed on the provider when presenting the bill or on the patient when applying for reimbursement. In the latter case, the patient may be reimbursed

for only a small portion of the bill.

Under the direct-provision method, the social security

system or the government owns and operates its own

medical facilities, largely manned by salaried staff.

Countries using this method may contract for services of

public or private providers. The patient normally pays no

fee for most of these services, except insofar as part of

the social security contribution may be allotted toward

health care funding.

Regardless of the funding method used, all national

health care programs provide for at least a small degree

of cost-sharing by patients, usually on the assumption that

such charges discourage overuse. Thus, the patient

either pays part of the cost to the provider or social
10 ♦ SSPTW: The Americas, 2003

security agency or receives less than full reimbursement.

Even under the direct-provision method, with its emphasis

on basically free medical services to the whole population, patients are generally required to pay a small fixed

fee per medical treatment or prescription or per day of

hospitalization.

Some health care systems have no limit on how long

medical care may be provided. Other systems fix a

maximum, such as 26 weeks, for services provided for

any given illness. Some set limits only on the duration of

hospitalization paid for by social security. Where time

limits are imposed, they may be extended.

Maternity Care. Prenatal, obstetric, and postnatal care

for working women is provided in most countries under

the medical services program. Obstetric care is

sometimes limited to the services of a midwife, although

a doctor is usually available in case of complications.

Care in a maternity home or hospital, as well as essential

drugs, are ordinarily furnished where necessary.

Medical Care for Dependents. When medical benefits

for insured workers are provided through social

insurance, similar services are typically furnished to their

spouse and young children (and, in some cases, other

adults or young relatives living with and dependent on the

insured). Maternity care is generally provided to the wife

of an insured man.

In some countries, however, medical services available

to dependents are more limited than those provided to

insured workers or heads of families. Dependents may

be subject to a shorter maximum duration for hospital

stays, for example, and may have to pay a larger percentage of the cost of certain services such as medicines.

Administrative Organization. The administrative

organization for the sickness and maternity program is

similar to that of the old-age, disability, and survivor

program in many countries. Most commonly, such

programs are administered by some form of national

social security institution. Under some systems, social

security agencies own and operate their own medical

facilities, furnishing at least part of the services available

under their programs.

In most countries with a national health insurance

program, responsibility for detailed administration lies

with semiautonomous, nongovernment health funds or

associations. All workers covered by the program must

join one of these funds.

Each health fund usually requires government approval

and must satisfy certain requirements. Workers and, in

some countries, employers participate in the election of

governing bodies. The funds normally collect contributions within minimum and maximum limits. Funds may

also receive government subsidies related to their expenditures or to the number of affiliated members.

National law usually prescribes the minimum (and, in

some cases, the maximum) cash benefits and medical

services the health funds may provide. In a few countries, individual funds may determine what specific health

care benefits and services to provide and arrange to

furnish medical care to their members. This arrangement

can involve delivery through contracts with care and

service providers in the region.

Less commonly, government departments are responsible for the actual provision of medical services, usually

through a national health service program. The administrative responsibility for delivering medical services in

some countries is often separated from the administration

of cash benefit programs, which tend to be linked with

other types of social security benefits.

Work Injury

The oldest type of social security—the work injury

program—provides compensation for work-connected

injuries and occupational illnesses. Such programs

usually furnish short- and long-term benefits, depending

on both the duration of the incapacity and the age of

survivors. Work injury benefits nearly always include

cash benefits and medical services. Most countries

attempt to maintain separate work injury programs that

are not linked directly with other social security

measures. In some countries, however, work injury

benefits are paid under special provisions of the general

social security programs. Both types of programs are

dealt with under Work Injury.

Types of Systems. There are two basic types of work

injury systems: social insurance systems that use a public

fund, and various forms of private or semiprivate

arrangements required by law. In most countries, work

injury programs operate through a central public fund,

which may or may not be part of the general social

insurance system. All employers subject to the program

must pay contributions to the public carrier, which in turn

pays the benefits.

Countries that rely primarily on private arrangements

require employers to insure their employees against the

risk of employment injury. However, in some of these

countries, only private insurance is available. In the

remainder, a public fund does exist, but employers are

allowed the option of insuring with either a private carrier

or the public fund.

The premiums charged by private or mutual insurance

companies for work injury protection usually vary according to the experience of work accidents in different

undertakings or industries, and the cost of protection may

vary widely. In some countries, however, experience

rating has been eliminated, and all employers contribute

to the program at one rate.
SSPTW: The Americas, 2003 ♦ 11

In other instances, workers’ compensation laws simply

impose on employers a liability to pay direct compensation to injured workers or their survivors. Employers

covered under such laws may simply pay benefits from

their own funds as injuries occur or may voluntarily

purchase a private or mutual insurance contract to

protect themselves against risk.

Coverage. Work injury programs commonly cover wage

and salary workers and exclude the self-employed. The

programs of some of the more highly industrialized

nations cover practically all employees. However, many

countries either exclude all agricultural employees or

cover only those who operate power-driven machinery.

Some programs also exclude employees of small

enterprises.

Source of Funds. Work injury benefits are financed

primarily by employer contributions, reflecting the

traditional assumption that employers should be liable

when their employees suffer work injuries. Where

certain elements of the work injury program are meshed

with one or more of the other branches of the social

insurance system, however, financing usually involves

contributions from employees, employers, and the

government. Another exception occurs in countries that

provide medical treatment for work-connected illnesses

under their ordinary public medical care programs.

Work Injury Benefits. Work injury programs provide

cash benefits and medical benefits. Cash benefits under

work injury programs may be subdivided into three types:

benefits for temporary disability, those for permanent

total disability, and those for permanent partial disability.

No qualifying period of coverage or employment is

ordinarily required for entitlement to work injury benefits.

The concept of work-connected injury has gradually been

liberalized in a number of countries to cover injuries

occurring while commuting to and from work.

Temporary disability benefits are usually payable from

the start of an incapacity caused by a work injury, though

some programs require a waiting period of 1 to 3 days.

Benefits normally continue for a limited period, such as

26 to 52 weeks, depending on the duration of incapacity.

If incapacity lasts longer, the temporary disability benefit

may be replaced by a permanent disability benefit. In

some systems, temporary benefits may continue for an

extended period, particularly if the temporary and permanent benefit amounts are identical.

The temporary benefit is nearly always a fraction of

the worker’s average earnings during a period immediately before injury, usually at least one-third to one-half.

A ceiling may be placed on the earnings considered in

computing a benefit. Temporary benefits under work

injury programs may be significantly higher than in the

case of ordinary sickness. Benefits are reduced under

some programs when a worker is hospitalized.

The second type of cash work injury benefit is provided in cases of permanent total disability. Generally, it

becomes payable immediately after the temporary

disability benefit ceases, based on a medical evaluation

that the worker’s incapacity is both permanent and total.

The permanent total disability benefit is usually payable

for life, unless the worker’s condition changes. A

minority of programs, however, pay only a single lumpsum grant equal to several years’ wages.

The permanent total disability benefit usually amounts

to two-thirds to three-fourths of the worker’s average

earnings before injury, somewhat higher than for ordinary

disability benefits. In addition, unlike ordinary disability

benefits, the rate usually does not vary based on the

length of employment before the injury. Supplements

may be added for dependents and for pensioners requiring the constant attendance of another person, in which

case benefits may exceed former earnings. In some

countries, the benefits of apprentices or new labor force

entrants who become permanently disabled as a result of

work-connected injury or disease are based on hypothetical lifetime wages or on the wage of an average worker

in the particular industry. This mechanism overcomes the

problem of establishing a lifetime benefit based on a very

low starting wage.

The third type of cash work injury benefit is provided

when permanent partial disability results in a worker’s

loss of partial working or earning capacity. It is usually

equal to a portion of the full benefit corresponding to the

percentage loss of capacity. Alternatively, permanent

partial disability benefits may be paid in the form of a

lump-sum grant. Partial disability payments are generally

smaller and are usually stipulated in a schedule of payments for particular types of injuries. Some systems pay

the benefit as a lump sum when the extent of disability is

below a stated percentage, such as 20 percent.

Medical and hospital care and rehabilitation services

are also provided to injured workers. Nearly always

free, they may include a somewhat wider range of

services than the general sickness program. Ordinarily,

they are available until the worker recovers or the

condition stabilizes. In some countries, however, free

care is limited, the amount being based on the duration of

services or their total cost.

Survivor Benefits. Most work injury programs also

provide benefits to survivors. These benefits are

customarily payable to a widow, regardless of her age,

until her death or remarriage; to a disabled widower; and

to orphans below specified age limits. If the benefit is

not exhausted by the immediate survivors’ claims,

dependent parents or other relatives may be eligible for
12 ♦ SSPTW: The Americas, 2003

small benefits. No minimum period of coverage is

required.

Survivor benefits are computed as a percentage of

either the worker’s average earnings immediately before

death or the benefit payable (or potentially payable) at

death. These percentages are typically larger than those

for survivor benefits under the general program and do

not normally vary with the length of covered employment.

They are usually about one-third to one-half of the

worker’s average earnings for a widow, about half as

much for each half orphan, and about two-thirds as much

for each full orphan. A limit is commonly placed on the

combined total of survivor benefits.

Not all countries, however, provide work injury benefits to survivors, and some do not differentiate between

survivors in this category and survivors entitled to benefits under other social insurance programs. Some

schemes pay only a lump sum equal to the worker’s

earnings over a specified number of years. Most systems also pay a funeral grant equivalent to a fixed sum or

a percentage of the worker’s earnings.

Administrative Organization. The functions involved in

administering work injury programs differ widely between

countries in which employers are not required to insure or

can insure with private carriers and those in which a

public agency or fund has sole responsibility for both

collecting contributions and paying benefits.

Unemployment

Benefits in this category provide compensation for the

loss of income resulting from involuntary unemployment.

In some countries, these programs are independent of

other social security measures and may be closely linked

with employment services. In other countries, the

unemployment programs are included with social security

measures covering other short-term risks, although

employment services may continue to verify

unemployment and assist in a job search.

Unemployment programs, which exist mainly in

industrialized countries, are compulsory and fairly broad

in scope in many countries. Some restrict benefits to

those who satisfy a means or income test. In addition to

the programs offering scheduled payments, a number of

countries provide lump-sum grants, payable by either a

government agency or the employer. In addition, employers in many instances are required to pay lump-sum

severance indemnities to discharged workers.

Coverage. About half of the compulsory unemployment

programs cover the majority of employed persons,

regardless of the type of industry. Coverage under the

remaining programs is limited to workers in industry and

commerce. A few exclude salaried employees earning

more than a specified amount. Some have special

provisions covering temporary and seasonal employees.

Several countries have special occupational

unemployment programs, most typically for workers in

the building trades, dockworkers, railway employees, and

seafarers.

Voluntary insurance systems are limited to industries in

which labor unions have established unemployment funds.

Membership in these funds is usually compulsory for

union members in a covered industry and may be open on

a voluntary basis to nonunion employees. Noninsured

workers, such as recent school graduates or the selfemployed, for example, may be eligible for a governmentsubsidized assistance benefit when they become

unemployed.

Source of Funds. The methods used to finance

unemployment insurance are usually based on the same

contributory principles as for other branches of social

insurance—contributions amounting to a fixed percentage

of covered wages are paid on a scheduled basis. In

many cases, the government also grants a subsidy,

particularly for extended benefits.

Unemployment insurance contributions are shared

equally between employees and employers in many

countries. Alternatively, the entire contribution may be

made by the employer. However, government subsidies

may be quite large, amounting to as much as two-thirds

of the program’s expenditures. Means-tested unemployment assistance programs are financed entirely by

governments, with no employer or employee contribution.

Qualifying Conditions. To be entitled to unemployment

benefits, a worker must be involuntarily unemployed and

have completed a minimum period of contributions or

covered employment. The most common qualifying

period is 6 months of coverage within the year before

employment ceased. In a number of industrialized

countries, however, students recently out of school who

are unable to find jobs may be eligible for unemployment

benefits, even without a work record. This benefit

provides a transition from school to work, particularly in

periods of recession.

Nearly all unemployment insurance programs, as well

as those providing unemployment assistance, require that

applicants be capable of, and available for, work. An

unemployed worker, therefore, is usually ineligible for

unemployment benefits when incapacitated or otherwise

unable to accept a job offer. Usually, the unemployed

worker must register for work at an employment office

and report regularly for as long as payments continue.

This close linkage between unemployment benefits and

placement services ensures that benefits will be paid only

after the person has been informed of any current job

opportunities and been found unsuitable.
SSPTW: The Americas, 2003 ♦ 13

An unemployed worker who refuses an offer of a

suitable job without good cause usually will have benefits

temporarily or permanently suspended. Most programs

stipulate that the job offered must have been suitable for

the worker. The definitions of suitable employment vary

considerably. Generally, the criteria include the rate of

pay for the job being offered in relation to previous

earnings; distance from the worker’s home; relationship

to the worker’s previous occupation, capabilities, and

training; and the extent to which the job may involve

dangerous or unhealthy work. In some countries, longterm unemployed workers may also be obliged to undertake employment retraining programs. Some countries

also provide the unemployed with access to educational

placements. If an unemployed worker refuses a place on

a retraining program or fails, without good cause, to

attend an educational placement, benefits can be temporarily or permanently suspended.

An unemployed worker may satisfy all of the qualifying conditions for a benefit but still be temporarily or

permanently disqualified. Nearly all unemployment

systems disqualify a worker who left voluntarily without

good cause, was dismissed because of misconduct, or

participated in a labor dispute leading to a work stoppage

that caused the unemployment. The period of disqualification varies considerably, from a few weeks to permanent disqualification.

Unemployment Benefits. Weekly benefits are usually a

percentage of average wages during a recent period. A

system of wage classes rather than a single fixed

percentage is used in some countries. The basic rate of

unemployment benefits is usually between 40 percent and

75 percent of average earnings. However, a ceiling on

the wages used for benefit computations or maximum

benefit provisions may considerably narrow the range

within which the basic percentage of wages applies.

Flat-rate amounts are sometimes payable instead of

graduated benefits that vary with past wages and customarily differ only according to the family status or,

occasionally, the age of the worker. Supplements for a

spouse and children are usually added to the basic benefit

of unemployed workers who are heads of families.

These supplements are either flat-rate amounts or an

additional percentage of average earnings.

Most countries have a waiting period of several days

before unemployment benefits become payable to reduce

the administrative burden of dealing with a very large

number of small claims. Most waiting periods are

between 3 and 7 days. Some programs have a waiting

period for each incident of unemployment, and others

limit eligibility to once a year. Longer waiting periods

may be prescribed for certain workers, such as the

seasonally employed.

Most countries place a limit on the period during which

unemployment benefits may be continuously drawn.

Typically, this limit varies from 8 to 36 weeks but may be

longer in certain cases.

Duration of benefits may also depend on the length of

the preceding period of contribution or coverage under

the program. That criterion may reduce the maximum

duration of unemployment benefits for workers with brief

work histories. However, workers with a long history of

coverage may, under some programs, have their benefit

period extended well beyond the ordinary maximum.

Many unemployed workers who exhaust the right to

ordinary benefits continue to receive some assistance,

provided their means or incomes are below specified

levels. Recipients are usually required to continue

registering and reporting at an employment exchange.

Some countries that have unemployment assistance but

no insurance program do not place any limit on the

duration of payments. A number of countries require that

insured workers approaching retirement age who have

been out of work for a specified period be removed from

the unemployment rolls and granted a regular old-age

benefit.

Administrative Organization. Unemployment insurance

systems may be administered by government

departments or self-governing institutions that are usually

managed by representatives of insured persons,

employers, and the government.

Unemployment insurance and placement service

programs usually maintain a close administrative relationship that ensures that benefits are paid only to workers

who are registered for employment. At the same time,

this liaison increases the effectiveness of the placement

services by providing an incentive, through payment of

benefits, for unemployed persons to register and report

regularly.

Some countries have merged the administration of

unemployment insurance and employment service

programs, especially at the lower administrative levels

where claims are received and benefits are paid by the

local employment office. Other countries require persons

to register with a local employment office, but the receipt

of claims and payment of benefits are handled by a

separate insurance office.

In addition to providing an income for the unemployed,

many governments have elaborate measures to prevent

or counteract unemployment. The typical procedure is

for government employment services to work with

industry to promote occupational and geographic mobility

of labor and to minimize unemployment caused by

economic or technological developments; they do that by

subsidizing the retraining and relocation of workers in

industries that are declining or being restructured. Gov-
14 ♦ SSPTW: The Americas, 2003

ernments may grant tax and other incentives to industry

to locate in areas of high unemployment, or they may

allocate funds to create jobs in anticipation of periods of

seasonal unemployment.

Family Allowances

The general purpose of family allowance programs is to

provide additional income for families with young children

in order to meet at least part of the added costs of their

support. These programs may either be integrated with

other social security measures or kept entirely separate.

In this report, family allowances primarily include regular

cash payments to families with children. In some

countries, they also include school grants, birth grants,

maternal and child health services, and allowances for

adult dependents.

Most industrialized countries have family allowance

programs that originated in Europe in the 19th century

when some large companies began paying premiums to

workers with large families. The idea spread gradually,

and several European countries enacted programs during

the 1920s and 1930s. Most programs in operation today,

however, have been in place since 1945.

Types of Systems and Coverage. Family allowance

programs are of two types: universal and employmentrelated. The first category, in principle, provides

allowances to all resident families with a specified

number of children. The second category provides

allowances to all wage and salary workers and, in some

cases, the self-employed. A few systems cover some

categories of nonemployed persons as well. Most

employment-related programs continue to pay family

allowances to insured persons with dependent children in

their care when they retire or are temporarily off the job

and receiving sickness, unemployment, work injury,

disability, or other benefits. Employment-related family

programs also pay allowances to widows of social

security beneficiaries.

Source of Funds. The differences in family allowance

programs are reflected in the methods used for financing.

In universal systems, the entire cost is usually covered by

general revenue. By contrast, countries linking eligibility

with employment meet the cost of allowances entirely or

in considerable part from employer contributions, usually

at a uniform percentage-of-payroll rate. If employer

contributions do not cover the entire cost, the remainder

is usually met from a government subsidy. Few countries

require an employee contribution toward family

allowances, although some require self-employed persons

to contribute.

Eligibility. Eligibility is commonly related to the size of

the family and, in some cases, to family income. Many

countries pay allowances beginning with the first child.

In addition, some countries pay an allowance for a

nonemployed wife or other adult dependent, even if there

are no children.

In some countries, families with only one child are

ineligible. Age requirements vary but are usually tied to

the last year of school or the minimum working age,

which are often the same and fall somewhere between

ages 14 and 18. Under most programs, the continuation

of schooling, apprenticeship, or vocational training

qualifies a child for an extension of the age limit. In the

case of disabled children, many countries extend the age

limit beyond that for continued education or pay allowances indefinitely.

Benefits. Whether a program pays a uniform rate for all

children or an increasing or decreasing amount for each

additional child may reflect the history or the intent of the

program. The allowance structure may vary, for

example, depending on whether the primary intent is to

provide assistance or stimulate population growth. The

allowance in most countries is a uniform amount for

every child, regardless of the number of children in a

family. The allowance in most of the other countries

increases for each additional child; the payment for a

fifth child, for example, may be considerably larger than

that for the first or second child. In a few countries, the

allowance per child diminishes or ceases with the addition

of children beyond a certain number. In some countries,

family allowances (and tax exemptions for dependent

family members) have been replaced or supplemented by

credits or other forms of a negative income tax.

Administrative Organization. In countries where family

allowances are available to all families and financed from

general revenues, the program is usually administered by

a government department. Where allowances are

payable mainly to families of employed persons and

financed primarily from employer contributions, the

administration may be by a semiautonomous agency

under public supervision. Equalization funds may handle

the program’s financial operations. Each employer pays

family allowances to its employees with their wages.

The firm then settles with the local fund only the surplus

or deficit of contributions due, after deducting allowances

the firm has paid. A similar procedure of settling only

surpluses or deficits is followed by the local funds in

relation to the regional equalization funds under whose

supervision they operate. The equalization process

makes it possible to fix a uniform contribution rate for all
SSPTW: The Americas, 2003 ♦ 15

employers, regardless of the number of children in their

employees’ families. It also eliminates any effect

allowances might have in inducing employers to

discriminate in hiring workers with children.
16 ♦ SSPTW: The Americas, 2003

(Continued)

Table 1.

Types of social security programs

 Sickness and maternity

Old age, Cash Cash

disability, benefits benefits plus Work Family

Country survivors for both medical care a injury Unemployment allowances

Antigua and Barbuda XX b b b b

Argentina XX X X X X

Bahamas XX b X b b

Barbados XX b X X b

Belize XX b X b b

Bermuda Xb c X b b

Bolivia XX X X b X

Brazil XX X X X X

British Virgin Islands XX b X b b

Canada XX X X X X

Chile XX X X X X

Colombia XX X X X X

Costa Rica XX X X b X

Cuba XX X X b X

Dominica XX b X b b

Dominican Republic XX X X b b

Ecuador XX X X X b

El Salvador XX X X b b

Grenada XX b X b b

Guatemala XX X X b b

Guyana XX b X b b

Haiti Xd d X b b

Honduras XX X X b b

Jamaica Xd b X b b

Mexico XX X X X X

Nicaragua XX X X b X

Panama XX X X b b

Paraguay XX X X b b

Peru XX X X b b

Saint Kitts and Nevis XX b X b b

Saint Lucia XX b X b b
SSPTW: The Americas, 2003 ♦ 17

Table 1.

Continued

 Sickness and maternity

Old age, Cash Cash

disability, benefits benefits plus Work Family

Country survivors for both medical care a injury Unemployment allowances

Saint Vincent and

the Grenadines XX b X b b

Trinidad and Tobago XX X X b X

United States XX X X X X

Uruguay Xe e X X X

Venezuela XX X X X e

SOURCE: Based on information in the country summaries in this volume.

a. Coverage is provided for medical care, hospitalization, or both.

b. Has no program or information is not available.

c. Medical benefits only.

d. Maternity benefits only.

e. Coverage is provided under other programs.
18 ♦ SSPTW: The Americas, 2003

Table 2.

Types of mandatory systems for retirement income

Occupational Individual

Flat- Earnings- Means- Flat-rate Provident retirement retirement

 Country rate related tested universal funds schemes schemes

Antigua and Barbuda X X

Argentina XX X

Bahamas X X

Barbados X X

Belize X X

Bermuda Xa X X

Bolivia X

Brazil X X

British Virgin Islands X

Canada X Xb

Chile Xc Xd

Colombia X Xd

Costa Rica XX X

Cuba X

Dominica X

Dominican Republic Xc X X

Ecuador X

El Salvador Xc Xd

Grenada X

Guatemala X

Guyana X

Haiti X

Honduras X

Jamaica Xe Xe

Mexico Xc Xd

Nicaragua X X

Panama X

Paraguay X

Peru X Xf

Saint Kitts and Nevis X X

Saint Lucia X

(Continued)
SSPTW: The Americas, 2003 ♦ 19

Table 2.

Continued

Occupational Individual

Flat- Earnings- Means- Flat-rate Provident retirement retirement

 Country rate related tested universal funds schemes schemes

Saint Vincent and

the Grenadines X

Trinidad and Tobago X X

United States X X

Uruguay XX X

Venezuela Xe Xe

SOURCE: Based on information in the country summaries in this volume.

NOTE: The types of mandatory systems for retirement income are defined as follows:

Flat-rate pension: A pension of uniform amount or based on years of service or residence but independent of earnings.

It is financed by payroll tax contributions from employees, employers, or both.

Earnings-related pension: A pension based on earnings. It is financed by payroll tax contributions from employees,

employers, or both.

Means-tested pension: A pension paid to eligible persons whose own or family income, assets, or both fall below

designated levels. It is generally financed through government contributions, with no contributions from employers or

employees.

Flat-rate universal pension: A pension of uniform amount normally based on residence but independent of earnings. It is

generally financed through government contributions, with no contributions from employers or employees.

Provident funds: Employee and employer contributions are set aside for each employee in publicly managed special

funds. Benefits are generally paid as a lump sum with accrued interest.

Occupational retirement schemes: Employers are required by law to provide private occupational retirement schemes

financed by employer and, in some cases, employee contributions. Benefits are paid as a lump sum, annuity, or pension.

Individual retirement schemes: Employees and, in some cases, employers must contribute a certain percentage of

earnings to an individual account managed by a public or private fund manager chosen by the employee. The accumulated

capital in the individual account is used to purchase an annuity, make programmed withdrawals, or a combination of the two

and may be paid as a lump sum.

a. The benefit increases with the length of the contribution period.

b. The universal pension is increased by an income-tested supplement.

c. The earnings-related social insurance system is closed to new entrants and is being phased out.

d. The government provides a guaranteed minimum pension.

e. The pension formula contains a flat-rate component as well as an earnings-related element.

f. The guaranteed minimum pension has not been implemented.
20 ♦ SSPTW: The Americas, 2003

(Continued)

Country Men Women Men Women Men Women

Early 

pensionable

age b

Statutory

pensionable 

age

Life 

expectancy 

at birth (years)

GDP

per

capita

(U.S.$)

Dependency

ratio a

Percentage

65 or 

older

Total

population

(millions)

Table 3.

Demographic and other statistics related to social security, 2003

Antigua and

Barbuda 0.067 4.5 48.3 68.9 73.7 60 60 c c 10,541

Argentina 37 9.7 59.8 70.6 77.7 65 60 c c 12,377

Bahamas 0.304 5.4 53.7 65.2 73.9 65 65 c c 17,012

Barbados 0.267 10.4 45 74.5 79.5 65 65 64 64 15,494

Belize 0.226 4.2 74.2 73 75.9 65 65 60 60 5,606

Bermuda 0.064 11.5 44.3 75.3 79.4 65 65 c c 35,200

Bolivia 8.3 4 77.4 61.9 65.3 65 65 c c 2,424

Brazil 170.4 5.1 51.4 64.7 72.6 65 d 60 d c c 7,625

British Virgin

Islands 0.021 5 36.7 75 77.1 65 65 c c 16,000

Canada 30.7 12.6 46.5 76.2 81.8 65 65 c c 27,840

Chile 15.2 7.2 55.3 73 79 65 60 c c 9,417

Colombia 42.1 4.7 60.1 69.2 75.3 60 55 c c 6,248

Costa Rica 4 5.1 59.9 75 79.7 61 59 c c 8,650

Cuba 11.1 9.6 44.5 74.8 78.7 60 55 c c 2,300

Dominica 0.069 7.9 55.5 71.2 77.1 60 60 c c 5,880

Dominican

Republic 8.3 4.3 60.8 64.4 70.1 60 60 57 57 6,033

Ecuador 12.6 4.7 62.7 68.3 73.5 55 55 c c 3,203

El Salvador 6.2 5 68.3 67.7 73.7 60 55 c c 4,497

Grenada 0.089 3.6 63.1 62.7 66.3 60 60 c c 7,580

Guatemala 11.3 3.5 89.2 63 68.9 62 62 c c 3,821

Guyana 0.76 5 55.1 58 66.9 60 60 c c 3,963

Haiti 8.1 3.7 79.5 50.2 56.5 55 55 c c 1,700

Honduras 6.4 3.4 82.4 63.2 69.1 65 60 c c 2,453

Jamaica 2.5 7.2 63.1 73.7 77.8 65 60 c c 3,639

Mexico 98.8 4.7 60.9 70.4 76.4 65 65 c c 9,023

Nicaragua 5 3 84.1 67.2 71.9 60 60 c c 2,366

Panama 2.8 5.5 58.3 72.6 77.3 62 57 c c 6,000

Paraguay 5.4 3.5 75.4 68.6 73.1 60 60 c c 4,426

Peru 25.6 4.8 61.8 67.3 72.4 65 65 c c 4,799

Saint Kitts

and Nevis 0.038 8.5 60 68.7 74.5 62 62 c c 12,510

Saint Lucia 0.147 5.7 60.7 71.1 76.4 61 61 c c 5,703
SSPTW: The Americas, 2003 ♦ 21

Country Men Women Men Women Men Women

Early 

pensionable

age b

Statutory

pensionable 

age

Life 

expectancy 

at birth (years)

GDP

per

capita

(U.S.$)

Dependency

ratio a

Percentage

65 or 

older

Total

population

(millions)

Table 3.

Continued

Saint Vincent

and the

Grenadines 0.116 6.4 52.8 71.3 74.9 60 60 c c 5,555

Trinidad and

Tobago 1.2 6.7 46.3 72.5 77.2 65 65 60 60 8,964

United States 283.2 12.3 51.5 74.6 80.4 65 65 c c 34,142

Uruguay 3.3 12.9 60.5 71.6 78.9 60 60 c c 9,035

Venezuela 24.1 4.4 62.6 70.9 76.7 60 55 c c 5,794

SOURCES: United Nations Population Division, Department of Economic and Social Affairs. 2002. World Population Ageing

1950–2050. New York: United Nations; Human Development Report 2002. 2002. Prepared for the United Nations Development

Programme. New York: Oxford University Press; U.S. Central Intelligence Agency. 2003. The World Factbook, 2003. Washington

D.C.: Central Intelligence Agency. Information on statutory and pensionable ages is taken from the country summaries in this

volume.

NOTE: GDP = gross domestic product.

a. Population aged 14 and under plus population aged 65 or older, divided by population aged 15–64.

b. General early pensionable age only; excludes early pensionable ages for specific groups of employees.

c. The country has no early pensionable age, has one only for specific groups, or information is not available.

d. Urban employees.
22 ♦ SSPTW: The Americas, 2003

Table 4.

Contribution rates for social security programs, 2003 (in percent)

Antigua and Barbuda 2 b 5 b 7 b 2 5 7 c

Argentina 7 d 0 7 d 13 13.4 e 26.4 c

Bahamas 1.7 b 7.1 b 8.8 b 1.7 7.1 e 8.8 c

Barbados 5.25 5.25 10.5 6.82 7.57 14.39 c

Belize b,f b,f b,f f f c,f

Bermuda 4 d,g 4 d,g 8 d,g 4 g 4 e,g 8 c,g

Bolivia h 10 d 2 12 d 10 14 i 24 c

Brazil 7.65 b 20 b 27.65 b 7.65 20 e 27.65 c,j,k

British Virgin Islands 3.25 3.25 6.5 4 4.5 8.5 c

Canada 4.95 4.95 9.9 7.05 l 8.89 e,l 15.94 c,k

Chile 10 d 0 10 d 17.6 2.4 e 20 c,k

Colombia 3.375 10.125 13.5 7.375 30.773 38.148

Costa Rica 3.5 6.25 9.75 9 20.5 e 29.5

Cuba h 0 14 b 14 b 0 14 14

Dominica 3 b 7 b 10 b 3 7 e 10 c

Dominican Republic 1.98 5.02 7 4.68 11.32 e 16

Ecuador 9.15 11.15 20.3 12.65 18.36 31.01 c

El Salvador 3.25 d 6.75 10 d 6.25 14.25 20.5 c

Grenada 4 b 5 b 9 b 4 5 9 c

Guatemala 1.83 3.67 5.5 4.83 10.67 15.5 c

Guyana 4.8 b 7.2 b 12 b 4.8 8.73 13.53 c

Haiti h 2 2 4 2 46

Honduras 1 2 3 3.5 7 10.5 c

Jamaica 2.5 b 2.5 b 5 b 2.5 2.5 5 c

Mexico 1.75 4.9 6.65 2 6.6 m 8.6 c

Nicaragua 4 b 6 b 10 b 6.25 13.5 19.75 c

Panama 6.75 2.75 9.5 7.25 10.75 e 18

Paraguay h 9 b 14 b 23 b 9 14 23 c

Peru 8 d 0 8 d 8 9 e 17 c

Saint Kitts and Nevis 5 b 5 b 10 b 5 6 11 c

Saint Lucia 5 b 5 b 10 b 5 5 10 c

(Continued)

Insured

person Employer Total

Insured

person Employer Total

Old age, disability, survivors 

Country

All social security programs a
SSPTW: The Americas, 2003 ♦ 23

Table 4.

Continued

Saint Vincent and

the Grenadines 2.5 b 3.5 b 6 b 2.5 3.55 6.05 c

Trinidad and Tobago h 2.8 b 5.6 b 8.4 b 2.8 5.6 8.4 c,k

United States 6.2 6.2 12.4 8.85 n 13.85 e,n 22.7 c,k,n

Uruguay 15 12.5 27.5 18 17.5 e 35.5 c

Venezuela 1.93 b 4.82 b 6.75 b 4.22 9.98 14.2 c

SOURCE: Based on information in the country summaries in this volume.

a. Includes old age, disability, and survivors; sickness and maternity; work injury; unemployment; and family allowances. In some

countries, the rate may not cover all of these programs. In some cases, only certain groups, such as wage earners, are

represented. When the contribution rate varies, or the country has a dual system with different contribution rates, either the

average or the lowest rate in the range is used.

b. Also includes the contribution rates for other programs.

c. Contributions are subject to an upper earnings limit for some benefits.

d. The contribution rate is for old-age benefits only. Additional contributions are required for survivor and disability insurance.

e. Employers pay the total cost of Work Injury.

f. Contributions are flat-rate according to earnings classes.

g. Plus flat-rate social insurance contributions.

h. Data are at least 4 years old.

i. Employer pays the cost of Family Allowances.

j. Government pays the cost of Unemployment Benefits.

k. Government pays the cost of Family Allowances.

l. Contribution rates may be higher in some provinces.

m. Contribution rates may be higher or lower in some states.

n. Plus flat-rate contributions for medical benefits.

Insured

person Employer Total

Insured

person Employer Total

Old age, disability, survivors 

Country

All social security programs a

Country

Summaries

SSPTW: The Americas, 2003 ♦ 27

Antigua and Barbuda

Antigua and Barbuda

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First and current laws: 1972 (social insurance), with

amendments; and 1993 (social assistance).

Type of program: Dual social insurance and social assistance

system.

Coverage

Employees and self-employed persons aged 16 to 59.

Exclusions: Family and casual employment with weekly wages

under E.C.$7.50.

Source of Funds

Insured person: 3% of earnings (private sector) or 2% of

earnings (public sector); the self-employed contribute 8% of

earnings.

Employer: 5% of payroll.

Government: None, except as an employer. The total cost of

social assistance pensions.

The maximum annual earnings for contribution and benefit

purposes are E.C.$54,000.

Qualifying Conditions

Old-age pension: Age 60 with at least 500 weeks of

contributions for a full pension.

Partial pension: A reduced pension is paid at age 60 with 350

to 499 weeks of contributions.

Transitional pension: A reduced pension is paid at age 60 with

156 weeks of contributions starting before 1975.

Old-age settlement: Age 60 and does not meet the qualifying

conditions for the old-age pension, but has at least 26 paid

contributions starting before 1975 or at least 52 contributions

starting after 1974.

Old-age assistance: Age 65 or older; age 60 if blind or

disabled.

Disability pension: Under age 60 with a minimum of

156 weeks of contributions.

Disability settlement: Under age 60 and does not meet the

qualifying conditions for the disability pension, but has at

least 52 weeks of contributions.

Survivor pension: The insured person was eligible for, or

receiving, the disability pension or an old-age pension at the

time of death. The pension ceases on remarriage.

Survivor settlement: If the insured person was eligible for, or

receiving, the old-age grant or the disability grant.

Funeral grant: The insured person had at least 26 weeks of

paid contributions.

Old-Age Benefits

Old-age pension: The full pension is 25% of covered

earnings, plus 1% for every 50-week period of contributions

above 500 contributions, up to a maximum of 50%.

Partial pension: The full pension is reduced in proportion to

the number of weeks of contributions.

Transitional pension: 25% of earnings.

The minimum monthly pension is E.C.$150.15.

The maximum monthly pension is E.C.$250.25.

Old-age settlement: E.C.$1,000 or 75% of the combined

employer and employee contributions, whichever is higher.

Old-age assistance: E.C.$136.50 a month.

Permanent Disability Benefits

Disability pension: 25% of covered earnings, plus 1% for

every 50-week period of contributions above 500

contributions, up to a maximum of 50%.

The minimum monthly pension is E.C.$136.50.

The maximum monthly pension is E.C.$227.50.

Disability settlement: E.C.$1,000 or 75% of the combined

employer and employee contributions, whichever is higher.

Survivor Benefits

Survivor pension: 50% of the insured’s actual or prospective

pension, payable to a widow aged 50 or older. A limited

pension is paid for 1 year if the widow is under age 50 at the

time of the insured’s death and is employed. The pension is

also payable to a dependent disabled widower.

Orphan’s pension: 25% of the insured’s pension (40% if a full

orphan) is payable to an orphan under age 16 (age 18 if a

student).

Survivor settlement: The benefit should not exceed the

value of the old-age or the disability settlement.

Funeral grant: E.C.$2,500, payable to the person who paid for

the funeral.

Administrative Organization

Ministry of Finance provides general supervision.

Social Security Board administers the program.
28 ♦ SSPTW: The Americas, 2003

Antigua and Barbuda

Sickness and Maternity

Regulatory Framework

First and current laws: 1973 (sickness) and 1973 (maternity).

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employees and self-employed persons aged 16 to 59.

Exclusions: Family and casual employment with weekly wages

under E.C.$7.50.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

The maximum annual earnings for contribution purposes are

E.C.$54,000.

Qualifying Conditions

Cash sickness benefits: Insured for at least 26 weeks;

worked at least 8 weeks in the 13 weeks immediately before the

onset of illness and was employed the day before the onset of

illness. The illness is not the result of an occupational injury.

Cash maternity benefits: Twenty-six weeks of contributions

in the year preceding the expected date of childbirth.

Maternity grant: The grant is payable to an insured woman or

the wife of an insured man, with at least 26 weeks of paid

contributions in the year preceding the expected date of

childbirth.

Sickness and Maternity Benefits

Sickness benefit: 60% of the insured’s average weekly

earnings, payable after a 3-day waiting period.

Average insurable weekly earnings are based on earnings in

the 13 weeks prior to the onset of illness.

Maternity benefit: 60% of the insured’s average weekly

earnings, payable for a maximum of 13 weeks commencing not

earlier than 6 weeks before the expected date of childbirth or

later than the expected week of childbirth.

Average insurable weekly earnings are based on earnings in

the 52 weeks prior to the 6 weeks before the expected week of

childbirth.

Maternity grant: A lump sum of E.C.$400.

Workers’ Medical Benefits

No statutory benefits are provided.

Medical services are provided by the Ministry of Health

directly through public health facilities. Necessary medical

treatment is permitted abroad, up to a maximum of E.C.$2,000.

Dependents’ Medical Benefits

No statutory benefits are provided.

Medical services are provided by the Ministry of Health

directly through public health facilities. Necessary medical

treatment is permitted abroad, up to a maximum of E.C.$2,000.

Administrative Organization

Ministry of Finance provides general supervision.

Social Security Board administers the program.
SSPTW: The Americas, 2003 ♦ 29

Argentina

Argentina

Exchange rate: U.S.$1.00 equals 2.87 pesos.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1904 to 1958 (various laws on special categories),

1944 (commerce), 1946 (industry), and 1954 (rural workers).

Current law: 1993, implemented in 1994.

Type of program: Social insurance and individual account

system.

Note: Beginning in 1994, the insured, including new entrants,

can opt to direct part of the contribution to an individual

account or to remain only in the social insurance system.

Coverage

Social insurance and individual account: Employed and

self-employed persons, except for military personnel and

security forces, police personnel, and persons younger than

age 18.

Social assistance: The needy elderly and disabled.

Source of Funds

Insured person: 11% of earnings if opting for social

insurance only; 7% of earnings, plus an additional amount for

disability and survivor insurance and administrative fees, if

opting into the individual account system; the self-employed

contribute 27% of earnings.

Employer: 17% to 21% of payroll (according to the type of

enterprise) for social insurance only.

The employer contributions also help finance family

allowances and unemployment benefits.

Government: Contributes to the social insurance system

through general revenue, investment income, and certain

earmarked taxes. The cost of social assistance pensions.

The maximum earnings for contribution purposes are 60 times

the MOPRE (Módulo Previsional). The MOPRE is an indexed

figure determined once a year. The value of the MOPRE is

80 pesos in 2003.

Qualifying Conditions

Social insurance

Old-age pension (basic universal): Age 65 (men) or age 60

(women) with at least 30 years of contributions and service, up

to a maximum of 45 years.

Deferred pension: The insured may substitute 2 years of age

after the retirement age for 1 year of contributions.

The retirement age and contribution and employment

requirements are reduced by up to 10 years for hazardous or

unhealthy occupations.

Compensatory pension: Age 65 (men) or age 60 (women) with

at least 30 years of contributions and service, up to a maximum

of 45 years. The benefit is paid if the insured has credited

contributions for the period before June 1994.

In addition to the above, the following qualifying conditions

apply if the insured opts to remain only in the social insurance

system.

Additional pension: Age 65 (men) or age 60 (women) with at

least 30 years of contributions and service, up to a maximum of

45 years. The additional pension is paid if the insured is

credited with contributions since June 1994.

Advanced age benefit: Age 70 (men and women) and has at

least 10 years of service with contributions paid as either

employed or self-employed, including 5 of the last 8 years

before leaving employment. The self-employed must have

been insured for at least 5 years.

Disability pension: The loss of at least 66% of earning

capacity, younger than the ordinary retirement age, and not

receiving early retirement benefits. The insured has paid

contributions on a regular or nonregular basis and meets the

qualifying conditions.

Survivor pension: The insured must have paid contributions

on a regular or nonregular basis and met the qualifying

conditions.

Eligible survivors include a widow(er) or partner; an unmarried

child younger than age 18 who is not receiving benefits; a

daughter who is a widow and younger than age 18 who is not

receiving benefits; a disabled child (regardless of age) who

was dependent on the insured.

Social insurance and individual account

Old-age basic universal pension (social insurance): Age 65

(men) or age 60 (women) with at least 30 years of contributions

and service, up to a maximum of 45 years.

Deferred pension: The insured may substitute 2 years of age

after the retirement age for 1 year of contributions.

The retirement age and contribution and employment

requirements are reduced by up to 10 years for hazardous or

unhealthy occupations.

Compensatory pension (social insurance): Age 65 (men) or

age 60 (women) with at least 30 years of contributions and

service, up to a maximum of 45 years. The benefit is paid if the

insured has credited contributions for the period before June

1994.

Old-age pension (individual account): Age 65 (men) or age 60

(women).

Disability pension (individual account): The loss of at least

66% of earning capacity, younger than the ordinary retirement

age, and not receiving early retirement benefits. The insured

has paid contributions on a regular or nonregular basis and

meets the qualifying conditions.
30 ♦ SSPTW: The Americas, 2003

Argentina

Survivor pension (individual account): The insured must have

paid contributions on a regular or nonregular basis and met the

qualifying conditions.

Social assistance: Indigent residents and aged 70 or older or

disabled.

Old-Age Benefits

Social insurance

Old-age basic universal pension: 2.5 MOPREs, plus 1% of

average earnings for every year of contributions exceeding

30 years, up to a maximum of 45 years.

The value of the MOPRE is 80 pesos in 2003.

Deferred pension: The base pension is increased in proportion

to the additional years of contributions.

Compensatory pension: 1.5% of the insured’s average

monthly salary during the last 10 years or average updated

amounts for all periods with contributions paid before July

1994, up to a maximum of 35 years for the self-employed.

In addition to the above, the following benefits are paid if the

insured opts to remain only in the social insurance system.

Additional pension: 0.85% of the insured’s average monthly

salary during the last 10 years or average updated amounts for

all periods with contributions paid after July 1994, up to a

maximum of 35 years for the self-employed.

Advanced age benefit: A monthly fixed amount.

Social insurance and individual account

Old-age basic universal pension (social insurance): 2.5

MOPREs, plus 1% of average earnings for every year of

contributions exceeding 30 years, up to a maximum of 45 years.

The value of the MOPRE is 80 pesos in 2003.

Deferred pension: The base pension is increased in proportion

to the additional years of contributions.

Compensatory pension (social insurance): 1.5% of the

insured’s average monthly salary during the last 10 years or

average updated amounts for all periods with contributions

paid before July 1994, up to a maximum of 35 years for the selfemployed.

Old-age pension (individual account): The pension depends

on the insured’s contributions plus accrued interest. The

pension is payable as an annuity or as programmed

withdrawals.

Social assistance: A monthly fixed amount.

Permanent Disability Benefits

Disability pension (social insurance and individual

account): 70% of average salary (regular contributor) or 50%

of average salary (nonregular contributor) during the 5 years

prior to the onset of disability.

Disability pension (social assistance): A monthly fixed

amount (increments may be paid for dependents under Family

Allowances).

Survivor Benefits

Survivor pension (social insurance and individual account)

Survivor pension (the deceased was a pensioner): 70% of

the insured’s pension is payable to a widow(er) or partner

without dependents; 50% to a widow(er) or partner with

children; 20% for each eligible child.

The maximum survivor pension is 100% of the insured’s

pension.

Survivor pension (the deceased was actively insured): 70%

of average earnings (regular contributor) or 50% of average

earnings (nonregular contributor) in the last 5 years. The

pension is payable to a widow(er) or partner without

dependents; 50% to a widow(er) or partner with children; 20%

for each eligible child.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: A lump sum equal to 3 months’ minimum wage.

Administrative Organization

National Social Security Administration (ANSES) provides

supervision and administers the social insurance program.

Superintendent of Pension Fund Management Companies

(SAFJP) provides general supervision of the pension funds.

Pension fund management companies (AFJPs) administer the

pension funds and benefits.

Ministry of Social Development and Environment administers

the social assistance pension program.

Sickness and Maternity

Regulatory Framework

First laws: 1934 (maternity) and 1944 (sickness).

Current laws: 1996 (maternity), 1988 (sickness), and 1988

(medical benefits).

Type of program: Social insurance (medical benefits),

employer-liability (cash sickness benefits), and employmentrelated system (maternity benefits).

Coverage

Cash sickness benefits: No statutory benefits are provided.

(Under employment law, the employer must pay monthly cash

sickness benefits to employees.)

Cash maternity benefits: Employed women, except domestic

servants.

Medical benefits: Employed persons and pensioners, except

the military police, provincial and municipal public-sector

employees, and beneficiaries of noncontributory or social

assistance benefits.
SSPTW: The Americas, 2003 ♦ 31

Argentina

Source of Funds

Cash maternity benefits

Insured person: None.

Employer: See source of funds under Family Allowances,

below. (The average employer contribution is 4.7% of payroll.)

Government: See source of funds under Family Allowances,

below.

Medical benefits

Insured person: 6% of earnings, plus 1.5% of earnings for

each covered dependent besides the spouse or children.

Pensioners contribute between 3% and 6% of the pension.

Employer: The average contribution is 7.2% of payroll.

Government: Subsidizes coverage of persons who would not

otherwise qualify.

Qualifying Conditions

Cash sickness benefits: No statutory benefits are provided.

(Under employment law, the employer must pay monthly cash

sickness benefits to employees. The duration of benefits

depends on the length of the employment period.)

Cash maternity benefits: At least 3 months’ continuous

employment before the expected date of childbirth.

Medical benefits: Currently employed or a pensioner.

Sickness and Maternity Benefits

Sickness benefit: No statutory benefits are provided. (Under

employment law, employers must provide 100% of salary for

3 months to employees with less than 5 years of service;

6 months with more than 5 years of service. The cash benefit

is payable for twice as long (6 months or 12 months,

respectively) to workers with dependents.)

Maternity benefit: The benefit is equal to 3 months’ average

gross earnings before the maternity leave period.

Workers’ Medical Benefits

Benefits include medical and hospital care included in the

PMOEM (Mandatory Emergency Medical Program).

Dependents’ Medical Benefits

Eligible dependents include a spouse, single children under

age 21 (up to age 25 if a student), children older than age 21 if

disabled and dependent on the insured.

Other dependents are eligible only with the payment of

additional contributions.

Administrative Organization

Ministry of Health provides general supervision.

Superintendent of Health Services provides control,

coordination, and administration of the program.

Work Injury

Regulatory Framework

First law: 1915.

Current law: 1995.

Type of program: Employer-liability system.

The employer may self-insure if solvency requirements are met

and medical care services can be guaranteed. In case the

employer does not meet both conditions, mandatory insurance

must be taken with a work injury insurer (ART).

Coverage

Employed persons in the private and public sectors.

Source of Funds

Insured person: None.

Employer: Total cost, met through a work injury insurer or

through self-insurance.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

Base earnings are payable monthly starting from the day after

the disability arises. The employer pays for the first 10 days,

with the remaining period covered by the ART. The benefit is

payable until recovery or certification of disability.

The disability is presumed to be permanent if it continues

beyond 1 year.

Permanent Disability Benefits

For an assessed degree of disability of 66% or more

(provisional total disability), the benefit is 70% of base

earnings.

Permanent total disability: The disability benefit plus a lumpsum benefit of 40,000 pesos.

Provisional partial disability: The insured’s monthly base

earnings multiplied by the assessed degree of disability, plus

family allowances.

Permanent partial disability: A lump-sum benefit equal to

53 times the monthly base earnings multiplied by the assessed

degree of disability and a coefficient resulting from dividing 65

by the age of the worker at the date of the start of disability;

when the assessed degree of disability is 50% or less, the sum

cannot be higher than the amount of 180,000 pesos multiplied

by the assessed degree of disability. For an assessed degree

of disability of more than 50% but less than 66%, the benefit

cannot exceed 180,000 pesos. In addition, the insured receives

a lump-sum benefit of 30,000 pesos.
32 ♦ SSPTW: The Americas, 2003

Argentina

Severe disability: The disability benefit plus a lump-sum

benefit of 40,000 pesos and a monthly benefit equal to

3 MOPRE paid by the ART.

Workers’ Medical Benefits

Benefits include the cost of medical attention, appliances, and

pharmaceuticals covered by the ART.

Survivor Benefits

70% of average earnings (regular contributor) or 50% of

average earnings (nonregular contributor) in the last 5 years,

plus a monthly complementary benefit financed through the

ART. The complementary benefit is equal to 53 times the

monthly base earnings multiplied by a coefficient resulting

from dividing 65 by the age of the worker at the date of the first

sign of disability. The amount cannot exceed 180,000 pesos.

In addition, eligible survivors receive a lump sum of

55,000 pesos.

The pension is payable to a widow(er) or partner without

dependents; 50% to a widow(er) or partner with children; 20%

for each eligible child.

Administrative Organization

Superintendent of Work Injury provides general supervision.

Work injury insurers are responsible for work injury prevention

and the management of benefits.

Unemployment

Regulatory Framework

First and current laws: 1967 (construction workers only) and

1991 (social insurance).

Type of program: Social insurance system.

Coverage

Employed persons under a labor contract and contributing to

the National Employment Fund.

Source of Funds

Insured person: None.

Employer: 1.5% of payroll.

Government: Provides subsidies.

Qualifying Conditions

Unemployment benefits: Twelve months of contributions

before the date of unemployment. Must be registered and

available for suitable employment and not be a recipient of any

other social security benefit.

Unemployment Benefits

50% of the insured’s best wage in the 6 months before the date

of unemployment (not less than 150 pesos and not more than

300 pesos), plus a percentage amount based on the number of

months of paid contributions (never less than 150 pesos). The

benefit varies from 100% of the calculated amount for the first

4 months to 85% of the same amount for the fifth to the eighth

months and to 75% for the ninth to the twelfth months.

In the construction industry, employers must pay a severance

indemnity to dismissed employees. From the fifth to the eighth

month, the monthly benefit is equal to 85% of the amount paid

for the first 4 months.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

National Social Security Administration administers the

program.

Family Allowances

Regulatory Framework

First law: 1957.

Current law: 1996.

Type of program: Social insurance and social assistance

system.

Coverage

Social insurance: Employed persons in the private sector

and beneficiaries of work injury and unemployment programs.

Social assistance: Beneficiaries from the social insurance,

individual account, and social assistance programs.

Source of Funds

Social insurance

Insured person: None.

Employer: The average contribution is 4.7% of payroll.

Government: Cost of benefits for pensioners and other

recipients of noncontributory benefits.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Child benefit: A monthly benefit is paid to an employed

person or to a beneficiary of the new pension system who

qualifies for family allowances or to an ART beneficiary for
SSPTW: The Americas, 2003 ♦ 33

Argentina

every child under age 18. The benefit is paid to one of the

parents or to the guardian.

Disabled child benefit: A monthly benefit is paid to an

employed person or to a beneficiary of the new pension

system who qualifies for family allowances or to an ART

beneficiary for every disabled child of any age. The benefit is

paid to one of the parents or to the guardian.

Prenatal grant: A monthly benefit is paid to an employed

person or to an ART beneficiary from the time of conception to

the date of childbirth or end of pregnancy. Current continuous

employment for 3 months is required.

School allowance: An annual benefit is paid to an employed

person or to a beneficiary of the new pension system who

qualifies for family allowances or to an ART beneficiary who

qualifies for a child benefit or a disabled child benefit.

Birth grant: A benefit is paid to an employed person or to an

ART beneficiary for the birth of a child. The grant is paid to

one of the parents or to the guardian. Current continuous

employment for 6 months is required.

Adoption grant: A benefit is paid to an employed person or to

an ART beneficiary for the adopted child. It is paid to one of

the parents or to the adopter. Current continuous employment

for 6 months is required.

Marriage grant: A benefit is paid to both spouses if they are

employed or are ART beneficiaries who qualify for family

allowances. Current continuous employment for 6 months is

required.

Spouse benefit: A monthly benefit is paid to a beneficiary of

the new pension system for a legal spouse who resides in the

country, is totally and permanently disabled, and has no

income.

Social assistance pensions: Noncontributory pensions are

provided for a number of contingencies.

Family Allowance Benefits

Benefits vary by geographic region.

Child benefit: The monthly benefit is between 40 pesos and

86 pesos.

Disabled child benefit: The monthly benefit is between

160 pesos and 320 pesos.

Prenatal allowance: The allowance is between 40 pesos and

86 pesos.

School allowance: The annual benefit is between 130 pesos

and 520 pesos.

Birth grant: 200 pesos.

Adoption grant: 1,200 pesos.

Marriage grant: 300 pesos.

Spouse benefit: The monthly benefit is 30 pesos.

Social assistance pensions: Fixed monthly amounts.

Administrative Organization

Ministry of Labor and Social Security and the Secretariat of

Social Security provide general supervision.

National Administration of Social Security (ANSES)

administers the program.

Ministry of Social Development and Environment administers

the social assistance pension program.
34 ♦ SSPTW: The Americas, 2003

Bahamas

Bahamas

Exchange rate: U.S.$1.00 equals

1 Bahamian dollar (B$).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1956 (old-age noncontributory pensions) and 1967

(public assistance for disability).

Current law: 1972 (national insurance), with 1999 amendment.

Type of program: Dual social insurance and social assistance

system.

Coverage

Social insurance: Employed persons, self-employed persons,

and the voluntarily insured.

Social assistance: Residents who do not qualify under the

National Insurance Act.

Source of Funds

Social insurance

Insured person: 1.7% of earnings, if weekly insurable earnings

are under B$60; 3.4% for earnings above B$60. The selfemployed contribute 8.8% of earnings if eligible for the work

injury program; 6.8% if not eligible.

Employer: 7.1% of payroll, for weekly insurable wages under

B$60, 5.4% for wages above B$60. (0.75% of the employer’s

contribution is earmarked for work injury benefits.)

Government: None.

Maximum earnings for contribution and benefit purposes are

B$20,800 a year.

All of the above contributions also finance cash sickness,

maternity, and work injury benefits (except for certain

categories of self-employed persons).

Social assistance

Insured person: None.

Employer: None.

Government: Total cost of all income-tested allowances in

force prior to October 1974.

Qualifying Conditions

Social insurance

Retirement pension: Age 65 with 150 weeks of paid

contributions. Employees who were over age 35 in 1974 (selfemployed over age 35 in 1976) receive a 25-week credit for each

year that they were over age 35, up to a maximum of 600 weeks,

provided that contributions were paid for 150 weeks during the

first 3 years that the program was in operation.

Entitlement ceases if the insured person earns B$200 or more a

week.

Benefit is paid locally for insured persons who live abroad.

Disability pension: Under age 65 and permanently incapable

of any work. Employees who were over age 35 in 1974 (selfemployed over age 35 in 1976) receive a 25-week credit for each

year that they were over age 35, up to a maximum of 600 weeks,

provided that contributions were paid for 150 weeks during the

first 3 years that the program was in operation.

Survivor pension: The insured person was a pensioner or had

made 150 contributions at the time of death.

Funeral grant: For the death of an insured person or the

spouse of an insured person. The insured must have at least

50 paid contributions.

Social assistance

Noncontributory old-age pension (income-tested): For

resident retired workers aged 65 or older who do not qualify

under the National Insurance Act.

Disability assistance (income-tested): For residents who are

assessed as disabled and who do not qualify under the

National Insurance Act.

Survivor assistance (income-tested): If the deceased did not

qualify under the National Insurance Act.

Old-Age Benefits

Social insurance

Retirement pension: 40% of the covered wage with 750 weeks

of paid or credited contributions; 15% to 38% of the covered

wage for between 150 and 749 weeks of paid or credited

contributions. The pension is increased by 1% of the covered

wage for every 50-week period of paid or credited

contributions above 750, up to a maximum of 60%.

The minimum benefit is B$53.07 a week.

Social assistance

Noncontributory old-age pension (income-tested): B$46.15 a

week.

Permanent Disability Benefits

Social insurance

Disability pension: 40% of the covered wage, according to

wage class, with 750 weeks of paid or credited contributions;

15% to 38% of covered wage for between 150 and 749 weeks of

paid or credited contributions. The pension is increased by

1% of the covered wage for every 50-week period of paid or

credited contributions paid above 750, up to a maximum of

60%.

The minimum benefit is B$53.07 a week.

Social assistance

Disability assistance (income-tested): B$46.15 a week.
SSPTW: The Americas, 2003 ♦ 35

Bahamas

Survivor Benefits

Social insurance

Survivor pension: 50% of the insured’s pension, payable to a

widow aged 40 or older who is incapable of gainful

employment or is caring for a child eligible for survivor’s

benefits. The pension is also payable to a dependent disabled

widower with weekly income less than B$46.15.

The full pension is awarded to a dependent mother over age 40

or a disabled father with income under B$46.15 a week on the

condition that no other survivor has prior entitlement.

The minimum survivor pension is B$53.07 a week.

Orphan’s pension: 10% of the insured’s pension for each

dependent child under age 16 (age 21 if a full-time student) up

to a family maximum of 100%.

Full orphans receive B$21.92 a week each; up to B$25.50 a

week each if over age 12, a student, or disabled.

The minimum orphan’s pension is B$21.92.

Funeral grant: A lump sum of B$1,500 is payable to the person

paying for the funeral expenses. If the funeral costs less than

B$1,500, the remaining balance is payable at the discretion of

the National Insurance Board.

Social assistance

Survivor assistance (income-tested): Adults receive B$46.15 a

week; children receive B$18.46 a week each.

Administrative Organization

Ministry of Housing and National Insurance provides general

supervision.

National Insurance Board administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1972 (national insurance), with 1999

amendment.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed persons and the self-employed.

Source of Funds

Insured person: See contributions under Old Age, Disability,

and Survivors, above.

Employer: See contributions under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Cash sickness benefits: Forty weeks of paid contributions

with 26 weeks paid or credited contributions in the year

preceding the onset of illness, or in the last contribution year,

or 13 weeks paid or credited contributions in the 26 weeks

preceding the onset of illness.

Cash maternity benefits: Fifty weeks of contributions since

entry into the system with 26 weeks of paid or credited

contributions in the preceding contribution year, or 26 weeks

of contributions in the 40 weeks before benefit is due.

Maternity grant: At least 50 paid contributions.

Funeral benefit: The death of an insured person or the

spouse of an insured person. The insured person must have at

least 50 paid contributions.

Sickness and Maternity Benefits

Sickness benefit: 60% of average weekly insurable earnings.

The benefit is payable after a 3-day waiting period for up to

26 weeks (may be extended to 40 weeks in certain

circumstances).

The minimum benefit is B$53.07 a week.

Sickness allowance (means-tested): B$46.15 a week for an

insured person who does not meet the qualifying conditions

for sickness benefit.

Maternity benefit: 60% of average weekly insurable earnings.

The benefit is payable for 13 weeks (may be extended to

15 weeks) beginning not earlier than 6 weeks before the

expected date of childbirth.

The minimum benefit is B$43.85 a week.

Maternity grant: A lump sum of B$400 for each live birth.

Funeral benefit: A lump sum of B$1,500.

Workers’ Medical Benefits

No statutory benefits are provided.

Public and private medical care is available at public hospitals

and clinics. Government subsidizes the cost for public

patients, children, the elderly, and indigent persons.

Dependents’ Medical Benefits

No statutory benefits are provided.

Administrative Organization

Prime Minister’s Office provides general supervision.

National Insurance Board administers the program.
36 ♦ SSPTW: The Americas, 2003

Bahamas

Work Injury

Regulatory Framework

First law: 1943 (workmen’s compensation).

Current law: 1972 (national insurance).

Type of program: Social insurance system.

Coverage

Employed persons and certain categories of the self-employed.

Exclusions: Family labor.

Source of Funds

Insured person: None, except for some categories of the selfemployed. (See source of funds under Old Age, Disability, and

Survivors, above.)

Employer: Total cost. (See source of funds under Old Age,

Disability, and Survivors, above.)

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Temporary disability pension: 66.6% of average weekly

covered earnings, payable after a 3-day waiting period for up

to 40 weeks.

The minimum benefit is B$53.07 a week.

Permanent Disability Benefits

Permanent disability pension: 66.6% of average weekly

covered earnings, if the assessed degree of permanent

disability is 100%.

The minimum benefit is B$53.07 a week for total disability.

Partial disability: The pension is proportionately reduced for

an assessed degree of disability of 25% or more.

The minimum benefit is B$36.92 a week for partial disability.

Lump-sum grant: A lump sum of between B$100 and B$2,400 is

also payable, depending on the assessed degree of disability.

Workers’ Medical Benefits

Benefits include hospitalization, general and specialist care,

medicines, and transportation.

Survivor Benefits

Survivor pension: 50% of the insured’s temporary disability

pension.

Orphan’s pension: 10% of the insured’s temporary disability

pension for each dependent child under age 16 (age 21 if a fulltime student) up to a family maximum of 100%.

Industrial death benefit: A lump sum equal to the monthly

value of the survivor pension or orphan’s pension.

Industrial funeral benefit: A lump sum of B$1,500.

Administrative Organization

Ministry of Housing and National Insurance provides general

supervision.

National Insurance Board administers the program.
SSPTW: The Americas, 2003 ♦ 37

Barbados

Barbados

Exchange rate: U.S.$1.00 equals

2.02 Barbadian dollars (B$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1937 (assistance).

Current law: 1966 (national insurance and social security),

with 1982 amendment.

Type of program: Dual social insurance and social assistance

system.

Coverage

Social insurance: All employed persons, public-sector

employees, and the self-employed aged 16 to 64.

Exclusions: Unpaid family labor.

Social assistance: Residents aged 65 or older (aged 18 or

older and incapable of work due to defective eyesight or

serious hearing and speech problems).

Source of Funds

Social insurance

Insured person: 5.25% of earnings; self-employed persons

contribute 10.5% of earnings.

Employer: 5.25% of payroll.

Government: None; except as an employer.

The minimum earnings for contribution purposes are B$21 a

week for employees paid weekly or B$91 a month for

employees paid monthly; self-employed persons, B$1,092 a

year.

The maximum earnings for contribution and benefit purposes

are B$715 a week for employees paid weekly or B$3,100 a

month for employees paid monthly.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Social insurance

Old-age pension: Age 65 with 500 weeks of contributions,

including at least 150 weeks of paid contributions.

Early pension: Under the approval of the Director of the

National Insurance Board, the pension may be paid at age 64 if

the insured is no longer employed or self-employed.

Deferred pension: The pension may be deferred until age 70.

Old-age grant: Age 65 and does not meet the qualifying

conditions for the old-age pension.

Disability pension: Under age 65 with 150 weeks of

contributions.

Disability grant: Under age 65 and does not meet the

qualifying conditions for the disability pension.

Survivor pension: The insured person had at least 150 weeks

of paid contributions.

Funeral grant: The insured person had at least 50 weeks of

paid contributions.

Social assistance

Noncontributory old-age pension: Age 65, satisfies the

residency conditions, and does not meet the qualifying

conditions for a social insurance pension.

Noncontributory disability pension (income-tested): Age 18,

satisfies the residency conditions, and is assessed as

incapable of work due to defective eyesight or serious hearing

and speech problems.

Old-Age Benefits

Social insurance

Old-age pension: 40% of average insurable earnings during

the best 5 years out of the last 15 years (maybe less if the

insured person has fewer contribution years), plus 1% of

earnings for every 50-week period of contributions beyond

500 weeks of contributions.

The minimum weekly pension is B$105.

Old-age grant: A lump sum equal to 6 weeks’ earnings for

every 50-week period of contributions.

Benefit adjustment: Benefits are adjusted periodically in

accordance with cost-of-living changes.

Social assistance

Noncontributory old-age pension: The minimum weekly

pension is B$86.00.

Benefit adjustment: Benefits are adjusted periodically in

accordance with cost-of-living changes.

Permanent Disability Benefits

Social insurance

Disability pension: 40% of average annual insurable earnings

during the best 5 years out of the last 15 years (maybe less if

the insured person has fewer contribution years), plus 1% of

earnings for every 50-week period of contributions beyond

500 weeks of contributions.

The minimum weekly pension is B$105.

Disability grant: A lump sum equal to 6 weeks’ average

insurable earnings for every 50-week period of paid or credited

contributions.

Benefit adjustment: Benefits are adjusted periodically

according to cost-of-living changes.
38 ♦ SSPTW: The Americas, 2003

Barbados

Social assistance

Noncontributory disability pension (income-tested): The

minimum weekly pension is B$86.

Benefit adjustment: Benefits are adjusted periodically

according to cost-of-living changes.

Survivor Benefits

Survivor pension: 50% of the pension paid or payable to the

insured person if the widow(er) is aged 50 or older; the pension

is payable for a limited period of 12 months only to a widow(er)

under age 50. The pension is paid to a disabled widow(er)

under age 50 for the duration of the disability.

Orphan’s pension: 16.6% of the insured’s pension is payable

to each child under age 16 (age 21 if student; no limit if

disabled before age 16); 33.3% if a full orphan or disabled.

The minimum survivor pension is B$105 a week.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: B$1,400 is payable to the person covering the

cost of the funeral of the insured person or his or her spouse.

Benefit adjustment: Benefits are adjusted periodically

according to cost-of-living changes.

Administrative Organization

Ministry of Labor provides general supervision.

Directed by a tripartite board, the National Insurance Office

administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1966 (national insurance and social

security), with amendment.

Type of program: Social insurance system. Cash benefits

only.

Coverage

All employed persons, public-sector employees, and the selfemployed aged 16 to 64.

Exclusions: Unpaid family labor. Permanent government

employees are excluded for sickness insurance.

Source of Funds

Insured person: 0.82% of wages; self-employed persons

contribute 1.64% of earnings.

Employer: 0.82% of payroll.

Government: None; 0.32% of earnings toward the cost of

maternity benefit for government employees.

The minimum earnings for contribution purposes are B$21 a

week for employees paid weekly or B$91 a month for

employees paid monthly; self-employed persons, B$1,092

a year.

The maximum earnings for contribution and benefit purposes

are B$715 a week for employees paid weekly or B$3,100 a

month for employees paid monthly.

Qualifying Conditions

Cash sickness benefits: At least 13 weeks of insurance

coverage; 7 weeks of paid contributions in the last but

1 quarter before the quarter in which the onset of incapacity

began; employed immediately prior to becoming ill or have at

least 39 paid or credited contributions in the 4 consecutive

quarters ending with the last quarter but one before the quarter

of the onset of incapacity.

Cash maternity benefits: At least 26 weeks of insurance

coverage, including 16 weeks of paid contributions in the

2 consecutive quarters ending with the last but 1 quarter

before the quarter in which the benefit is paid.

Self-employed women: At least 39 weeks of contributions in

the 4 consecutive quarters ending with the last but 1 quarter

before the quarter in which the benefit is paid; 16 weeks of paid

contributions in the 2 consecutive quarters ending with the

last but 1 quarter before the quarter in which the benefit is

paid.

Funeral grant: For an insured person who was receiving, or

was entitled to, sickness benefit or maternity benefit.

Maternity grant: For a woman who is not insured or who fails

to meet the coverage requirements for cash maternity benefits

but whose spouse does meet the requirements.

Sickness and Maternity Benefits

Sickness benefit: 66.6% of average insurable weekly

earnings. The benefit is payable after a 3-day waiting

period for up to 26 weeks; may be extended to 52 weeks if

the insured has 150 weeks of paid contributions, including

75 contributions paid or credited in the 3 years before the year

of onset. The waiting period is waived if the illness lasts 21 

or more days.

Maternity benefit: 100% of average insurable weekly

earnings, payable for up to 6 weeks before and 6 weeks after

the expected date of childbirth.

Funeral grant: B$1,400 is payable to the person paying for the

cost of the funeral.

Maternity grant: A lump sum of B$800.

Workers’ Medical Benefits

No statutory benefits are provided.

Free medical care is available in public hospitals and health

centers.
SSPTW: The Americas, 2003 ♦ 39

Barbados

Dependents’ Medical Benefits

No statutory benefits are provided.

Free medical care is available in public hospitals and health

centers.

Administrative Organization

Ministry of Labor provides general supervision.

Directed by a tripartite board, the National Insurance Office

administers the program.

Work Injury

Regulatory Framework

First law: 1916 (workmen’s compensation).

Current law: 1966 (national insurance and social security),

with amendment.

Type of program: Social insurance system.

Coverage

All employed persons, public-sector employees, and some

categories of fishermen aged 16 to 64.

Exclusions: Self-employed persons and unpaid family labor.

Source of Funds

Insured person: None.

Employer: 0.75% of payroll.

Government: None, except as an employer.

The minimum earnings for contribution purposes are B$21 a

week for employees paid weekly or B$91 a month for

employees paid monthly.

The maximum earnings for contribution and benefit purposes

are B$715 a week for employes paid weekly or B$3,100 a month

for employees paid monthly.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

90% of average insurable earnings, payable after a 3-day

waiting period for up to 52 weeks. The waiting period is

waived if the disability lasts for at least 3 weeks.

Permanent Disability Benefits

Permanent disability pension: 90% of average earnings if

totally disabled.

Partial disability: A percentage of the full pension in

proportion to the assessed degree of disability.

A lump-sum grant is paid if the assessed degree of disability is

less than 30%.

Constant-attendance supplement: 50% of the pension.

Workers’ Medical Benefits

Benefits include reimbursement of expenses for medical,

surgical, dental, and hospital treatment; nursing care;

medicines; appliances; and transportation.

Survivor Benefits

Survivor pension: 50% of the insured’s temporary disability

benefit, payable to a dependent spouse.

Remarriage settlement: If the spouse remarries or cohabits, the

pension ceases and a lump sum equal to 1 year’s pension is

paid.

Orphan’s pension: 16.6% of the insured’s temporary

disability benefit for each child under age 16; 33.3% if a full

orphan or disabled. There is no age limit for a disabled orphan.

The maximum survivor pension is 100% of the insured’s

temporary disability benefit.

Funeral grant: B$1,400, payable to the person paying for the

cost of the funeral of the insured worker.

Administrative Organization

Ministry of Labor provides general supervision.

National Insurance Office administers the program.

Unemployment

Regulatory Framework

First and current law: 1982 (national insurance and social

security).

Type of program: Social insurance system.

Coverage

Employees aged 16 to 64.

Exclusions: Self-employed persons, family labor, and

permanent government employees.

Source of Funds

Insured person: 0.75% of earnings.

Employer: 0.75% of payroll.

Government: None, except as an employer.

The minimum earnings for contribution purposes are B$21 a

week for employees paid weekly or B$91 a month for

employees paid monthly.

The maximum earnings for contribution and benefit purposes

are B$715 a week for employees paid weekly or B$3,100 a

month for employees paid monthly.
40 ♦ SSPTW: The Americas, 2003

Barbados

Qualifying Conditions

Unemployment benefit: Under age 65 with 52 weeks of

insurance coverage; at least 20 weeks of paid or credited

contributions in the 3 consecutive quarters ending with the

last but 1 quarter before the onset of unemployment; at least

7 weeks of paid or credited contributions in the last but

1 quarter before the onset of unemployment.

Unemployment Benefits

60% of average insurable weekly earnings for 26 weeks. The

benefit is payable after a 3-day waiting period for up to

26 weeks in any 52-week period. The waiting period is waived

if the insured is unemployed for 21 or more days.

Administrative Organization

Ministry of Labor provides general supervision.

National Insurance Office administers the program.
SSPTW: The Americas, 2003 ♦ 41

Belize

Belize

Exchange rate: U.S.$1.00 equals

2.20 Belize dollars (B$).

Old Age, Disability, and Survivors

Regulatory Framework

First and current law: 1979, with amendments.

Type of program: Dual social insurance and social assistance

system.

Coverage

Social insurance: Employed persons aged 14 to 64, including

public servants.

Exclusions: Casual labor, persons employed less than 8 hours

a week, and military personnel.

Voluntary continuation of coverage for workers entering selfemployment.

Social assistance: Women aged 65 or older who are citizens

or permanent residents of Belize.

Source of Funds

Social insurance

Insured person: Weekly contributions vary according to eight

wage classes:

B$0.83 if weekly earnings are under B$70.00;

B$1.35 for earnings from B$70.00 to B$109.99;

B$1.95 if B$110.00 to B$139.99;

B$3.15 if B$140.00 to B$179.99;

B$4.75 if B$180.00 to B$219.99;

B$6.35 if B$220.00 to B$259.99;

B$7.95 if B$260.00 to B$299.99; and

B$9.55 for weekly earnings of B$300.00 and over.

Employer: Weekly contributions vary according to eight wage

classes:

B$3.57 if weekly earnings are under B$70.00;

B$5.85 for earnings from B$70.00 to B$109.99;

B$8.45 if B$110.00 to B$139.99;

B$9.65 if B$140.00 to B$179.99;

B$11.25 if B$180.00 to B$219.99;

B$12.85 if B$220.00 to B$259.99;

B$14.45 if B$260.00 to B$299.99; and

B$16.05 for weekly earnings of B$300.00 and over.

The employer pays an additional contribution for work injury

benefits on behalf of all employees between the ages of 60 and

64 who have previously received a retirement benefit and for all

employees aged 65 or older.

Government: Covers any deficits and contributes as an

employer.

All of the above contributions also finance sickness and

maternity benefits and work injury benefits.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost of the noncontributory old-age

pension.

Qualifying Conditions

Old-age pension: Age 60 and retired from insurable

employment, with 500 weeks of paid or credited contributions

including 150 paid contributions.

Retirement grant: Paid to an insured person at age 60, who

has at least 26 weeks of paid contributions but does not meet

the qualifying conditions for an old-age pension.

The pensionable age is 65, with the option to retire at age 60.

Retirement from employment is not necessary if aged 65 or

older.

Noncontributory old-age pension: Women aged 65 or older

who have inadequate or no source of income.

Disability pension: At least 150 weeks of paid contributions

since the inception of the program, with at least 110 paid

contributions in the 5 consecutive contribution years

preceding the year of the onset of disability and 5 paid or

credited contributions in the 13 weeks immediately preceding

the week in which the illness leading to the onset of disability

commenced.

Disability grant: Paid to an insured person who has at least

26 weeks of paid contributions but does not meet the

qualifying conditions for a disability pension.

Survivor pension: The insured person was a pensioner or

eligible for a pension at the time of death.

Survivor grant: The insured person was not entitled to a

pension but had at least 26 paid contributions.

Funeral grant: Fifty weeks of paid contributions for a funeral

grant for the insured; 150 weeks of paid contributions for a

spouse or a dependent child.

Old-Age Benefits

Old-age pension: 30% of average weekly earnings based on

the best 3 years of earnings in the last 15 years, plus 2% of

earnings for each 50-week period of contributions beyond

500 weeks up to 750 weeks, and 1% of earnings for every

50-week period of contributions over 750 weeks.

The minimum weekly pension is B$47.

The maximum pension is 60% of average earnings.

Retirement grant: Six times the average weekly insurable

earnings paid or credited or 2.5 times the sum of earnings

divided by the number of weeks of contributions, whichever

is higher.
42 ♦ SSPTW: The Americas, 2003

Belize

The minimum grant is B$800.

Noncontributory old-age pension: B$75 a month.

Permanent Disability Benefits

Disability pension: With at least 500 weeks of contributions,

30% of average weekly earnings based on the best 3 years of

earnings in the last 15 years. With less than 500 weeks of

contributions, 25% of average weekly earnings with 150 to 299

contributions, plus 1% of earnings for every 50-week period of

contributions from 300 to 499 weeks.

The minimum weekly pension is B$47.

The maximum pension is 60% of average earnings.

Disability grant: Six times the average weekly insurable

earnings paid or credited or 2.5 times the sum of earnings

divided by the number of weeks of contributions, whichever is

higher.

The minimum grant is B$800.

Survivor Benefits

Survivor pension: 66.6% of the pension paid or payable to

the insured is payable to a widow who is pregnant or caring for

the insured’s children; aged 50 or older (or disabled) and was

married to the insured for at least 3 years; or to a widower who

was dependent on the insured for at least 3 years.

Orphan’s pension: 25% of the pension paid or payable to the

insured is payable to each child under age 16 (age 21 if a fulltime student); 40% if disabled.

Dependent parent (in the absence of other eligible

survivors): 40% of the pension paid or payable to the insured

is payable to a parent aged 55 or older.

The minimum weekly pension is B$47.

The combined maximum survivor pension for all survivors is

100% of the pension paid or payable to the insured. If the

maximum pension exceeds the limit, each pension is reduced

accordingly.

Survivor grant: Six times the sum of insurable earnings in the

best 3 years of contributions divided by 150 times the number

of units of 50 contributions or 2.5 times the sum of weekly

insurable earnings divided by the number of contributions

times the number of units of 50 contributions, whichever is

higher.

The minimum grant is B$800.

Funeral grant: B$1,500 on the death of the insured person;

B$1,000 to the insured on the death of a spouse; and B$500 to

the insured on the death of a dependent child.

Administrative Organization

Ministry of Finance and Social Security provides general

supervision.

Social Security Board administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1979, with amendments.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed persons aged 14 to 64, including public servants.

Exclusions: Casual labor, persons employed less than 8 hours

a week, and military personnel.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Covers any deficits and contributes as an

employer.

Qualifying Conditions

Cash sickness benefits: Currently employed, with 50 weeks

of contributions including 5 of the 13 weeks preceding the

onset of illness.

Maternity benefits: Fifty weeks of contributions, including 25

of the 39 weeks ending 6 weeks before the expected date of

childbirth or the day on which the benefit was claimed.

Maternity grant: Fifty weeks of contributions, including 25 of

the 50 weeks preceding childbirth.

Sickness and Maternity Benefits

Sickness benefit: 80% of average insurable earnings. The

benefit is payable for up to 156 days; the period may be

extended for an additional 13 weeks at 60% of average

insurable earnings.

Maternity allowance: 80% of average insurable earnings.

The benefit is payable for up to 14 weeks, beginning 7 weeks

before the expected date of childbirth or the day on which the

benefit was claimed.

Maternity grant: B$300 for each child.

Workers’ Medical Benefits

No statutory benefits are provided.

Dependents’ Medical Benefits

No statutory benefits are provided.
SSPTW: The Americas, 2003 ♦ 43

Belize

Administrative Organization

Ministry of Finance and Social Security provides general

supervision.

Social Security Board administers the program.

Work Injury

Regulatory Framework

First and current law: 1979, with amendments.

Type of program: Social insurance system.

Coverage

Employed persons aged 14 or older, including public servants.

Exclusions: Casual labor, employed persons working less than

8 hours a week, and military personnel.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: Covers any deficits and contributes as an

employer.

Qualifying Conditions

Work injury benefits: There are no contribution requirements

and there is no minimum qualifying period.

Temporary Disability Benefits

80% of average earnings, payable from the first day of

incapacity for up to 182 days; may be extended at 60% of

average insurable earnings.

Permanent Disability Benefits

Permanent disability pension: 60% of average insurable

earnings if totally disabled.

Partial disability: If the assessed degree of disability is at least

25%, a percentage of the full pension in proportion to the

assessed degree of disability.

The minimum weekly pension is B$47.

Constant-attendance allowance: 25% of the pension.

Disablement grant: If the assessed degree of disability is

less than 25%, a lump-sum grant is paid. The grant is equal to

average insurable earnings in the 4 weeks before the onset of

disability, multiplied by the assessed degree of disability,

multiplied by 260.

Workers’ Medical Benefits

Benefits include full medical care at a government hospital or

clinic, or treatment abroad if deemed necessary.

Survivor Benefits

Survivor pension: 66.6% of the pension paid or payable to

the insured is payable to a dependent widow who is pregnant

or caring for the insured’s children; aged 50 or older and was

married to the insured person for at least 3 years. A limited

pension may be paid to a widow for 52 weeks if the qualifying

conditions are not met. A pension is also payable to a

disabled widower who was fully dependent on the insured

person for at least 3 years. The widow(er) pension ceases on

remarriage.

Orphan’s pension: 25% of the pension paid or payable to the

insured is paid to each child up to age 16 (age 21 if a full-time

student); 40% if disabled.

Dependent parent (in the absence of other eligible

survivors): 40% of the pension paid or payable to the insured

is payable to parents aged 55 or older.

The minimum weekly pension is B$47.

The combined maximum pension for all survivors is 60% of the

insured’s average insurable earnings in the 4 weeks before the

injury resulting in the insured’s death. If the maximum pension

exceeds the limit, each pension is reduced accordingly.

Administrative Organization

Ministry of Finance and Social Security provides general

supervision.

Social Security Board administers the program.
44 ♦ SSPTW: The Americas, 2003

Bermuda

Bermuda

Exchange rate: U.S.$1.00 equals

1 Bermuda dollar (B$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1967 (old-age and survivors).

Current laws: 1970 (old-age and survivors); 1980 (disability);

and 1998 (occupational pensions), implemented in 2000.

Type of program: Social insurance, social assistance, and

mandatory occupational pension system.

Coverage

Social insurance

Employed and self-employed persons over age 16, except fulltime students who work weekends or during school vacations.

Exclusions: Those who are not ordinarily resident, unless

gainfully employed for more than 26 consecutive weeks.

Voluntary insurance for persons who were previously covered.

Social assistance

Bermudan residents are eligible for social assistance pensions.

Mandatory occupational pensions

Employees aged 23 or older who are Bermudan or the spouse

of a Bermudan and who have worked 720 hours or more for

their current employer in any calendar year.

Source of Funds

Social insurance

Insured person: B$23.20 a week; if over age 65, none. The

self-employed contribute B$46.40 a week; if over age 65,

B$23.20 a week.

Employer: B$23.20 a week per employee.

Government: None; contributes as an employer.

Social assistance

Insured person: None.

Employer: None.

Government: The total cost of social assistance pensions.

Mandatory occupational pension

Insured person: 4% of earnings (5% from January 1, 2004).

Employer: 4% of earnings (5% from January 1, 2004).

Government: None.

The maximum annual earnings for contribution purposes to the

mandatory occupational pension are B$200,000.

Qualifying Conditions

Old-age pension (social insurance): Age 65 with 484 weeks

of contributions, including 50 weeks of contributions for each

year of insurance (a reduced pension is paid with between

25 and 49 weeks). Retirement is not necessary. The pension is

payable abroad.

Old-age settlement (social insurance): The insured does

not meet the qualifying conditions for a pension.

Noncontributory old-age pension (social assistance):

Age 65 and Bermudian with at least 10 years of continuous

residency during the 20 years immediately preceding the

application and does not meet the qualifying conditions for the

old-age pension.

Old-age pension (mandatory occupational): The normal

retirement age is 65.

Disability pension (social insurance): Aged 18 to 64,

employed immediately before the onset of disability, unable to

work during a full year, and 150 weeks of contributions with

50 weeks of contributions for each year of insurance (a

reduced pension is paid with between 25 and 49 weeks).

Disability settlement (social insurance): The insured does

not meet the qualifying conditions for a pension.

Noncontributory disability pension (social assistance):

Aged 18 to 64 with 10 years of residency and permanently

incapable of employment.

Disability pension (mandatory occupational): Assessed as

incapable of work due to a physical or mental condition.

Survivor pension (social insurance): The insured was a

pensioner or met the qualifying conditions for a pension. The

spouse was married to the insured for at least 3 years. A

widow is credited for contribution purposes for every week she

receives a survivor pension and may substitute her husband’s

contribution record for her own.

Survivor settlement (social insurance): The insured did not

meet the qualifying conditions for a pension.

Survivor pension (mandatory occupational): On the

insured’s death, the pension is paid to a beneficiary appointed

by the insured.

Old-Age Benefits

Old-age pension (social insurance): B$157.75 a week

(B$685.49 a month), plus B$0.92 for every 26-week period of

contributions over 484.

Reduced pension: B$342.74, B$411.29, B$479.84, B$548.39, or

B$616.94 a month if the yearly average number of weeks of

contributions is between 25 and 29 weeks, 30 and 34 weeks, 35

and 39 weeks, 40 and 44 weeks, and 45 and 49 weeks,

respectively.

Old-age settlement (social insurance): If the insured does

not meet the qualifying conditions for a pension, employer and

employee contributions are refunded as a lump sum.
SSPTW: The Americas, 2003 ♦ 45

Bermuda

Noncontributory old-age pension (social assistance):

B$314.59 a month.

Minimum pension (means-tested): B$323.68 a month if income

is under B$4,000 a year.

Old-age pension (mandatory occupational): Pension

calculations are either based on average earnings or depend on

the amount of the insured’s accumulated capital.

Permanent Disability Benefits

Disability pension (social insurance): B$456.87 a month.

Reduced pension: The benefit is reduced in proportion to the

number of average annual weeks of contributions if less than

50 weeks but 25 or more.

Disability settlement (social insurance): If the insured does

not meet the qualifying conditions for a pension, employer and

employee contributions are refunded as a lump sum.

Noncontributory disability pension (social assistance):

B$314.59 a month.

Disability pension (mandatory occupational): The benefit

depends on the specific rules that apply to the occupational

scheme.

Survivor Benefits

Survivor pension (social insurance): B$685.49 a month.

Reduced pension: B$342.74, B$411.29, B$479.84, B$548.39, or

B$616.94 a month if the yearly average number of weeks of

contributions is between 25 and 29 weeks, 30 and 34 weeks,

35 and 39 weeks, 40 and 44 weeks, and 45 and 49 weeks,

respectively.

The pension is payable for 26 weeks, or until dependent

children reach age 16, or for life if over age 50 or disabled, or

until remarriage.

Orphan’s pension (social insurance): B$68.39 a month.

Survivor settlement (social insurance): If the insured did

not meet the qualifying conditions for a pension, employer and

employee contributions are refunded as a lump sum.

Survivor pension (mandatory occupational): Benefits are

based on the value of the insured’s contributions, accumulated

capital, or accrued benefits. The benefit is paid as a lump sum.

Administrative Organization

Social insurance and social assistance

Ministry of Finance provides general supervision.

Department of Social Insurance administers the program.

Mandatory occupational pension

Pension Commission supervises and regulates the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1970 (hospital insurance).

Type of program: Compulsory insurance with a public or

private carrier or an approved employer-operated plan

(employed persons). Individual or voluntary insurance

(nonemployed persons). Medical benefits only.

Paid sick leave and paid maternity leave are provided under

employment law.

Coverage

All residents.

Employers are liable for carrying insurance for employees and

their nonemployed spouses.

Source of Funds

Insured person: B$66.60 a month each for an employee and

his or her nonemployed spouse. Other insured persons

contribute B$133.20 a month.

Employer: B$66.60 a month each for an employee and his or

her nonemployed spouse.

Government: A government grant provides 80% of the cost

of medical care for residents aged 65 to 74, 90% for residents

aged 75 or older, and 100% for resident children and indigent

persons.

Qualifying Conditions

Cash sickness and maternity benefits: No statutory

benefits are provided. (Employers must provide paid sick leave

and paid maternity leave under employment law.)

Medical benefits: There is no minimum qualifying period,

except for a 10-month waiting period for maternity care.

Workers’ Medical Benefits

The Hospital Insurance Commission, a private insurance

company, or an employer plan reimburses the hospital for

services provided. Benefits include inpatient and outpatient

services, including room and board; nursing, laboratory,

ambulance, and resident doctor services; drugs; appliances;

surgery; maternity care; and physical therapy. There is no limit

to duration.

Dependents’ Medical Benefits

The Hospital Insurance Commission, a private insurance

company, or an employer plan reimburses the hospital for

services provided. Benefits include inpatient and outpatient

services, including room and board; nursing, laboratory,
46 ♦ SSPTW: The Americas, 2003

Bermuda

ambulance, and resident doctor services; drugs; appliances;

surgery; maternity care; and physical therapy. There is no limit

to duration.

Administrative Organization

Ministry of Finance, through the Department of Social

Insurance, provides general supervision.

Hospital Insurance Commission administers the program.

Work Injury

Regulatory Framework

First and current law: 1965 (workmen’s compensation).

Type of program: Employer-liability system. (The

government may require employers to carry insurance.)

Note: This information is from 1999.

Coverage

Employed persons and apprentices aged 16 or older.

Exclusions: Casual labor, part-time workers, temporary

employees, students, and voluntary workers.

Source of Funds

Insured person: None.

Employer: Total cost, met through the direct provision of

benefits or the purchase of insurance premiums.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period,

but the work injury must last more than 3 days.

Temporary Disability Benefits

50% of lost earnings (up to a maximum of B$170 a week) or a

lump sum. The total benefit paid out may not exceed the

permanent disability grant for which the insured would be

eligible.

Permanent Disability Benefits

If totally disabled, 4 years’ earnings.

The minimum benefit is B$5,500.

The maximum benefit is B$53,000.

Constant-attendance supplement: 25% of the permanent

disability benefit.

Partial disability: A percentage of the full disability benefit

proportional to the loss of earning capacity.

Workers’ Medical Benefits

Benefits include the cost of necessary medical care, including

hospitalization (up to a maximum based on the prevailing

public ward charge for 56 days); emergency outpatient

treatment; surgery, according to a fee schedule; medical

expenses, including the cost of nursing, ambulances, and

medicines, up to B$1,000; the cost of prostheses up to B$2,000;

and the cost of transportation up to B$250.

Survivor Benefits

Survivor benefit: A lump sum equal to 3 years’ earnings or

B$42,000 (whichever is less), minus any permanent disability

benefit payments. The benefit is payable to dependents who

were totally dependent on the insured’s earnings.

Partial survivor grant: A grant is paid to those who were

partially dependent on the insured’s earnings.

Funeral grant and medical expenses: Up to B$2,000 is

provided if there are no dependents.

Administrative Organization

Ministry of Labor provides general supervision.

Supreme Court administers lump sums.

Courts supervise the agreement between an employer and the

insured on the amounts payable.
SSPTW: The Americas, 2003 ♦ 47

Bolivia

Bolivia

Exchange rate: U.S.$1.00 equals

7.62 bolivianos (Bs).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1956, implemented in 1959.

Current law: 1996 (pensions), implemented in 1997.

Type of program: Mandatory private insurance system.

Notes: In 1997, all active members of the social insurance

system transferred to a system of mandatory individual

accounts. Contributions made under the old system are

recognized and paid as part of the pension. Only those active

members who were already eligible for a social insurance

pension are able to retire under the old system.

All residents aged 65 or older receive an annual social

assistance cash benefit under the Bonosol program.

This information is from 1999.

Coverage

All workers.

Voluntary coverage for the self-employed.

Source of Funds

Insured person: 10% of earnings for old age, plus an

additional amount for disability and survivor insurance and

administrative fees.

Employer: 2% of payroll for disability insurance.

Government: Social insurance and social assistance

pensions.

The maximum earnings for contribution purposes are 60 times

the national minimum wage.

Qualifying Conditions

Old-age pension: Age 65 or when the accumulated capital in

the individual account, plus accrued interest, is equal to at

least 70% of the last 5 years’ average covered earnings.

Disability pension: Younger than age 65 with between

18 months and 5 years of contributions.

Survivor pension: The deceased was insured.

Old-Age Benefits

Old-age pension: The insured’s accumulated capital

(contributions plus accrued interest) is used to purchase a

fixed or variable annuity.

There is no guaranteed minimum pension.

Permanent Disability Benefits

Disability pension: 70% of average salary during the last

5 years. If the contributions period is between 18 months and

5 years, the benefit is based on the average salary of the last

12 months.

An additional 10% of the last monthly salary is placed in the

old-age pension account of a disabled employee who is

younger than age 65 and who has at least 18 months of

contributions in the last 36 months.

The benefit is payable until age 65 when eligibility for the oldage pension begins.

Survivor Benefits

Survivor pension: The insured’s accumulated capital in the

individual account is payable to a spouse, dependents,

parents, or siblings.

The minimum pension is 70% of average earnings in the last

5 years, with at least 18 months of contributions during the last

5 years.

Widow’s pension: 80% of the insured’s pension.

Orphan’s pension: 20% of the insured’s pension to each

dependent child.

Funeral grant: Bs1,100.

Administrative Organization

System of Financial Regulation provides financial supervision

of program.

Superintendent of Pensions administers the program.

Insurance companies pay benefits.

Sickness and Maternity

Regulatory Framework

First law: 1949.

Current laws: 1987, 1988, and 1998.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

All workers. (Health insurance coverage for those over

age 60.)

Voluntary coverage for the self-employed.

Source of Funds

Insured person: None. (Pensioners contribute 5% of the

pension.)

Employer: 10% of payroll.
48 ♦ SSPTW: The Americas, 2003

Bolivia

Government: None.

All of the above contributions also finance temporary work

injury benefits.

Qualifying Conditions

Cash sickness benefits: Two contributions before the onset

of incapacity.

Maternity benefits: Four months of contributions before the

start of pregnancy for cash and medical benefits.

Medical benefits: One month of contributions in the

preceding 2 months.

Sickness and Maternity Benefits

Sickness benefit: 75% of earnings, payable after a 3-day

waiting period for up to 26 weeks; may be extended to

52 weeks if continuing medical care will prevent permanent

disability.

Maternity benefit: 95% of earnings, payable for up to 45 days

before and 45 days after the expected date of childbirth to an

insured women or the insured’s spouse.

Nursing and prenatal allowances: See Family Allowances,

below.

Workers’ Medical Benefits

Medical benefits include general, specialist, and preventive

care; diagnostic services; surgery; hospitalization; and

medicines.

Dependents’ Medical Benefits

Medical benefits include general, specialist, and preventive

care; diagnostic services; surgery; hospitalization; and

medicines.

Administrative Organization

National Health Fund administers the program.

Work Injury

Regulatory Framework

First law: 1924.

Current laws: 1987 and 1996, implemented in 1997.

Type of program: Social insurance system.

Coverage

All workers.

Source of Funds

Insured person: None.

Employer: 2% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The benefit is payable as cash sickness benefit under Sickness

and Maternity, above.

Permanent Disability Benefits

Permanent disability pension: 70% of the average salary

during the last 5 years. If the assessed degree of disability is

25% or greater, the monthly benefit is equal to the insured’s

base salary times the assessed degree of disability.

Partial disability: For an assessed degree of disability of

between 10% and 25%, a lump sum is paid.

Workers’ Medical Benefits

Benefits include necessary medical and surgical care,

hospitalization, medicines, appliances, and rehabilitation.

Survivor Benefits

Survivor pension: The minimum pension is 70% of average

earnings in the last 5 years, with at least 18 months of

contributions during the last 5 years.

Widow’s pension: 80% of the insured’s pension.

Orphan’s pension: 20% of the insured’s pension to each

dependent child.

Funeral grant: Bs1,100.

Administrative Organization

Medical benefits: National Health Fund administers the

program.

Disability and survivors benefits: Superintendent of

Pensions administers the program.

Unemployment

Regulatory Framework

Labor law requires employers to grant severance pay to

dismissed employees. Unemployed workers receive medical

and maternity benefits for 2 months following dismissal.
SSPTW: The Americas, 2003 ♦ 49

Bolivia

Family Allowances

Regulatory Framework

First law: 1953.

Current laws: 1956, implemented in 1959; and 1987.

Type of program: Employment-related system.

Coverage

All workers.

Special systems for bank employees, military personnel,

drivers, miners, railroad employees, petroleum workers, and

other groups of worker.

Source of Funds

Insured person: None.

Employer: Total cost.

Government: None.

Qualifying Conditions

Family allowances: Child must be between age 1 (when the

nursing allowance ceases) and age 19 (no limit if disabled).

Housing allowances are payable to married couples and single

persons, with or without children. The family head must be

currently working more than 15 days a month.

Family Allowance Benefits

Family allowances: A monthly allowance for each child.

Housing allowance: Provided to single and married workers.

Prenatal grant: Milk and a cash benefit from the fifth month

of pregnancy.

Birth grant: One national monthly minimum wage for each

birth.

Nursing allowance: Monthly milk allowance for each child for

the 12-month period following birth (paid in kind).

Burial allowance: One national monthly minimum wage for

each child under age 19.

Administrative Organization

Ministry of Housing and Economic Development provides

general supervision.

National Secretariat of Pensions, through the National Institute

of Pensions, administers the program.

Employers pay allowances for single and married adults

directly to their employees.
50 ♦ SSPTW: The Americas, 2003

Brazil

Brazil

Exchange rate: U.S.$1.00 equals 2.96 reais.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1923 (railroads), 1934 (commerce), and 1936

(industry).

Current laws: 1991 and 1999.

Type of program: Dual social insurance and social assistance

system.

Coverage

Social insurance: Employed persons in industry, commerce,

and agriculture; domestic servants; some categories of casual

worker; and the self-employed.

Voluntary insurance is possible for students, housewives, the

unemployed, and other categories.

Special systems for public-sector employees and military

personnel.

Social assistance: Needy elderly or disabled persons.

Separate schemes for rural and urban citizens.

Source of Funds

Social insurance

Insured person: 7.65%, 8.65%, 9%, or 11% of earnings

according to four earnings categories, up to a maximum. The

self-employed contribute 20% of earnings, up to a maximum.

Employer: 20% of payroll.

Government: Earmarked taxes are used to finance

administrative costs and defray deficits.

The minimum earnings for contribution purposes are equal to

the minimum monthly wage (240 reais in June 2003).

The maximum earnings for contribution purposes are 7.79 times

the minimum salary for each earnings category.

All of the above contributions also finance sickness and

maternity benefits and family allowances.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost, including revenue from earmarked

taxes.

Qualifying Conditions

Old-age pension

Age pension (social insurance): Age 65 (men) or age 60

(women) for employees and the urban self-employed; age 60

(men) or age 55 (women) for the rural self-employed.

Contributory pension (social insurance): At least 35 years of

contributions (men) or 30 years of contributions (women). For

arduous employment, the coverage period is between 15 years

and 25 years with at least 180 months of contributions.

Insured persons who entered the system up until 1988 are

subject to transition rules.

The pension is payable abroad if there is a reciprocal

agreement.

Old-age assistance (means-tested): Age 67 (age 65

beginning in 2004) with family earnings less than 25% of the

minimum wage for each person.

Disability pension (social insurance): Twelve months of

contributions and permanent incapacity for work. The

contribution period is waived if the disability results from an

accident or a disease specified by law.

Disability assistance (means-tested): Assessed as disabled

with family earnings less than 25% of the minimum wage for

each person.

Survivor pension (social insurance): The insured was a

pensioner or had paid contributions in the 12 months before

death.

Old-Age Benefits

Old-age pension

Age pension (social insurance): 70% of average indexed

earnings, plus 1% of average earnings for each year of

contributions.

The maximum pension is 100% of average income.

Contributory pension (social insurance): Average earnings

with between 30 years and 35 years of contributions.

The minimum pension is 100% of the minimum wage (240 reais

in June 2003).

The maximum pension is 1,869.34 reais (June 2003).

Schedule of payments: Thirteen payments a year.

Benefit adjustment: Age and contributory pensions are

adjusted annually according to changes in retail prices.

Old-age assistance (means-tested): The average allowance

is equal to the minimum wage.

Benefit adjustment: Pensions are indexed to changes in the

minimum salary for the following month.

Permanent Disability Benefits

Disability pension (social insurance): 100% of indexed

earnings in the last 36 months before the onset of disability.
SSPTW: The Americas, 2003 ♦ 51

Brazil

The minimum benefit is 100% of the minimum wage (240 reais in

June 2003).

Constant-attendance allowance: 25% of the disability pension.

Schedule of payments: Thirteen payments a year.

Benefit adjustment: Benefits are adjusted annually according

to changes in retail prices.

Disability assistance (means-tested): The average pension

is equal to the minimum wage.

Benefit adjustment: Pensions are indexed to changes in the

minimum salary for the following month.

Survivor Benefits

Survivor pension (social insurance): 100% of the pension

paid or payable to the insured or 100% of average indexed

earnings during the 36 months prior to the insured’s death,

regardless of the number of eligible survivors. The pension is

divided equally among eligible survivors.

Eligible survivors (in order of priority): Widow(er), companion,

children under age 21 or disabled, stepchildren and dependent

minors, parents, and unmarried brothers and sisters under

age 21 or disabled.

The minimum pension is 100% of the minimum wage (240 reais

in June 2003).

The maximum pension is 1,869.34 reais (June 2003).

Schedule of payments: Thirteen payments a year.

Benefit adjustment: Pensions are adjusted annually according

to changes in retail prices.

Administrative Organization

Ministry of Social Insurance provides general supervision.

National Social Security Institute administers benefits.

Sickness and Maternity

Regulatory Framework

First laws: 1923 (railroads), 1934 (commerce), and 1936

(industry).

Current laws: 1990 (medical benefits), 1991 (sickness and

medical benefits), and 1991 and 1999 (maternity benefits).

Type of program: Social insurance (cash benefits) and basic

universal system (medical benefits).

Coverage

Employed persons in industry, commerce, and agriculture;

domestic servants; the self-employed; and certain categories

of casual worker.

Voluntary coverage is possible for students, housewives, the

unemployed, and other groups.

Special systems for public-sector employees.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: The cost of medical benefits.

Qualifying Conditions

The insured contributed during the last 12 months. There is no

minimum qualifying period for cash maternity benefits.

Sickness and Maternity Benefits

Sickness benefit: 91% of average earnings. The benefit is

payable after a 15-day waiting period (during which the

employer is required to pay 100% of the wage).

Schedule of payments: Thirteen payments a year if the insured

is entitled to a sickness benefit for more than 15 days.

The minimum benefit is 100% of the minimum wage (240 reais in

June 2003).

Maternity benefit: 100% of the wage for 120 days, payable

28 days before and 91 days after the expected date of

childbirth; benefit is paid for 2 weeks in the case of a

miscarriage.

Workers’ Medical Benefits

Medical services are provided directly to patients in rural and

urban areas. Benefits include general, specialist, maternity, and

dental care; hospitalization; medicines (some cost sharing is

required); and necessary transportation. There is no limit to

duration.

Dependents’ Medical Benefits

Medical services are provided directly to patients in rural and

urban areas. Benefits include general, specialist, maternity, and

dental care; hospitalization; medicines (some cost sharing is

required); and necessary transportation. There is no limit to

duration.

Administrative Organization

Ministry of Health provides general supervision of the Unified

System of Health.

Unified System of Health administers medical benefits.

Ministry of Social Insurance provides general supervision of

the National Social Security Institute.

National Social Security Institute administers cash benefits.
52 ♦ SSPTW: The Americas, 2003

Brazil

Work Injury

Regulatory Framework

First laws: 1919, 1944, and 1967.

Current law: 1991.

Type of program: Social insurance system.

Coverage

Employed persons.

Special systems for public-sector employees and the military.

Source of Funds

Insured person: None.

Employer: Total cost, met through premiums of 1% to 3% of

payroll according to the assessed degree of risk.

Government: None.

The maximum earnings for contribution purposes is the sum of

all earnings of all employees for each particular employer.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Permanent disability: Total loss of capacity to work.

Accident benefit (partial disability): Incapable of usual work

but capable of doing some other kinds of work.

Temporary Disability Benefits

91% of average earnings. The benefit is payable after a 15-day

waiting period (during which the labor law requires the

employer to pay 100% of the wage).

Schedule of payments: Thirteen payments a year.

Permanent Disability Benefits

Permanent disability pension: 100% of insured earnings.

The maximum pension is 1,869.34 reais.

Constant-attendance supplement: 25% of the pension (no

maximum if self-employed).

Schedule of payments: Thirteen payments a year.

Accident benefit (partial disability): 50% of the full pension.

Schedule of payments: Thirteen payments a year.

Workers’ Medical Benefits

Medical and dental treatment, hospital treatment, medicines,

rehabilitation, and transportation.

Survivor Benefits

Survivor pension: 100% of the insured’s covered earnings on

the day of the accident. The pension is divided equally among

eligible survivors.

The maximum pension is 1,869.34 reais.

Eligible survivors (in order of priority): Widow(er), companion,

children under age 21 or disabled, stepchildren and dependent

minors, parents, and unmarried brothers and sisters under

age 21 or disabled.

Schedule of payments: Thirteen payments a year.

Administrative Organization

Ministry of Health provides general supervision of the Unified

System of Health.

Unified System of Health administers medical benefits.

Ministry of Social Insurance provides general supervision of

the National Social Security Institute.

National Social Security Institute administers cash benefits.

Unemployment

Regulatory Framework

First laws: 1965 (compulsory savings program from the

length-of-service guarantee fund, or FGTS) and 1986

(unemployment insurance).

Current laws: 1990 and 1994.

Type of program: Social insurance system.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: None. (Employers contribute 8% of earnings to

individual FGTS savings accounts to which the insured has

access in the event of unemployment, marriage, retirement, and

other contingencies.)

Government: Total cost is financed by earmarked taxes.

Qualifying Conditions

Unemployment benefit: The benefit varies according to

whether the insured has 6 months to 11 months of coverage,

12 months to 23 months of coverage, or 24 or more months of

coverage. Unemployment must not be due to misconduct.

The insured must lack other resources to support self or family.
SSPTW: The Americas, 2003 ♦ 53

Brazil

Unemployment Benefits

Unemployment benefit (means-tested): 50% of average

earnings in the last 3 months of employment, up to three times

the minimum wage. The benefit is payable after a 60-day

waiting period for 4 months in any 16-month period.

The minimum benefit is 100% of the minimum wage.

Administrative Organization

Ministry of Labor and Employment provides general

supervision.

Worker Assistance Fund Advisory Council administers the

program.

Family Allowances

Regulatory Framework

First law: 1941 (large families).

Current law: 1999.

Type of program: Employment-related system.

Coverage

Low-income employees with one or more children (excludes

domestic employees).

Source of Funds

Insured person: None.

Employer: None. (Benefits are paid directly by the employer.)

Government: Total cost. (Reimburses employers for the total

cost of benefits paid to employees.)

Qualifying Conditions

Family allowances: Employees with income up to 560.81 reais

(June 2003). The child must be under age 14 or disabled and

attending school. The parent must be currently in insured

employment, a pensioner, or receiving sickness benefit. The

allowance is payable to both parents if both are insured.

Family Allowance Benefits

Family allowances: 13.48 reais a month for each child.

Administrative Organization

Ministry of Social Insurance provides general supervision.

National Social Security Institute administers benefits for oldage or disability pension recipients.

Employers pay benefits to their own employees.
54 ♦ SSPTW: The Americas, 2003

British Virgin Islands

British Virgin Islands

Exchange rate: Uses the U.S. dollar (U.S.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1979.

Current law: 1993.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons aged 16 to 65.

Source of Funds

Insured person: 3.25% of earnings; the self-employed

contribute 6.5%.

Employer: 3.25% of covered wages.

Government: None.

The maximum annual earnings for contribution and benefit

purposes are U.S.$23,400.

Qualifying Conditions

Old-age pension: Age 65 with 500 weeks of contributions.

Partial pension: A reduced pension is payable with between 51

and 499 weeks of contributions.

Old-age grant: Age 65 with at least 50 weeks of contributions

and ineligible for any periodic benefit.

Disability pension: Under age 65 with 500 weeks of

contributions and permanently incapable of any work.

Disability grant: Under age 65 with at least 50 weeks of

contributions, ineligible for any periodic benefit, and

permanently incapable of any work.

Survivor pension: A widow(er) aged 40 or caring for a child

under age 15 (age 21 if a student).

Funeral grant: For the death of an insured person or his or

her dependents.

Old-Age Benefits

Old-age pension: 30% of average covered earnings in the

best 3 consecutive years, plus 1% of average covered earnings

for every 50-week period of contributions above 500 weeks.

Partial pension: The full pension is reduced in proportion to

the total number of weeks of contributions.

Old-age grant: Six times average weekly earnings for every

50-week period of contributions above 50 weeks and below

500 weeks.

Permanent Disability Benefits

Disability pension: 30% of average covered earnings in the

best 3 consecutive years, plus 1% of average covered earnings

for every 50-week period of contributions above 500 weeks.

Disability grant: Six times average weekly earnings for every

50-week period of contributions above 50 weeks and below

500 weeks.

Survivor Benefits

Survivor pension: Widow(er)s receive 66.6% of the insured’s

pension or prospective pension.

Orphan’s pension: 33.3% of the widow(er)’s pension; 66.6% if

a full orphan.

Funeral grant: The grant depends on the age of the person at

death. For a child under age 1, U.S.$300; for a child aged 1 to

15, U.S.$1,200; for persons aged 16 or older, U.S.$2,000.

Administrative Organization

Chief Minister’s Office provides general supervision.

Social Security Board administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1979.

Current law: 1993.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed and self-employed persons aged 16 to 65.

Source of Funds

Insured person: 0.75% of covered earnings; the self-employed

contribute 1.5%.

Employer: 0.75% of covered wages.

Government: None.

Qualifying Conditions

Cash sickness benefits: Twenty-six weeks of contributions,

with 8 weeks of contributions in the 13 weeks before the onset

of illness.

Cash maternity benefits: Twenty-six weeks of contributions,

with 20 weeks of contributions in the 39 weeks before the

expected date of childbirth.

Maternity grant: The wife of an insured worker.
SSPTW: The Americas, 2003 ♦ 55

British Virgin Islands

Sickness and Maternity Benefits

Sickness benefit: 66.6% of average weekly covered earnings,

payable for up to 26 weeks.

Maternity benefit: 66.6% of average weekly covered earnings

in the 39 weeks prior to the expected date of childbirth. The

benefit is payable for up to 13 weeks, beginning no earlier than

6 weeks before the expected date of childbirth.

Maternity grant: A lump sum of U.S.$200.

Workers’ Medical Benefits

No statutory benefits are provided.

Dependents’ Medical Benefits

No statutory benefits are provided.

Administrative Organization

Chief Minister’s Office provides general supervision.

Social Security Board administers the program.

Work Injury

Regulatory Framework

First and current law: 1994.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons aged 16 to 65.

Source of Funds

Insured person: None; the self-employed contribute 0.5% of

earnings.

Employer: 0.5% of covered wages.

Government: None.

The maximum earnings for employer contribution purposes are

U.S.$23,400.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Temporary disability pension: 75% of average weekly

covered earnings, payable for up to 26 weeks.

Permanent Disability Benefits

Permanent disability pension: 75% of average weekly

covered earnings is payable for up to 26 weeks if the assessed

degree of permanent disability is 100%.

Partial disability: The pension is proportionately reduced for

an assessed degree of disability of 30% to 99%.

A lump-sum grant is paid for an assessed degree of disability

of at least 1% up to 29%.

Workers’ Medical Benefits

Benefits include hospitalization; general, specialist, and

nursing care; medicines; transportation; and artificial limbs.

Survivor Benefits

Survivor pension: The maximum survivor pension is 75% of

the insured’s pension or prospective pension. The widow(er)

receives half of this amount.

Other eligible survivors: Half of the maximum survivor

pension is divided equally among other survivors.

Funeral grant: A lump sum of U.S.$2,000.

Administrative Organization

Chief Minister’s Office provides general supervision.

Social Security Board administers the program.
56 ♦ SSPTW: The Americas, 2003

Canada

Canada

Exchange rate: U.S.$1.00 equals

1.37 Canadian dollars (C$).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1927 (old-age assistance), 1937 (blind assistance),

and 1955 (disability assistance).

Current laws: 1951 and 1952 (universal pension), 1965 and

1966 (earnings-related pension), and 1966 and 1967 (incometested supplement).

Type of program: Dual universal pension and social

insurance system.

Coverage

Universal pension (old-age security): All residents.

Earnings-related pension (Canada Pension Plan/Quebec

Pension Plan): All employees working in Canada and all selfemployed persons residing in Canada.

Exclusions: Those in casual employment (annual earnings less

than C$3,500) or in seasonal agricultural employment.

A province may opt out of the federal earnings-related Canada

Pension Plan if it establishes a comparable program. This is

the case with the Quebec Pension Plan; benefits are portable

between the two plans.

Source of Funds

Universal pension

Insured person: None.

Employer: None.

Government: Total cost, including the total cost of incometested benefits.

Earnings-related pension

Insured person: 4.95% of earnings (employees) or 9.9% of

earnings (self-employed).

Employer: 4.95% of employee’s earnings.

Government: None.

The minimum annual earnings for benefit and contribution

purposes are C$3,500.

The maximum annual earnings for benefit and contribution

purposes are C$39,900.

Earnings limit adjustment: Adjusted annually according to

increases in the average industrial wage.

Qualifying Conditions

Old-age pension

Universal pension: Age 65 and 10 years of residence in

Canada after age 18. Retirement is not necessary. The pension

is payable abroad if the beneficiary resided in Canada for

20 years after age 18.

Earnings-related retirement pension: Age 60 with at least

1 year of contributions. If the pension is awarded before

age 65, the insured person must have fully or substantially

ceased employment. If the pension is awarded at age 65 or

older, retirement is not necessary. The pension is payable

abroad.

Disability pension

Earnings-related disability pension: Severe and prolonged

incapacity for any gainful activity with contributions in 4 of the

last 6 years. (The Quebec Pension Plan normally requires

contributions in half the years in which contributions could

have been made; the minimum contribution period is 2 of the

last 3 years.) The pension is payable abroad.

Survivor pension

Universal pension: Income-tested benefit is available to

widows and widowers aged 60 to 64. The survivor must be a

resident of Canada and have resided in Canada for 10 years

after age 18. The universal survivor pension is replaced by the

universal old-age pension at age 65.

Earnings-related pension: The insured had made

contributions during the lesser of 10 years or one-third of the

years in which contributions could have been made; the

minimum contribution period is 3 years. The pension is

payable abroad.

Spouse and widow(er) include legally married persons and

common-law partners (including same-sex partners).

Old-Age Benefits

Old-age pension

Universal pension: The maximum monthly pension is

C$461.55. The pension is calculated as 1/40th of the maximum

pension for each year of residence in Canada after age 18. The

pension of high-income earners is subject to recovery (15% of

annual income over C$57,879).

Income-tested supplement: The supplement increases the

maximum universal pension to C$1,010.08 for a single person or

to C$1,637.70 for a couple.

Income-tested allowance: Up to a maximum of C$818.85 a

month for a pensioner’s spouse between ages 60 and 64.

Earnings-related retirement pension: 25% of average

adjusted yearly covered earnings. 15% of the years with the

lowest income are disregarded; years in which the insured was

caring for a child under age 7 may also be disregarded if it is in

the insured’s favor.
SSPTW: The Americas, 2003 ♦ 57

Canada

The pension is reduced by 0.5% a month if awarded at any age

after 60 but before 65.

The pension is increased by 0.5% a month if awarded after

age 65 but before age 70.

The maximum monthly pension is C$801.25.

Pension credits accumulated by spouses or common-law

partners (including same-sex partners) during marriage or

cohabitation may be divided equally in case of divorce or

separation.

Recorded earnings are adjusted for changes in national

average wages.

Benefit adjustment: Automatic adjustments for changes in the

consumer price index are implemented quarterly for the

universal pension and annually for the earnings-related

pension.

Permanent Disability Benefits

Earnings-related disability pension: A basic monthly

pension of C$370.32, plus 75% of the earnings-related

retirement pension.

The maximum monthly pension is C$971.26.

Recorded earnings are adjusted for changes in national

average wages.

Child’s supplement: C$186.71 a month for each child below

age 18; age 25 if a student. (Quebec Pension Plan: C$59.28 for

each child below age 18 only.)

Benefit adjustment: Automatic annual adjustment of all

benefits for changes in the consumer price index.

Survivor Benefits

Survivor pension

Universal pension (income-tested): For a widow(er) aged 60

to 64.

The maximum monthly pension is C$904.03.

The survivor pension is replaced by the universal old-age

pension at age 65.

Earnings-related pension: A surviving spouse aged 65 or

older receives 60% of the insured’s earnings-related retirement

pension, up to a maximum of C$480.75 a month. (Quebec

Pension Plan: The provision is the same for a surviving

spouse aged 65 or older.)

A surviving spouse younger than age 65 receives 37.5% of the

insured’s earnings-related retirement pension plus C$144.49, up

to a maximum of C$444.96 a month. (Quebec Pension Plan: A

surviving spouse aged 55 to 64 receives up to a maximum of

C$700.06 a month; aged 45 to 54, up to a maximum of C$670.76

a month. For a surviving spouse who is under age 45 and

disabled, the maximum is C$670.76 a month; if not disabled but

caring for a dependent child, up to a maximum of C$644.28; if

not disabled and with no dependent children, up to a maximum

of C$395.31.)

Orphan’s pension: C$186.71 a month for each child below

age 18; age 25 if a student. (Quebec Pension Plan: C$59.28 for

each child below age 18 only.)

Death benefit: Six months’ earnings-related retirement pension,

up to a maximum of C$2,500.

Benefit adjustment: Automatic annual adjustment of earningsrelated pensions for changes in the consumer price index.

Administrative Organization

Department of Human Resources Development, through

district and local offices, administers the universal and

earnings-related pensions and income-tested supplements.

Canada Customs and Revenue Agency is responsible for

collecting contributions for the earnings-related pensions.

Quebec Department of Revenue and Quebec Pension Board

administer the earnings-related pension plan in Quebec.

Sickness and Maternity

Regulatory Framework

Cash benefits

First and current law: 1996 (employment insurance).

Physician and hospital services

First law: 1965.

Current law: 1984 (health).

Type of program: Social insurance (cash benefits) and

universal system (physician and hospital services).

Coverage

Cash benefits: All wage and salary earners, including federal

government employees; also, self-employed fishermen.

Provincial government employees may be covered with the

consent of provincial government.

Exclusions: Self-employed persons other than fishermen.

Physician and hospital services: All residents satisfying

federal and provincial criteria for eligibility and insured status.

(Virtually the total population is covered.) Coverage is

portable from province to province and for emergency care

anywhere in the world. In the latter case, payment is limited to

the rate payable in the person’s home province.

Special provisions for certain groups, including members of the

armed forces.

Source of Funds

Insured person

Cash benefits: See source of funds under Unemployment,

below.

Physician and hospital benefits: Premiums are paid in Alberta

and British Columbia. Ontario has a “fair share health care
58 ♦ SSPTW: The Americas, 2003

Canada

levy,” which varies from 0.2% to 2.0% of taxable income. None

in the other provinces.

Employer

Cash benefits: See source of funds under Unemployment,

below.

Physician and hospital benefits: Contributions vary by

province from 1% to 4.5%.

Government

Cash Benefits: None.

Physician and hospital benefits: Most of the cost is met from

federal, provincial, and territorial general revenues. Federal

government makes contributions to provinces and territories

through block transfers, part of which are conditional on

provinces and territories meeting federal program requirements

as set out in the Canada Health Act.

Qualifying Conditions

Cash sickness and maternity benefits: The qualifying

conditions vary from 420 hours to 700 hours of covered

employment during the last year.

Medical and hospitalization benefits: Generally, 3 months’

residence in the province is required to be insured. When the

insured moves from one province to another, the former

province continues to provide insurance coverage during the

waiting period.

In Alberta and British Columbia, the payment of premiums is an

additional condition, but such payment is not linked to

entitlement to services.

Sickness and Maternity Benefits

Sickness benefit: 55% of previous average insured earnings,

plus a family supplement for low-income and modest-income

earners with dependent children. The supplement is awarded

for annual income less than C$25,921. The benefit is paid after

a 2-week waiting period for up to 45 weeks.

The maximum weekly benefit is C$413.

Maternity benefit: 55% of previous average insured earnings,

plus a family supplement for low-income and modest-income

earners with dependent children. The supplement is awarded

for annual income less than C$25,921. The benefit is paid for

up to 15 weeks, plus up to 35 additional weeks for parental care

(the mother, father or both) on the birth or adoption of a child.

The maximum weekly benefit is C$413.

Workers’ Medical Benefits

Medical benefits: Benefits include general medical and

maternity care; surgical, specialist, and laboratory services.

Benefits are paid directly by provincial authorities according to

predetermined formulas and agreed-upon fee schedules.

Hospital benefits: Benefits include standard ward care,

necessary nursing, pharmaceuticals provided in hospital, and

diagnostic and therapeutic services. Benefits are paid directly

by provincial authorities according to predetermined formulas

and agreed-upon fee schedules.

Other benefits include oral surgery if required and performed in

an approved hospital and, in some provinces, services of

osteopaths, chiropractors, optometrists; dental care for

children; prosthetics; and prescribed drugs. Some cost

sharing may be required in such cases.

In some provinces, welfare recipients and persons over age 65

are eligible for free drugs, eyeglasses, subsidized nursinghome care, and dental care for children.

Dependents’ Medical Benefits

Medical benefits: Benefits include surgical, specialist, and

laboratory services; general medical and maternity care.

Benefits are paid directly by provincial authorities according to

predetermined formulas and agreed-upon fee schedules.

Hospital benefits for dependents: Benefits include standard

ward care, necessary nursing, pharmaceuticals provided in

hospital, and diagnostic and therapeutic services. Benefits are

paid directly by provincial authorities according to

predetermined formulas and agreed-upon fee schedules.

Other benefits include oral surgery if required and performed in

an approved hospital and, in some provinces, services of

osteopaths, chiropractors, optometrists; dental care for

children; prosthetics; and prescribed drugs. Some cost

sharing may be required in such cases.

Administrative Organization

Health Canada administers programs for groups not covered

under provincial plans, monitors provincial compliance with

conditions of national legislation, and provides provinces with

technical, consultative, and coordinating services.

Provincial authorities administer their health insurance plans,

establish resident eligibility status, assess hospital and medical

claims, pay providers, and monitor all aspects of programs.

Quebec Pension Board administers the program in Quebec.

Providers are usually public, not-for-profit hospitals, and other

specialized institutions; doctors and allied practitioners in

entrepreneurial practice.

Work Injury

Regulatory Framework

First and current laws: 1908 and 1994 (Newfoundland), 1915

and 1996 (Nova Scotia), 1915 and 1996 (Ontario), 1916 and 1993

(British Columbia), 1916 and 1993 (Manitoba), 1918 and 1994

(New Brunswick), 1918 and 1995 (Alberta), 1928 and 1994

(Quebec), 1930 and 1994 (Saskatchewan), 1949 and 1995 (Prince

Edward Island), 1974 and 1992 (Northwest Territories/

Nunavut), and 1993 (Yukon).

Type of program: Social insurance system.
SSPTW: The Americas, 2003 ♦ 59

Canada

Coverage

Employees in industry and commerce (some differences exist

among provinces).

Common exclusions: Domestic workers, professional athletes,

and members of sports clubs.

Special systems for merchant seamen and federal civil

servants.

Source of Funds

Insured person: None.

Employer: Total cost, met through contributions varying by

industry and according to the assessed degree of risk (large

firms in some provinces may self-insure).

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

The benefit varies from 75% to 90% of gross earnings,

according to province.

The minimum varies from zero up to C$403.03 a week,

according to province.

Permanent Disability Benefits

Permanent disability pension: In most provinces, the benefit

is either 75% or 90% of the insured’s earnings for full disability.

The maximum pension varies from C$454.44 to C$897.54 a week,

according to province. Some provinces provide lump-sum

payments.

Partial disability: The pension is in proportion to the full

benefit according to the assessed degree of loss of earning

capacity (in some cases, the pension is converted to a lump

sum if the assessed degree of loss is 10% or less).

Workers’ Medical Benefits

Benefits in all provinces include medical, surgical, nursing, and

hospital services; medicines; and appliances.

Survivor Benefits

Survivor pension: The pension varies according to province.

The pension is payable to a widow(er).

Orphan’s pension: Either a monthly flat-rate pension set

slightly higher than that for children residing with a parent or a

percentage of the insured’s wages, according to province.

Other dependents (if no spouse or orphan): A reasonable

sum in proportion to the loss of income.

Funeral grant: The grant varies according to province.

Administrative Organization

Workers’ Compensation Board, or a Work Safety Commission,

in each province and territory administers the program.

Unemployment

Regulatory Framework

First law: 1940.

Current law: 1996 (employment insurance), with amendments.

Type of program: Social insurance system.

Coverage

All wage and salary earners, including federal government

employees; also, self-employed fishermen.

Provincial government employees may be covered with the

consent of provincial government.

Exclusions: Self-employed persons other than fishermen.

Source of Funds

Insured person: 2.10% of earnings.

Employer: 2.94% of the insured’s wage.

Government: None.

The maximum annual earnings for contribution and benefit

purposes are C$39,000.

Qualifying Conditions

Unemployment benefit: The qualifying conditions vary from

420 hours to 700 hours of covered employment during the last

year, depending on the unemployment rate of the region.

The insured must be registered, able, willing, and available to

work and unable to obtain suitable employment, or unable to

work because of sickness, maternity, or providing parental

care.

If unemployment is due either to voluntary leaving without just

cause or to misconduct, the disqualification is indefinite and

applies until the insured requalifies for the benefit.

In the event of refusal of a suitable offer of employment or

failure to undergo training, the insured is disqualified for

between 7 and 12 weeks; if unemployment is due to a labor

dispute, imprisonment, or residence outside of Canada, the

insured is disqualified for as long as the condition exists.

Unemployment Benefits

55% of previous average insured earnings, plus a family

supplement for low-income and modest-income earners with

dependent children. The supplement is awarded for annual

income less than C$25,921. The benefit is payable after a 2-

week waiting period for up to 45 weeks depending on the
60 ♦ SSPTW: The Americas, 2003

Canada

claimant’s employment history and regional unemployment

rates.

The maximum weekly benefit is C$413.

Administrative Organization

Human Resources Development Canada, through its regional

and local offices, administers the program.

Canada Customs and Revenue Agency is responsible for

collecting contributions.

Family Allowances

Regulatory Framework

First law: 1944.

Current law: 1998.

Type of program: Social assistance system.

Coverage

All residents.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

A child must be under age 18 and a resident of Canada for

income tax purposes.

Family Allowance Benefits

Child tax benefit (income-tested): The benefit is delivered

through the income tax system.

The maximum annual benefit is C$2,632 for the first child,

C$2,423 for the second child, and C$2,427 for the third and

subsequent children.

Additional income-tested benefit: For children under age 7, up

to a maximum of C$232 a year.

Benefits are paid monthly and are based on total family income

during the previous year.

Administrative Organization

Canada Customs and Revenue Agency administers the

program in all of Canada except Quebec.

Quebec Pension Board administers the program in Quebec.
SSPTW: The Americas, 2003 ♦ 61

Chile

Chile

Exchange rate: U.S.$1.00 equals 711.80 pesos.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1924.

Current laws: 1952 (wage earners and salaried employees);

1980 and 1981 (new system).

Type of program: Mandatory private insurance and social

insurance system.

Note: A system of mandatory private individual accounts was

introduced in May 1981. Workers entering the labor force after

December 31, 1982, must join the new system. The social

insurance system is being phased out.

Coverage

Private insurance

Wage earners and salaried workers.

Voluntary coverage is possible for the self-employed.

Social insurance

Wage earners’ program: Wage earners and the self-employed.

Salaried employees’ program: Salaried employees in privatesector employment.

Special systems for railroad employees, seamen and port

workers, public-sector employees, the armed forces, and over

35 other occupations.

Source of Funds

Private insurance

Insured person: 10% of earnings for an old-age pension, plus

an additional amount for disability and survivor insurance and

administrative fees.

Employer: None, except 2% of salary for employees working

under arduous conditions.

Government: The cost of the guaranteed minimum pension.

The maximum monthly earnings for contribution purposes (old

and new systems) are 60 UFs (unidades de fomento). In

January 2003, one UF equaled 16,743.58 pesos. The value of

the UF for pension purposes is adjusted monthly to changes in

the consumer price index.

Social insurance

Insured person: Wage earners contribute 18.84% of wages;

salaried employees contribute 20.30% of salary.

Employer: None.

Government: Special subsidies as needed to finance the

program.

Qualifying Conditions

Private insurance

Old-age pension: Age 65 (men) or age 60 (women). Must

have 20 years of contributions to receive the minimum pension.

Retirement is permitted before the normal retirement age if the

pension equals at least 50% of the average wage over the last

10 years and is at least equal to 110% of the minimum old-age

pension.

Disability pension: The loss of 2/3 of working capacity.

Partial disability: The loss of between 50% and 66% of

working capacity.

Survivor pension: The insured was covered or was a

pensioner at the time of death.

Social insurance

Old-age pension: Wage earners must be age 65 with

1,040 weeks of contributions; or 800 weeks of contributions

including 50% of the weeks since initial coverage began (men)

or age 60 with 520 weeks of contributions (women). Salaried

employees must be age 65 with at least 10 years of

contributions (men) or age 60 with at least 10 years of

contributions (women).

Disability pension: Wage earners must be assessed as totally

or partially disabled and be younger than age 65 (men) or

younger than age 60 (women) at the onset of disability. A

minimum of 50 weeks’ contributions, including at least 40% in

the last 5 years and also 50% of the weeks since initial

coverage began (women are excused from this last requirement

as are men with at least 400 weeks of coverage). Salaried

employees must be assessed as 2/3 disabled with 3 years of

contributions.

Survivor pension: The wage earner was a pensioner or had

50 weeks of paid coverage that must span at least 50% of the

period of enrollment, of which at least 40% was in the last

5 years. (These requirements do not apply to persons with at

least 400 weeks of insurance.) The salaried employee was a

pensioner or had at least 3 years’ contributions.

Old-Age Benefits

Private insurance

Old-age pension: The value of the pension is dependent on

the insured’s contributions plus accrued interest, minus

administrative fees. The insured’s contributions under the old

system are recognized as an indexed bond. At retirement, the

insured may make periodic withdrawals from the individual

account for the expected lifespan or buy an annuity from a

private insurance company, or a combination of the two.

Guaranteed minimum pension: 74,503.52 pesos if retired and

under age 70; 81,463.85 pesos if aged 70 or older.
62 ♦ SSPTW: The Americas, 2003

Chile

Social insurance

Old-age pension: Wage earners receive 50% of the base wage

(average monthly wages during the last 5 years, with the first

2 years adjusted for wage changes), plus 1% of wages for each

50-week period of contributions above 500 weeks.

The minimum pension is set by law.

The maximum pension is 70% of the base wage, plus an

increment of 10% for each 150-week period of contributions

made after the award of the pension.

Salaried employees receive 1/35 of the base salary times the

number of years of contributions.

Salaried woman’s child supplement: A supplement of 1/35 of

the base salary is paid for each dependent child to a woman

with over 20 years of contributions; 2/35 of the base salary if a

widow.

The maximum pension is 100% of the base salary.

Benefit adjustment: Automatic annual adjustment of pensions

for changes in the price index.

Permanent Disability Benefits

Private insurance

Disability pension: Following an assessment and certification

by the medical committee, the AFP (individual pension fund

management company) finances a benefit for 3 years. The

benefit is equal to between 50% and 70% of the base salary in

the case of total disability; between 35% and 50% for a partial

disability.

Long-term pension: Following a second level of assessment

and certification, the pension is financed through the

individual account; same as for old-age, disability, and

survivors.

Guaranteed minimum pension: 74,503.52 pesos for a disabled

person under age 70; 81,463.85 pesos for a disabled person

aged 70 or older.

Social insurance

Disability pension: For total disability, wage earners receive

50% of the base wage (average monthly wages during the last

5 years, with the first 2 years adjusted for wage changes), plus

1% of wages for every 50-week period of contributions beyond

500 weeks.

The maximum pension is 70% of the base wage.

Partial disability: 50% of the total disability pension.

Salaried employees receive 70% of the base salary, plus 2% of

the salary for every year of contributions beyond 20 years.

The maximum pension is 100% of the base salary.

Benefit adjustment: Automatic annual adjustment of pensions

for changes in the price index.

Survivor Benefits

Private insurance

Survivor pension: A widow or a disabled widower receives

60% of the pension; 50% if the pension is also paid to children;

36% of the pension to the mother of natural children born

outside of marriage; 30% to the mother of natural children born

outside of marriage if the children are eligible for an orphan’s

pension; 15% of the pension for each orphan up to age 18

(age 25 if a student; no limit if disabled).

Other eligible survivors (in the absence of the above): 50% of

the pension to parents.

The total survivor pension must not exceed 100% of the

pension.

Social insurance

Survivor pension: For a wage earner’s widow of any age or a

disabled widower, 50% of the base wage or 100% of the

insured’s pension, whichever is higher. Each orphan under

age 15 (age 18 if a student; no limit if disabled) receives 20% of

the base wage or average pension in the preceding year. The

mother of the deceased’s natural children receives 60% of the

widow’s pension.

For a salaried employee’s widow or dependent widower, 50% of

the pension or the insured’s base salary during the last 5 years.

Each orphan (under age 18 or age 25 if a student; no limit if

disabled) and dependent parents receive 15% of the insured’s

pension or average salary.

The maximum survivor pension is 100% of the insured’s

pension or salary.

Funeral grant: For the funeral of a wage earner or a salaried

employee, 3 months’ minimum income.

Administrative Organization

Private insurance: Superintendent of Pension Fund

Management Companies provides general supervision.

Individual pension fund management companies (AFPs)

administer individual capitalization accounts.

Social insurance: Ministry of Labor and Social Welfare,

through the Superintendent of Social Security, provides

general supervision.

Institute of Social Security Standardization administers the

program.

Sickness and Maternity

Regulatory Framework

First law: 1924.

Current laws: 1978, 1981, and 1985.

Type of program: Social insurance system. Cash and medical

benefits.
SSPTW: The Americas, 2003 ♦ 63

Chile

Note: Insured persons choose to be covered by the public

national health service system or by private social security

health institutes.

Coverage

Public system: All public- and private-sector workers;

pensioners; persons receiving work injury, unemployment, or

family allowance benefits.

Private system: Covered workers and their dependents.

Persons not receiving family allowances may contract in.

Source of Funds

Public system

Insured person: Wage earners and salaried employees

contribute 7% of earnings. Pensioners contribute 7% of the

pension.

Employer: None, except subsidies for maternity benefits.

Government: A partial subsidy.

Private system

Insured person: Wage and salary workers and the selfemployed contribute 7% of earnings, regardless of contracted

plan.

Employer: None.

Government: Partial subsidy for maternity benefits.

The maximum monthly earnings for contribution purposes (old

and new systems) are 60 UFs (unidades de fomento). In

January 2003, one UF equaled 16,743.58 pesos. The value of

the UF for pension purposes is adjusted monthly to changes in

the consumer price index.

Qualifying Conditions

Cash sickness and maternity benefits: Currently insured

wage earners and salaried employees with a total of 6 months

of contributions including 3 months of contributions in the last

6 months. Currently insured self-employed persons with

12 months of enrollment and 6 months of contributions in the

12 months before the onset of incapacity.

Medical benefits: All workers who are currently covered.

The qualifying conditions for the public and private systems

are the same.

Sickness and Maternity Benefits

Public system

Sickness benefit: For public-sector employees, 100% of net

earnings. For private-sector employees, the average monthly

net earnings in the 3 months before the onset of illness.

Maternity benefit: For public-sector employees, 100% of net

earnings. For private-sector employees, the average monthly

net earnings in the 3 months before the onset of illness.

Benefit is payable for 6 weeks before and 12 weeks after the

expected date of childbirth.

Private system

Sickness and maternity benefit: The insured signs a minimum

12-month contract with an individual health institute. Benefits

vary by contract but cannot be less than those provided by

the public system.

Benefit adjustment: Benefits are adjusted after every

12 consecutive months of benefits paid to the insured.

Workers’ Medical Benefits

Public system

Medical benefits: Benefits include general and specialist care,

periodic medical examinations, hospitalization, medicines,

dental care, and maternity care. There is no limit to duration.

Private system

Medical benefits: Benefits vary by contract but generally

include medical and surgical care, hospitalization,

pharmaceuticals, and maternity care. Some contracts also

provide dental care. The insured makes copayments.

Dependents’ Medical Benefits

Public system

Medical benefits for dependents: Benefits include general and

specialist care, periodic medical examinations, hospitalization,

medicines, dental care, and maternity care. There is no limit to

duration.

Private system

Medical benefits for dependents: Same as cash sickness and

maternity benefits. All women are entitled to regular checkups

while pregnant and for up to 6 months after giving birth;

children under age 6 are also entitled to regular checkups.

Administrative Organization

Public system: Ministry of Health provides general

supervision.

National Health Services administers benefits and services.

Private system: Superintendent of Health Institutions

oversees individual health institutes.

Work Injury

Regulatory Framework

First law: 1916.

Current law: 1968.

Type of program: Social insurance system.
64 ♦ SSPTW: The Americas, 2003

Chile

Coverage

Employed persons, government workers, students, and some

self-employed persons.

Source of Funds

Insured person: None, except for the self-employed.

Employer: 0.95% of payroll, plus up to 6.8% of payroll

according to the industry and the assessed degree of risk (for

wage earners and salaried employees). Employers may

contract out of the system by offering equal or improved

benefit provisions.

Government: Contributes as an employer.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

For public-sector employees, 100% of net earnings. For

private-sector employees, the benefit is average monthly net

earnings in the 3 months before the onset of illness. The

benefit is payable from the day of injury for up to 12 months

(may be extended up to 24 months).

Benefit adjustment: Benefits are adjusted as wages rise either

by law or collective agreement.

Permanent Disability Benefits

Permanent disability pension: With an assessed degree of

disability of at least 70% (total disability), 70% of the base

wage.

Constant-attendance supplement: 30% of the base wage.

Partial disability: With an assessed degree of disability of

between 40% and 67.5%, 35% of the base wage. A lump-sum

grant of up to 15 months’ base wages is paid for an assessed

degree of disability of between 15% and 37.5%.

Workers’ Medical Benefits

Benefits include necessary medical, dental, and pharmaceutical

services; hospitalization; appliances; rehabilitation; and

occupational retraining. There is no cost sharing.

Survivor Benefits

Survivor pension: 50% of the insured’s pension, payable to a

widow over age 45 or caring for a child; at any age if disabled.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 18 (age 24 if a student or any age if

disabled); 50% for each full orphan.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Superintendent of Social Security administers contributions

and cash benefits through the Institute of Social Security

Standardization, the Private Salaried Employees’ Welfare Fund,

other private enterprises, and employers’ nonprofit mutual

insurance groups.

National Health Service provides medical benefits.

Unemployment

Regulatory Framework

First law: 1937.

Current laws: 1981 (unemployment) and 2001 (severance),

implemented in 2002.

Type of program: Dual employment-related and mandatory

individual severance account system.

Note: A system of mandatory individual severance accounts

was implemented in October 2002.

Coverage

Employment-related system: Employed persons.

Individual severance account: Employed persons; new

entrants aged 18 or older and workers who sign a new work

agreement after October 1, 2002.

Voluntary participation for other workers.

Exclusions: Most domestic workers, apprentices, pensioners

(unless partially disabled), the self-employed, and members of

the armed forces.

Source of Funds

Employment-related system

Insured person: None.

Employer: None.

Government: Total cost met through the Unified Family

Allowances and Unemployment Fund.

Individual severance account

Insured person: 0.6% of insured earnings a month (plus an

administrative fee) for up to 11 years for each job. (Workers

employed under a fixed-term contract do not contribute.)

Employer: 2.4% of insured earnings a month for up to 11 years

(for lower-income workers, 1.6% to the insured’s individual

account and 0.8% to the Solidarity Severance Fund). If an

employee has more than one employment contract, each

employer must contribute (3% of earnings for workers

employed under a fixed-term contract).
SSPTW: The Americas, 2003 ♦ 65

Chile

Government: Annual payment to the Solidarity Severance

Fund, adjusted annually depending on the level of coverage.

The maximum monthly earnings for contribution purposes are

90 UFs.

Qualifying Conditions

Unemployment benefit

Employment-related system: The insured has 52 weeks of

coverage during the previous 2 years (for wage earners and

salaried employees) and is registered for employment and able

and willing to work. Unemployment must not be due to

reasons within the insured’s control.

Individual severance account: Must be unemployed and have

at least 1 year of contributions; those with fixed-term contracts

must have 6 months of contributions since they first joined the

system or since the individual account was last fully drawn

down.

If the balance in the individual account is insufficient to pay a

benefit, the insured is eligible for a benefit under the Solidarity

Severance Fund provided they were dismissed due to forces

beyond their control, had contributed in the 12 months before

unemployment, were not employed on a fixed-term contract,

and had not refused a suitable job offer. Benefit under the

Solidarity Severance Fund is available only twice in any 5-year

period.

Unemployment Benefits

Employment-related system: For the first 90 days,

17,338 pesos a month; between 91 days and 180 days,

11,560 pesos a month; between 181 days and 360 days,

8,669 pesos a month. Persons who are eligible for benefits may

also continue to receive family allowances, maternity benefits,

and medical benefits.

If the insured is eligible for a Solidarity Severance Fund

benefit, the employer can reduce the unemployment benefit

paid to the insured to the value of the contributions paid on

the insured’s behalf.

Individual severance account: The benefit decreases each

month and lasts from 1 to 5 months depending on the length of

the contribution period. The first monthly benefit is calculated

as a percentage of total contributions. The percentage varies

according to the total number of monthly payments to which

the insured is entitled. The amounts of the second and

following payments are 90%, 80%, and 70% of the first monthly

amount, respectively. The fifth payment is equal to the

remaining value of the capital in the individual account.

If the insured is eligible to a benefit from the Solidarity

Severance Fund, in all instances the benefit is paid for

5 months. The first monthly benefit is equal to 50% of average

earnings in the last 12 months; 45% for the second; 40% for

the third; 35% for the fourth; and 30% for the fifth month. The

guaranteed minimum benefit is equal to the minimum wage.

Insured persons leaving employment under a fixed-term

contract or who retire are entitled to a single lump-sum

payment equal to the total accumulated capital in the individual

account, plus interest. If the insured dies before retirement, the

accumulated capital is transferred to a designated heir.

The insured can opt to stop receiving benefits in order to

safeguard the accumulated capital for a future period of

unemployment. Persons who are eligible for benefits may also

continue to receive family allowances, maternity benefits, and

medical benefits.

The minimum monthly benefit (for insured workers entitled to a

Solidarity Severance Fund benefit) is 67,000 pesos for the first

payment, decreasing gradually to 31,800 pesos for the fifth

payment.

The maximum monthly benefit (for insured workers entitled to a

Solidarity Severance Fund benefit) is 128,000 pesos for the first

payment, decreasing gradually to 77,100 pesos for the fifth

payment.

Benefits are paid after 45 days of unemployment.

Benefit adjustment: The maximum and minimum benefits

provided under the Solidarity Severance Fund are adjusted

annually in February according to the consumer price index.

Administrative Organization

Employment-related system: Ministry of Labor and Social

Welfare provides general supervision.

Superintendent of Social Security, through the Institute of

Social Security Standardization and Family Allowance

Compensation Funds, administers the program.

Individual severance account: Severance Fund Manager

(AFC) administers the program.

Family Allowances

Regulatory Framework

First laws: 1937 (salaried employees) and 1953 (wage earners).

Current law: 1981 (wage earners and salaried employees).

Type of program: Employment-related system (unified

program for wage and salaried workers).

Coverage

Employed persons and pensioners with one or more children or

other eligible dependents.

Special program for the needy.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost met through the Unified Family

Allowances and Unemployment Fund.
66 ♦ SSPTW: The Americas, 2003

Chile

Qualifying Conditions

Family allowances: The child must be under age 18 (age 24 if

a student; no limit if disabled); also payable from the fifth

month of pregnancy.

Allowances are also paid for a dependent wife, a disabled

husband, a widowed mother, stepchildren, orphaned or

abandoned grandchildren and great-grandchildren, orphans,

and disabled or aged parents over age 65.

Special benefits are provided for persons assessed as needy.

Family Allowance Benefits

Family allowances: A fixed monthly amount is paid for each

dependent; disabled persons receive a double allowance.

Special benefits are provided for persons assessed as needy.

Benefit adjustment: Benefits are adjusted periodically.

Administrative Organization

Ministry of Labor and Social Welfare and the Superintendent

of Social Security provide general supervision.

Family Allowance Compensation Fund, the Institute of Social

Security Standardization, and other public and private

organizations are responsible for the payment of benefits.

Special program administered by the Emergency Social Fund.
SSPTW: The Americas, 2003 ♦ 67

Colombia

Colombia

Exchange rate: U.S.$1.00 equals 2,860.80 pesos.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1946, implemented in 1965.

Current laws: 1993, implemented in 1994; and 2003.

Type of program: Social insurance and private insurance

systems.

Notes: The insured person may choose either the social

insurance system or the system of private mandatory

individual accounts and may switch membership every 3 years.

The labor code requires larger employers to provide generally

similar benefits to employees in regions where either program

has not yet been applied.

Coverage

All employees, including new employees joining the state oil

company (Ecopetrol) after January 29, 2003.

Exclusions: Agricultural employees in some regions.

Voluntary coverage for the self-employed.

The program is being gradually extended to all regions.

Special system for employees of the state oil company

(Ecopetrol) who joined before January 30, 2003, teachers, the

military, and the national police.

Source of Funds

Insured person: 3.375% of earnings. An additional 1% of

earnings for income over 4 times the minimum wage and

between 0.2% and 1% of earnings for income over 16 times the

minimum wage to the solidarity fund, which subsidizes low

earners.

Employer: 10.125% of payroll.

Between February 2004 and February 2006, combined

employee-employer contributions are to increase to 15.5% in

three stages. Over the period, employee contributions will

increase to 3.625%, to 3.75%, and to 3.875%; employer

contributions will increase to 10.875%, to 11.25%, and to

11.625%, respectively.

Government: A partial subsidy to the solidarity fund.

The minimum earnings for contribution and benefit purposes

are equal to the legal minimum wage; domestic workers, half

the legal minimum wage. As of July 2003, the minimum wage

was equal to 35,531.25 pesos.

Qualifying Conditions

Old-age pension

Social insurance: Age 60 (men) or age 55 (women) with

1,000 weeks of contributions.

Special pension: Age 50 or age 55 for certain hazardous forms

of employment, according to specified qualifying conditions.

Old-age settlement: The insured does not meet the qualifying

conditions for a pension.

Private insurance: Age 62 (men) or age 57 (women), and the

accumulated capital in the individual account must be

sufficient to purchase an annuity equal to 110% of the

minimum wage.

Guaranteed minimum pension: Age 62 (men) or age 57 (women)

and the pension is less than the minimum pension set by law.

Disability pension: If under age 20, at least a 50% loss of

normal earning capacity with 26 weeks of contributions in the

year before the onset of disability. If aged 20 or older, 50 weeks

of contributions in the last 3 years and, in the case of illness,

contributions for at least 25% of the period between age 20 and

the onset of disability.

The assessed degree of disability is reviewed every 3 years.

Disability settlement: The insured does not meet the

qualifying conditions for a disability pension.

Survivor pension: If the insured was under age 20, 50 weeks

of contributions. If the insured was aged 20 or older, 50 weeks

of contributions in the last 3 years and contributions for 20%

of the period between age 20 and death if the death was the

result of an illness; 25% of the period if the death was the

result of an accident.

Survivor settlement: The insured did not meet the qualifying

conditions for a pension.

Old-Age Benefits

Old-age pension

Social insurance: 65% of base earnings (average earnings in

the 10 years prior to receiving the pension), plus an increment

of 2% of earnings for each 50-week period of contributions

between 1,000 weeks and 1,200 weeks, up to a maximum of 73%

of the basic monthly wage; plus 3% for each 50-week period

between 1,200 weeks and 1,400 weeks, up to a maximum of 85%

of the basic monthly wage.

Beginning February 1, 2004, the pension is equal to between

55% and 65% of the basic monthly wage, plus 1.5% for every

50-week period of contributions up to a maximum of 80% of the

basic monthly wage.

Old-age settlement: If the insured person meets the age

requirement but does not meet the contributions requirement, a

pension is provided.

The minimum social insurance pension is equal to the minimum

wage.
68 ♦ SSPTW: The Americas, 2003

Colombia

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Annual adjustment for changes in the

consumer price index.

Private insurance: The pension is based on the value of the

insured’s contributions plus accrued interest. The capital in

the individual account must be sufficient to purchase an

annuity equal to 110% of the minimum wage. Contributions

made to the public system are provided as a pension bond. At

retirement, the insured may make periodic withdrawals from the

individual account to guarantee income for the expected

lifespan, buy an annuity from a private insurance company, or

a combination of the two.

Guaranteed minimum pension: If the pension is less than the

minimum pension set by law, the government will make up the

difference.

Permanent Disability Benefits

Disability pension: For an assessed degree of disability

greater than 66%, 54% of the basic monthly wage plus an

increment of 2% of earnings for every 50-week period of

contributions over 800 weeks. For an assessed degree of

disability of between 50% and 66%, 45% of the basic monthly

wage plus an increment of 1.5% of earnings for every 50-week

period of contributions over 500 weeks.

The minimum pension is equal to the minimum monthly wage.

The maximum pension is 75% of the basic monthly wage.

Disability settlement: If the insured does not meet the

contributions requirements, a pension is provided.

Schedule of payments: Fourteen payments a year.

Benefit adjustment: Annual adjustment for changes in the

consumer price index.

Survivor Benefits

Survivor pension: 45% of the basic monthly wage plus an

increment of 2% for every 50-week period of contributions over

500 weeks, up to a maximum of 75% of the basic monthly wage.

Eligible survivors are a spouse (or partner) aged 30 or older

who lived with the insured for at least 5 years and all those

economically dependent on the insured, including dependent

parents and dependent disabled siblings. A surviving spouse

(or partner) younger than age 30 receives a limited pension for

up to a maximum of 20 years.

Orphan’s pension: 20% of the insured’s pension to each

orphan under age 18 (age 25 if a student, no limit if disabled);

30% if a full orphan.

The minimum survivor pension is equal to the minimum

monthly wage.

The maximum survivor pension is 100% of the insured’s

pension.

Schedule of payments: Thirteen payments a year.

Survivor settlement: A pension is provided to dependents.

Funeral grant: The cost of the funeral up to the value of the

monthly old-age pension or the last wage, but not less than

5 times and no more than 10 times the minimum wage.

Administrative Organization

Social insurance: Ministry of Labor and Social Security

provides general supervision.

Social Security Institute administers the program nationally.

Regional funds and local offices, established and supervised

by the Social Security Institute, administer contributions and

benefits locally.

Private insurance: National Banking Superintendent

provides general supervision.

Individual pension fund management companies (SAFPs)

administer individual capitalization accounts.

Sickness and Maternity

Regulatory Framework

First law: 1938.

Current law: 1993, implemented in 1995.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Coverage is to be extended gradually to all, regardless of their

ability to contribute.

Source of Funds

Insured person: 4% of earnings; the self-employed, 12% of

earnings.

Employer: 8% of payroll.

Government: Finances the program for low earners through

the solidarity fund and through additional government

contributions.

The minimum earnings for contribution purposes are equal to

the minimum wage.

Qualifying Conditions

Cash sickness and medical benefits: Four weeks of

contributions immediately before the claim, except in

emergency cases.

Cash maternity benefits: Nine months of contributions

before the expected date of childbirth. (Benefits are also

payable to parents of adopted children.)

Sickness and Maternity Benefits

Sickness benefit: 66.6% of earnings in the month before the

onset of illness is payable after a 4-day waiting period for up to

180 days.
SSPTW: The Americas, 2003 ♦ 69

Colombia

Maternity benefit: 100% of earnings, payable for 12 weeks.

The spouse may take one of the 12 weeks as paternity leave,

with the benefit period for the mother reduced to 11 weeks.

Workers’ Medical Benefits

The insured may choose between public or private health care.

Benefits and facilities vary depending on the health plan.

Benefits include medical, surgical, hospital, pharmaceutical,

maternity, and dental care and related services. Preexisting

conditions must be covered, although they may be subject to a

waiting period; no waiting period for pregnant women and

babies younger than 1 year.

Dependents’ Medical Benefits

The insured may choose between public or private health care.

Benefits and facilities vary depending on the health plan.

Benefits include medical, surgical, hospital, pharmaceutical,

maternity, and dental care and related services. Preexisting

conditions must be covered, although they may be subject to a

waiting period; no waiting period for pregnant women and

babies younger than 1 year.

Administrative Organization

Ministry of Health provides general supervision.

National Social Security Council on Health administers the

program.

State Social Enterprises (ESSs) provide health services.

Work Injury

Regulatory Framework

First law: 1915.

Current laws: 1993 and 1994.

Type of program: Social insurance system.

Coverage

All employees, including new employees joining the state oil

company (Ecopetrol) after January 29, 2003, student

placements, and casual workers.

Voluntary coverage for independent workers.

Special system for employees of the state oil company

(Ecopetrol), teachers, the military, and the national police.

Source of Funds

Insured person: None.

Employer: 0.348% to 8.7% of payroll, according to the

assessed degree of risk. (In addition, 1% of the employer’s

contribution finances the work injury fund, which promotes

health and safety for workers.)

Government: None. (Contributes to the work injury fund

from general revenue.)

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

If the employer delays the payment of contributions for

2 consecutive months, the employer is automatically

disqualified from the program.

Temporary Disability Benefits

100% of earnings in the month before the onset of disability

until rehabilitation, reintegration, cure, determination of

permanent disability, or death. The benefit is paid for up to

180 days (may be extended to 360 days).

Permanent Disability Benefits

Permanent disability pension: The benefit is in proportion to

the assessed degree of disability. For an assessed degree of

disability of more than 66%, the pension is 75% of base

earnings; for an assessed degree of disability of between 50%

and 66%, the pension is 60% of base earnings.

Partial disability: For an assessed degree of disability of

between 5% and 49%, the benefit is from a minimum of one

times base earnings up to a maximum of 24 times base earnings.

Base earnings: Average earnings in the last 6 months for work

accidents or in the last 12 months for occupational diseases.

Constant-attendance allowance: 15% of the pension.

Workers’ Medical Benefits

Benefits include medical, surgical, and hospital care;

medicines; appliances; rehabilitation; and transportation.

Survivor Benefits

Survivor pension: 75% of the insured’s earnings or 100% of

the insured’s disability pension, payable to each orphan under

age 18 (age 25 if a student, no limit if disabled), a widow (a

partner) who lived with the insured for 5 years or who had

children with the insured, or a dependent disabled widower,

dependent parents, or a disabled brother or sister.

Administrative Organization

Ministry of Labor and Social Security, Ministry of Health,

National Banking Superintendent, and the National Council of

Professional Risks provide general supervision.

Social Insurance Institute and life insurance companies

authorized by the Banking Superintendent administer the

program nationally.
70 ♦ SSPTW: The Americas, 2003

Colombia

Unemployment

Regulatory Framework

First and current law: 1990 (severance).

Type of program: Mandatory individual severance account

system.

Note: Beginning January 1, 1991, acquired rights under the

previous public system were transferred to the new private

severance pay program.

Coverage

Mandatory individual severance account: All private-sector

employees.

Voluntary coverage for employees covered under the publicsector system.

Source of Funds

Insured person: None.

Employer: 8.3% of the insured’s annual salary.

Government: None.

Qualifying Conditions

Unemployment benefits: The insured must be

unemployment or retired.

Unemployment Benefits

One monthly wage for every year of employment; a reduced

benefit is paid for less than 1 year of employment. (The

insured may make authorized partial withdrawals from the

individual account to meet specified contingencies.)

Administrative Organization

Mandatory individual accounts are administered by Severance

Pay Funds (SAFCs).

National Banking Superintendent supervises the SAFCs.

Juntas Directives, involving employer and employee

representatives, monitor the SAFCs.

Family Allowances

Regulatory Framework

First law: 1957.

Current laws: 1963 and 1982.

Type of program: Employment-related system.

Note: This information is from 1999.

Coverage

All employees.

Source of Funds

Insured person: None.

Employer: 4% of payroll.

Government: None, except as an employer.

Qualifying Conditions

Family allowances (income-tested): The child must be

under age 18 (age 23 if a student, no limit if disabled). The

parent must be over age 60 or assessed as 60% disabled; must

have completed 60 days of continuous employment with the

same employer of which not less than 96 hours were credited

during the last 25 working days.

Income test: Monthly income cannot exceed four times the

legal minimum wage.

Family Allowance Benefits

Family allowances: Benefit amounts vary among funds and

may be paid in cash or in kind. A child assessed as 60% or

more disabled receives a double allowance.

Surviving spouse allowance: Twelve months’ payment to a

widow or the guardian of dependent children. If the dependent

dies, the family receives a lump sum equal to 12 monthly

payments.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision of funds.

Superintendent for Family Subsidies supervises family

allowance funds.
SSPTW: The Americas, 2003 ♦ 71

Costa Rica

Costa Rica

Exchange rate: U.S.$1.00 equals 394.64 colones.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1941 (social insurance fund).

Current laws: 1993 (pensions), 1995 (self-employed), 1995

(private pensions), and 2000 (workers’ protection).

Type of program: Social insurance and mandatory private

insurance system.

Note: In 2000, a system of mandatory private individual

accounts was introduced as a supplement to the social

insurance program.

Coverage

Employed persons in the public and private sectors.

Voluntary coverage for the self-employed.

Source of Funds

Social insurance

Insured person: 2.5% of earnings; the self-employed

contribute between 4.75% and 7.25% of earnings.

Employer: 4.5% of payroll.

Government: 0.25% of total covered earnings.

Private insurance

Insured person: 1% of earnings, plus an additional amount for

administrative fees.

Employer: 3.25% of payroll (1.5% of which is for the

mandatory severance pay scheme).

Government: None.

Qualifying Conditions

Old-age pension

Old-age pension (social insurance): Age 61 and 11 months

(men) or age 59 and 11 months (women). The total number of

required monthly contributions decreases the longer the

pension is deferred, from 466 monthly contributions at the

earliest retirement age down to 240 monthly contributions at

age 65.

Retirement from covered employment is not necessary.

The pension is payable abroad.

Old-age pension (private insurance): Age 61 and 11 months

(men) or age 59 and 11 months (women). The insured must

also submit proof of eligibility for benefits under the public

social security program.

Disability pension (social insurance): A loss of 66.6% of

usual earning capacity. The total number of required

contributions varies by age.

The minimum number of required contributions for an insured

person up to age 24 is 12 contributions.

The maximum number of required contributions for an insured

person aged between 52 and 65 is 120 contributions.

Disability grant (social insurance): A loss of 66.6% of usual

earning capacity and with at least 60 contributions.

Survivor pension (social insurance): The insured was

eligible for the old-age pension or disability pension or had

made 12 contributions in the last 24 months or 180

contributions at any time.

Social assistance benefits (noncontributory): See Family

Allowances.

Old-Age Benefits

Old-age pension

Old-age pension (social insurance): 60% of average earnings

based on the highest 48 monthly salary payments during the

last 5 years of coverage.

The basic benefit is increased by 0.0835% of average earnings

for each month of contributions above 240. An increment of

1.5%, 2.0%, and 2.5% of the pension is paid for the first,

second, and third year, respectively, that the pension is

deferred after the earliest pensionable age.

The minimum monthly pension is 36,000 colones (if the

computed pension amount is smaller, a lump sum is paid).

The maximum monthly pension is 465,207 colones (up to

658,267 colones in the case of deferred retirement).

Schedule of payments: Thirteen payments a year.

Benefit adjustment: Benefits are adjusted twice a year, in

January and July.

Old-age pension (private insurance): The insured can choose

to draw down the accumulated capital in programmed periodic

withdrawals or to purchase an annuity at retirement. In most

cases, the withdrawal of funds before retirement is not

permitted.

Social assistance old-age benefit: See Family Allowances.

Permanent Disability Benefits

Disability pension (social insurance): 60% of average

earnings based on the highest 48 monthly salary payments

during the last 5 years of coverage.

The basic benefit is increased by 0.0835% of average earnings

for each month of contributions above 240.

The minimum monthly pension is 36,000 colones (if the

computed pension amount is smaller, a lump sum is paid).

The maximum monthly pension is 465,207 colones.

Schedule of payments: Thirteen payments a year.
72 ♦ SSPTW: The Americas, 2003

Costa Rica

Disability grant: A lump sum equal to 7 months’ average

earnings.

Benefit adjustment: Benefits are adjusted twice a year, in

January and July.

Social assistance disability benefit: See Family Allowances.

Survivor Benefits

Survivor pension (social insurance): A widow(er) or

companion under age 50 receives 50% of the insured’s

pension; 60% if age 50 or under age 60; 70% if over age 60 or

disabled.

The minimum pension for one survivor is 70% of the insured’s

pension.

Orphan’s pension (social insurance): Under age 18 (age 25 if

a student) or disabled, 30% of the insured’s pension; 60% for a

full orphan.

Other eligible survivors (social insurance): Dependent

parents and dependent siblings receive 20% of the insured’s

pension each; dependents over age 55 receive 60% of the

insured’s pension each.

The total maximum survivor pension is 100% of the insured’s

pension.

Benefit adjustment: Benefits are adjusted twice a year, in

January and July.

Social assistance survivor benefit: See Family Allowances.

Administrative Organization

Social insurance: Directed by an executive president and a

nine-member board, the Costa Rican Social Insurance Fund

administers the program.

State auditor supervises the financial operations of the fund.

Private insurance: Superintendence of Pensions regulates

and supervises pension operators and service providers.

National Council for the Supervision of the Financial System

provides regulatory oversight.

Sickness and Maternity

Regulatory Framework

First laws: 1941 and 1943.

Current laws: 1961, 1973, and 1993.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Sickness and maternity cash benefits: Employed persons,

including the self-employed, indigent persons, prisoners, and

pensioners.

Medical care: All residents. (International agreements

provide emergency care for visitors to the country.)

Source of Funds

Insured person: 5.5% of earnings; the self-employed

contribute between 4.75% and 7.75% of earnings; pensioners

contribute 5% of the pension.

Employer: 9.25% of payroll.

Government: 0.25% of total covered earnings.

Qualifying Conditions

Cash sickness and medical benefits: Contributions in the

month preceding the onset of illness and currently registered

for cash sickness. For medical benefits, coverage begins in the

month in which the insured first registers.

Cash maternity benefits and maternity care: The insured

has 26 weeks of contributions in the last 52 weeks. The wife of

an insured man is eligible for maternity care if the insured

contributed in the month preceding the birth.

Sickness and Maternity Benefits

Sickness benefit: 60% of earnings during last 3 months,

payable after a 3-day waiting period.

Maternity benefit: 50% of earnings, payable for 30 days

before and 90 days after the expected date of childbirth.

(Health insurance pays 50% and the employer pays the

remaining 50%.)

Workers’ Medical Benefits

Medical services are normally provided directly to patients

through the medical facilities of the Social Insurance Fund.

Benefits include general, specialist, and maternity care;

hospitalization; medicines; dental, auditory, and limited

optometry services; and appliances (at a reduced cost).

Benefits are payable for up to 52 weeks (may be extended in

special cases).

Dependents’ Medical Benefits

Medical services are normally provided directly to patients

through the medical facilities of the Social Insurance Fund.

Benefits include general, specialist, and maternity care;

hospitalization; medicines; dental, auditory, and limited

optometry services; and appliances (at a reduced cost).

Benefits are payable for up to 52 weeks (may be extended in

special cases).

Funeral expenses: 80,000 colones, payable for the funeral of

the insured or his or her spouse or companion.

Administrative Organization

Costa Rican Social Insurance Fund administers the program.

Costa Rican Social Insurance Fund owns and operates 29

hospitals and 152 clinics and is gradually extending jurisdiction

over other hospitals and clinics.
SSPTW: The Americas, 2003 ♦ 73

Costa Rica

Work Injury

Regulatory Framework

First law: 1925.

Current law: 1982 (labor code).

Type of program: Employer-liability system, involving

compulsory and voluntary insurance with a public carrier.

Coverage

Employed persons.

Source of Funds

Insured person: None.

Employer: Total cost, met through insurance premiums

varying according to the assessed degree of risk.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

75% of daily earnings for first 45 days; thereafter, 100% of the

minimum salary plus 75% of the insured’s earnings over this

amount. The benefit is payable from the onset of disability for

up to 2 years.

The minimum benefit equals the legal minimum wage at the time

of the onset of disability.

Permanent Disability Benefits

Permanent disability pension: For an assessed degree of

disability of more than 67% (total disability), the monthly

pension is 100% of the minimum wage plus 90% of the

insured’s earnings that exceed the minimum wage.

Grants may be awarded in order to purchase, rent, or modify a

house.

Constant-attendance allowance: 78,275 colones in case of total

permanent disability; an additional 44,547 colones for the most

severe cases.

Partial disability: If the assessed degree of disability is

between 50% and 67%, the benefit equals 67% of earnings and

is payable for up to 10 years. If the assessed degree of

disability is between 0.5% and 50%, the benefit equals the

assessed degree of disability times annual earnings and is

payable for up to 5 years. Benefit may be extended for

additional 5-year periods on a means-tested basis.

Workers’ Medical Benefits

Benefits include medical and surgical care, hospitalization,

medicines, appliances, and rehabilitation.

Survivor Benefits

Survivor pension: 40% of the insured’s earnings, payable to

a widow or to a disabled widower. The pension is payable for

10 years but may be extended for additional 5-year periods in

special cases.

The maximum widow(er) pension is 40% of the insured’s

earnings; 30% if there are other eligible dependents.

Orphan’s pension: 15% to 40% of the insured’s earnings for

up to three orphans under age 18 (age 25 if a student in higher

education, no limit if disabled).

Other eligible survivors: 20% of the insured’s earnings is

payable to the insured’s mother (30% if there are no dependent

children) for a period of 10 years. A pension is also payable to

a dependent father or other dependent adults including those

aged 60 or older and unable to work.

The maximum total survivor pension is 75% of the insured’s

earnings or 100% of the minimum wage, whichever is higher.

Funeral grant: 75,000 colones, plus transportation costs

(15,000 colones if the death occurred in Cost Rica or

60,000 colones if the death occurred abroad).

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

National Insurance Institute administers the program.

Unemployment

Regulatory Framework

No statutory benefits are provided. (Under labor law,

employers must contribute 1.5% of payroll to a mandatory

severance pay scheme.)

Family Allowances

Regulatory Framework

First and current law: 1974.

Type of program: Social assistance system.

Coverage

Indigent persons who are not entitled to a contributory

pension.

Source of Funds

Insured person: None.

Employer: 5% of payroll.

Government: 20% of proceeds from the sales tax.
74 ♦ SSPTW: The Americas, 2003

Costa Rica

Qualifying Conditions

Family allowances (means-tested): Allowances are payable

to persons over age 65, disabled persons, widows with

dependents under age 18 or disabled at any age, widows over

age 50 without dependents, and orphans under age 18.

Family Allowance Benefits

Family allowances (means-tested): 13,800 colones a month

for a beneficiary, plus 10% for each dependent up to a

maximum of three.

Administrative Organization

Ministry of Labor and Social Security provides general

supervision.

Social Development and Family Allowances Fund directs

the program.

Costa Rican Social Insurance Fund administers the program.
SSPTW: The Americas, 2003 ♦ 75

Cuba

Cuba

Exchange rate: U.S.$1.00 equals 1 peso.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1963 and 1964.

Current law: 1979.

Type of program: Social insurance system.

Note: This information is from 1999.

Coverage

All wage earners.

Special system for members of armed forces, interior ministry

staff, the self-employed, artists, and members of agricultural

cooperatives.

Source of Funds

Insured person: None. (The self-employed contribute 10% of

earnings.)

Employer: 14% of payroll.

Government: Any deficit and contributes as an employer.

The cost of burial services.

All of the above contributions also finance sickness and

maternity benefits and work injury benefits.

Qualifying Conditions

Old-age pension: Age 60 (men) or age 55 (women) with

25 years of employment. Age 55 (men) or age 50 (women) if the

last 12 years or 75% of employment was in dangerous or

arduous work.

Partial pension: Age 65 (men) or age 60 (women) with 15 years

of employment. Retirement is not necessary, but total current

income cannot exceed former income.

The pension is not payable abroad.

Disability pension: For the full pension, assessed as

physically or mentally incapable of work.

Partial pension: Assessed inability to perform usual work,

employed at the onset of disability, and under age 23. If age 23

or older, the number of years of employment needed to qualify

increases with age.

A partial pension at age 28 or older requires 3 years of

employment.

Survivor pension: The insured was employed or a pensioner

at the time of death; employed 6 months before the date of

death and for 75% of his or her adult life.

Old-Age Benefits

Old-age pension: 50% of average earnings (the portion of

earnings above 3,000 pesos a year is reduced by 50%) during

the best 5 out of the last 10 years, plus 1% of earnings for

every year of employment beyond 25 years (1.5% in the case of

dangerous or arduous work).

Deferred pension: Increments of 1.5% to 4% for every year of

deferral between ages 60 and 65 (men) and between ages 55

and 60 (women); thereafter, 1% a year.

Partial pension: 40% of average earnings, plus 1% of earnings

for every year of employment beyond 15 years.

The minimum pension is 59 pesos a month, or 79 pesos a

month, or 80% of wages, depending on average earnings and

the number of years of employment.

The maximum pension is 90% of average earnings.

Permanent Disability Benefits

Disability pension: 40% of average earnings (the portion of

earnings above 3,000 pesos a year is reduced by 50%) during

the best 5 out of the last 10 years, plus 1% of earnings for

every year of employment beyond 15 years.

The minimum pension is 59 pesos a month, or 79 pesos a

month, or 80% of wages, depending on average earnings and

the number of years of employment.

The maximum pension is 90% of average earnings.

Partial disability: 30% to 50% of lost earnings, depending on

the number of years of employment up to 25 years. The

pension is increased by 1% for every year of employment

above 25 years. During rehabilitation the pension is 70% of

former earnings.

If unemployed as the result of a common disability, a pension

equal to 50% of former earnings in the first year; thereafter,

25%.

Survivor Benefits

Survivor pension: If the deceased was employed at the time

of death, the pension is 100% of earnings for the first month

and 50% of earnings for the next 2 months; if the deceased was

a pensioner, then 100% of the insured’s pension for 3 months.

Thereafter, 70%, 85%, or 100% of the insured’s pension for

one, two, or three or more dependent survivors, respectively

(80%, 90%, or 100% of the insured’s pension if the pension is

less than 60 pesos a month). The pension is divided equally

among all eligible dependents.

Eligible dependents: Widow or a female partner, a needy

widower or a male partner aged 60 or disabled, orphans under

age 17 or disabled, and needy parents.

The maximum pension for a working widow is 25% of the

survivor pension.

A nonworking widow under age 40 and without dependents

receives the full pension for 2 years.

Unemployed widows aged 40 or older receive the full pension.
76 ♦ SSPTW: The Americas, 2003

Cuba

Free burial services are provided by the government for all

residents.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its Social Security and Social Assistance Directorate.

Municipal social security offices and work centers process

applications.

Pensions are paid through the Popular Savings Bank.

Sickness and Maternity

Regulatory Framework

First law: 1934 (maternity benefits only).

Current laws: 1974 (maternity) and 1979 (sickness).

Type of program: Dual social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash sickness and maternity benefits: Employed persons,

members of agricultural cooperatives, and members of special

systems.

Medical benefits: All residents.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above. Also covers the cost of medical

services.

Qualifying Conditions

Cash sickness benefits: Currently employed.

Cash maternity benefits: Currently employed with 75 days of

employment in the 12 months preceding maternity leave.

Medical benefits: Resident in Cuba.

Sickness and Maternity Benefits

Sickness benefit: 60% of earnings; if hospitalized, 50% of

earnings. The benefit is payable after a 3-day waiting period

until medical certification expires (new certification by a

medical committee is required every 26 weeks) or a disability

pension is granted.

The minimum benefit is 1.5 pesos a day (80% of earnings if the

wage is less than 1.65 pesos a day).

The maximum benefit is 90% of earnings.

Tuberculosis benefit: 100% of earnings until cured.

Maternity benefit: 100% of earnings, payable for 6 weeks

before and 12 weeks after the expected date of childbirth.

The minimum maternity benefit is 20 pesos a week.

Maternity social benefit: Beginning 12 weeks after the birth,

60% of earnings if the mother is unable to work because she

has to care for the child. The payment is made until the child is

aged 6 months.

Workers’ Medical Benefits

Free medical services are provided to patients by public

medical centers. Benefits include medical, dental, and

maternity care; prenatal and postnatal care; hospitalization;

medicines during hospitalization; and rehabilitation. Benefits

are provided until recovery.

Dependents’ Medical Benefits

Free medical services are provided to patients by public

medical centers. Benefits include medical, dental, and

maternity care; prenatal and postnatal care; hospitalization;

medicines during hospitalization; and rehabilitation. Benefits

are provided until recovery.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its Social Security and Social Assistance Directorate.

Work centers assume the costs and pay cash benefits.

Ministry of Public Health supervises the administration of

medical services provided by public medical and hospital

centers.

Work Injury

Regulatory Framework

First law: 1916.

Current law: 1979, implemented in 1980.

Type of program: Dual social insurance (cash benefits) and

universal (medical care) system.

Coverage

Employed persons, civilian personnel of the armed forces and

interior ministry, the self-employed, artists, and members of

agricultural cooperatives.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.
SSPTW: The Americas, 2003 ♦ 77

Cuba

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

80% of earnings; if hospitalized, 70% of earnings. The benefit

is payable from the first day of disability until medical

certification expires (new certification by a medical committee is

required every 26 weeks) or until a disability pension is

granted.

The minimum benefit is 1.5 pesos a day (80% of earnings if the

wage is less than 1.65 pesos a day).

The maximum benefit is 90% of earnings.

Permanent Disability Benefits

Permanent disability pension: 50% of average earnings

during the best 5 out of the last 10 years, plus 1% of earnings

for every year of employment beyond 25 years.

Work injury supplement: 10% of the pension.

Constant-attendance allowance: 20% of the pension.

The minimum pension is 59 pesos a month, or 79 pesos a

month, or 80% of wages, depending on average earnings and

the number of years of employment.

The maximum pension is 90% of average earnings.

Partial disability: 40% to 60% of lost earnings, depending on

the number of years of employment up to 25 years. The

pension is increased by 1% for every year of employment

above 25 years. During rehabilitation the pension is 70% of

former earnings.

If unemployed as a result of a work-related disability, a pension

equal to 70% of former earnings in the first year; thereafter,

35%.

Workers’ Medical Benefits

Free medical services are provided to patients by public

medical centers. Benefits include medical and dental care,

hospitalization, medicines, appliances, and rehabilitation.

Benefits are provided until recovery.

Survivor Benefits

Survivor pension: If the deceased was employed at the time

of death, the pension is 100% of earnings for the first month

and 50% of earnings for the next 2 months; if the deceased was

a pensioner, 100% of the insured’s pension for 3 months.

Thereafter, 70%, 85%, or 100% of the insured’s pension for

one, two, or three or more dependent survivors, respectively

(80%, 90%, or 100% of the insured’s pension if the pension is

less than 60 pesos a month). The pension is divided equally

among all eligible dependents.

Eligible dependents: Widow or a female partner, a needy

widower or a male partner aged 60 or disabled, orphans under

age 17 or disabled, and needy parents.

The maximum pension for a working widow is 25% of the

survivor pension.

A nonworking widow under age 40 and without dependents

receives the full pension for 2 years.

Unemployed widows aged 40 or older receive the full pension.

Free burial services are provided by the government for all

residents.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its Social Security and Social Assistance Directorate.

Work centers assume the costs and pay short-term cash

benefits.

Ministry of Public Health supervises the administration of

medical services provided by public medical and hospital

centers.

Family Allowances

Regulatory Framework

Dependents of young workers conscripted into military service

are eligible for assistance from the Social Security Fund.
78 ♦ SSPTW: The Americas, 2003

Dominica

Dominica

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1970 (provident fund).

Current law: 1975 (social security), with amendments.

Type of program: Social insurance system.

Coverage

Employees, self-employed persons, and apprentices aged 14 to

60.

Source of Funds

Insured person: 3% of earnings; the self-employed contribute

7% of earnings.

Employer: 7% of payroll.

Government: None.

The maximum annual earnings for contribution purposes are

E.C.$60,000.

All of the above contribution also pay for sickness and

maternity benefits.

Qualifying Conditions

Old-age pension: Aged 60 or older with at least 300 weeks of

paid or credited contributions, including at least paid

150 contributions.

Old-age grant: An insured person aged 60 or older who does

not meet the qualifying conditions for a pension.

Disability pension: Under age 60 with 150 weeks of paid or

credited contributions.

Disability grant: An insured person under age 60 who does

not meet the qualifying conditions for a disability pension.

Survivor pension: The insured person met the qualifying

conditions for a pension or was a pensioner at the time of

death. The spouse must have been married to the insured

person for at least 3 years.

Survivor grant: The insured person did not meet the

qualifying conditions for a pension.

Old-Age Benefits

Old-age pension: 30% of average earnings in the 3 best years

out of the last 10, plus 2% for every 50-week period of

contributions between 500 weeks and 750 weeks and 1% for

every 50 weeks of contributions over 750.

The maximum pension is 70% of earnings.

Deferred retirement: The pension is increased by 6% of the

pension for every complete year of deferral.

Old-age grant: A lump sum of three times average weekly

covered earnings for every 50-week period of paid or credited

contributions.

Permanent Disability Benefits

Disability pension: 30% of average earnings in the 3 best

years out of the last 10, plus 2% for every 50-week period of

contributions between 500 weeks and 750 weeks and 1% for

every 50 weeks of contributions over 750.

The maximum pension is 70% of earnings.

Disability grant: A lump sum of 3 times average weekly

covered earnings for every 50-week period of paid or credited

contributions.

Survivor Benefits

Survivor pension: 50% of the insured’s pension, payable at

age 50 to a widow(er). If the spouse was married for less than

3 years or is under age 50, the widow(er) receives a limited

survivor pension for 1 year or for as long as caring for

dependent children.

Orphan’s pension: 25% of the insured’s pension (33% if a full

orphan or disabled), payable to dependent children under

age 16 (age 18 if a full-time student).

The minimum monthly benefit is E.C.$50.

The maximum survivor pension is 100% of the insured’s

pension.

Survivor grant: A lump sum of 3 times average weekly

covered earnings for every 50-week period of paid or credited

contributions.

Funeral grant: A lump sum of E.C.$1,800.

Administrative Organization

Ministry of Health and Social Security provides general

supervision.

Social Security Board administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1975 (social security).

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed persons and apprentices aged 14 to 60.
SSPTW: The Americas, 2003 ♦ 79

Dominica

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Cash sickness benefits: Thirteen weeks of employment

immediately preceding the onset of illness, including 8 weeks

of paid contributions.

Cash maternity benefits: Thirty weeks of contributions, with

at least 20 weeks in the 30 weeks prior to the 6 weeks before

the expected date of childbirth.

Cash maternity grant: For an insured woman or a noninsured

spouse of an insured person with at least 26 weeks of paid

contributions in the last year.

Sickness and Maternity Benefits

Sickness benefit: 60% of average weekly earnings during the

last 13 weeks is payable from the first day of illness if the

illness lasts beyond 4 days. The benefit is payable for up to

26 weeks.

Maternity benefit: 60% of average weekly earnings during the

last 30 weeks, normally payable 6 weeks before and 6 weeks

after the expected date of childbirth. In certain cases, the

benefit may be payable from 3 weeks before and up to 9 weeks

after.

Maternity grant: A lump sum of E.C.$500.

Workers’ Medical Benefits

Benefits include a reduction on medical bills, subject to

government-stipulated costs and conditions.

Administrative Organization

Ministry of Health and Social Security provides general

supervision.

Social Security Board administers the program.

Work Injury

Regulatory Framework

First law: 1938 (workmen’s compensation).

Current law: 1984 (occupational disease).

Type of program: Employer-liability system, normally

involving compulsory insurance with a private carrier.

Coverage

Employed persons and apprentices aged 14 to 60.

Source of Funds

Insured person: None.

Employer: Total cost, met through the direct provision of

benefits or insurance premiums.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

The disability must last at least 3 days.

Temporary Disability Benefits

60% of average earnings in the last 13 weeks for an adult;

66.6% of average earnings for a child (under age 17), until the

disability ends. For an insured person with less than 13 weeks

of insured earnings, the benefit is the average of the insured

weeks, with a minimum number of 2 weeks used as the divisor.

Permanent Disability Benefits

60% of average earnings in the last 13 weeks for an adult;

66.6% of average earnings for a child (under age 17), until the

disability ends. For an insured person with less than 13 weeks

of insured earnings, the benefit is the average of the insured

weeks, with a minimum number of 2 weeks used as the divisor.

Partial disability benefit: A percentage of the permanent

benefit proportional to the assessed degree of disability.

A lump sum is paid if the assessed degree of disability is more

than 1% and less than 30%.

Workers’ Medical Benefits

For treatment in Dominica, benefits include a reduction on

medical bills, subject to government-stipulated costs and

conditions. For treatment overseas, all cases are subject to a

maximum of E.C.$5,000.

Survivor Benefits

Survivor pension: 50% of the insured’s pension, payable at

age 50 to a widow(er). If the spouse was married for less than

3 years or is under age 50, the widow(er) receives a limited

survivor pension for 1 year or for as long as caring for

dependent children.

Orphan’s pension: 25% of the insured’s pension (33% if a full

orphan or disabled), payable to dependent children under

age 16 (age 18 if a full-time student).

The minimum monthly benefit is E.C.$50.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: E.C.$1,800 for the death of the insured person;

E.C.$1,500 for the death of a spouse; E.C.$750 for the death of a

dependent child under age 16.
80 ♦ SSPTW: The Americas, 2003

Dominica

Administrative Organization

Ministry of Health and Social Security provides general

supervision.

Social Security Board administers the program.
SSPTW: The Americas, 2003 ♦ 81

Dominican Republic

Dominican Republic

Exchange rate: U.S. $1.00 equals 27 pesos.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1947.

Current laws: 2001 (social security), implemented in 2003; and

2002 (pensions regulation).

Type of program: Mandatory private insurance and social

assistance system.

Note: The 2001 law created a three-part system that will be

implemented in stages. A system of individual accounts for

public- and private-sector workers began in June 2003. The

other programs, a social assistance program for those with

very low income and subsidized individual accounts for the

self-employed, are scheduled to begin in August 2004 and

2006, respectively. The old social insurance system, which

covers current pensioners and public-sector employees who

opt not to join the new system, is being phased out.

Coverage

Private insurance

Individual mandatory account: All public- and private-sector

workers, employers, and Dominican citizens living abroad.

During the transition, mandatory coverage for all private-sector

workers under age 45 in 2003 and voluntary coverage for

workers aged 45 or older in 2003 and current public-sector

employees.

Subsidized individual mandatory account: Self-employed

workers with income above the minimum wage.

Social assistance: Severely disabled, indigent, unemployed,

or self-employed persons with income below the minimum

wage.

Source of Funds

Private insurance

Insured person: 1.98% of earnings. To be raised to 2.88% of

earnings by 2008.

Employer: 5.02% of payroll. To be raised gradually to 7.12%

by 2008; includes 0.4% of payroll to finance minimum pensions

(Social Solidarity Fund).

Government: Finances the subsidized individual mandatory

account.

The minimum earnings for contribution purposes are equal to

one minimum salary.

The maximum earnings for contribution purposes are 20 times

the minimum wage.

Note: The above contributions include administrative fees for

the pension fund and management companies (AFPs) and the

operating costs of the Superintendent of Pensions, the

supervisory organization.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Private insurance

Old-age pension: Age 60 with at least 30 years of

contributions; age 55 if the pension is equal to at least 50% of

the minimum pension.

Early retirement: Aged 57 or older, unemployed, and with

300 months of contributions; if less than 300 months, the

insured can receive a pension based on the accumulated funds

or continue contributing until reaching 300 months.

Old-age pension (subsidized): Age 65 with at least 25 years of

contributions.

Disability pension: The insured has a chronic illness or injury

(regardless of its origin) and has used up either sickness or

work injury benefits. Total disability is at least a 2/3 loss of

earning capacity; partial disability, between 1/2 and 2/3 loss.

The insured’s degree of disability is assessed by a regional

medical committee.

Survivor benefit: The deceased was insured or a pensioner at

the time of death.

Social assistance (income-tested): Age 60; at any age if

severely disabled or indigent. Eligible survivors are

widow(er)s, partners, unmarried children under age 18 (age 21 if

a full-time student, no limit if disabled).

Old-Age Benefits

Private insurance

Old-age pension: The pension is based on the value of the

accumulated capital plus accrued interest. The accumulated

capital can be used to purchase a price-indexed annuity or to

make programmed withdrawals. The insured’s contributions

under the old system will be recognized as an indexed bond.

Early retirement: The minimum old-age pension is paid until

age 60. The maximum early retirement pension is equal to the

insured’s final salary.

The minimum old-age pension is equal to the lowest legal

minimum wage.

Benefit adjustment: Pensions are adjusted according to

changes in the minimum public-sector wage.

Old-age pension (subsidized): The pension is based on the

value of the accumulated capital plus accrued interest. The

accumulated capital can be used to purchase a price-indexed
82 ♦ SSPTW: The Americas, 2003

Dominican Republic

annuity or can be withdrawn in the form of scheduled periodic

payments.

The minimum old-age pension (subsidized) is equal to 70% of

the private-sector minimum wage.

Benefit adjustment: Pensions are adjusted according to price

changes.

Social assistance old-age pension: 60% of the minimum

public-sector wage (plus a Christmas bonus).

Benefit adjustment: Pensions are adjusted according to price

changes.

Permanent Disability Benefits

Disability pension (private insurance): 60% of indexed

average earnings during the previous 3 years if totally

disabled. The insured’s contributions under the old system are

recognized as an indexed bond. The reference pension is used

to purchase an annuity from an insurance company.

Partial disability: 30% of indexed average earnings during the

previous 3 years.

There is no minimum disability pension.

Benefit adjustment: Pensions are adjusted according to price

changes.

Social assistance disability pension: 60% of the minimum

public-sector wage. (Plus a Christmas bonus.)

Benefit adjustment: Pensions are adjusted according to price

changes.

Survivor Benefits

Survivor pension (private insurance): 60% of indexed

average earnings during the previous 3 years. The insured’s

contributions under the old system will be recognized as an

indexed bond. The reference pension is used to purchase an

annuity from an insurance company.

A spouse over age 50 receives the pension for life; a spouse

between ages 50 and 55, for 6 years only; a spouse younger

than age 50, for 5 years.

If there are orphans (under age 18; up to age 21 if a full-time

student, no limit if disabled), the pension is split between the

spouse and the orphans.

There is no minimum survivor pension.

Benefit adjustment: Pensions are adjusted according to price

changes.

Social assistance survivor pension: 60% of the minimum

public-sector wage. (Plus a Christmas bonus.)

Benefit adjustment: Pensions are adjusted according to price

changes.

Administrative Organization

National Social Security Board (CNSS) provides overall

governance of the social security system.

Private insurance: Superintendent of Pensions (SIPEN)

provides general supervision.

Individual pension fund management companies (AFPs)

administer the individual accounts.

Authorized insurance companies sell annuity products.

Sickness and Maternity

Regulatory Framework

First law: 1947.

Current laws: 1948 and 2001 (social security), not fully

implemented.

Type of program: Social insurance system. Cash and

universal medical benefits.

Coverage

Cash and medical benefits (nonsubsidized): Employed

persons and their spouses or partners, the insured’s children

up to age 21 if in full-time education (no limit if disabled), and

pensioners.

Cash and medical benefits (subsidized): Pensioners

receiving subsidized benefits and the self-employed and home

workers and their dependents.

Source of Funds

Insured person: 2.7% of earnings. To be raised gradually to

3% of earnings by 2008.

Employer: 6.3% of payroll. To be raised gradually to 7% of

payroll by 2008.

Government: Total cost of social assistance and part of the

cost for the subsidized and pediatric health care programs.

Qualifying Conditions

Cash sickness benefits (nonsubsidized): Twelve months’

contributions or a pensioner.

Cash maternity benefits (nonsubsidized): Eight months of

contributions in the 12 months before childbirth or no paid

work during this period.

Medical benefits

Basic health plan: Universal coverage.

Pediatric health care: Universal coverage.

Sickness and Maternity Benefits

Sickness benefit (nonsubsidized): 60% of earnings in the

last 6 months (40% if hospitalized), payable after a 3-day

waiting period for up to 26 weeks.

Maternity benefit (nonsubsidized): Three months’ covered

salary, payable for 6 weeks before and 6 weeks after the

expected date of childbirth.
SSPTW: The Americas, 2003 ♦ 83

Dominican Republic

Nursing allowance: If the insured’s salary is less than three

times the minimum national wage, an allowance is paid for up

to 12 months after the child’s birth.

Workers’ Medical Benefits

Benefits under the basic health plan include preventive,

inpatient and outpatient, pediatric, and specialist care;

medicines; dental treatment for children; rehabilitation; and

prosthesis for disabled persons, according to the schedule in

law.

Cost-sharing for some medicines. The insured is reimbursed

for 70% of the cost of medicines. Social assistance

beneficiaries receive basic medicines free of charge.

Dependents’ Medical Benefits

The basic health plan provides coverage.

Pediatric health care: From the 45th day after birth until age 5.

Benefits include nutrition, pediatric care, and child

development programs.

Administrative Organization

National Health Insurance and Health Risk Management

Companies administer the basic health plan.

Health Risk Management Companies may be private, public, or

mixed entities.

Superintendent of Health and Labor Risks supervises the

National Health Insurance and Health Risk Management

Companies.

Superintendent of Health and Labor Risks supervises the

pediatric health care program.

Pediatric health care is administered by the Social Insurance

Institute.

Work Injury

Regulatory Framework

First law: 1932.

Current law: 2001 (social security).

Type of program: Social insurance system.

Coverage

All insured workers.

Source of Funds

Insured person: None.

Employer: Total cost, met through contributions that vary

according to the assessed degree of risk (the average

contribution is 1.2% of payroll).

Government: None.

The maximum annual earnings for contribution purposes are

10 times the minimum average national wage.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Benefits are provided for temporary disability.

Permanent Disability Benefits

Permanent disability pension: Benefits are provided

according to four degrees of disability.

Permanent partial disability for current occupation: The loss of

at least 50% of earning capacity.

Permanent total disability for current occupation: Unable to

perform usual occupation.

Permanent total disability for any occupation: Unable to

perform any occupation.

Severe total disability: Totally disabled and in need of

constant attendance.

All benefits are calculated using the base salary. The base

salary is equal to average covered earnings in the last

6 months before the onset of injury or occupational disease.

For insured workers with less than 6 months of covered

earnings, the base salary is 50% of total covered earnings.

For an assessed degree of disability of more than 15% and up

to 50%, the lump-sum benefit is between 5 and 10 times the

base salary. For an assessed degree of disability of more than

50% and up to 67%, the monthly pension is 50% of the base

salary. For an assessed degree of disability of at least 67%, the

monthly pension is 70% of the base salary. For a severe total

disability the monthly pension is 100% of the base salary.

Workers’ Medical Benefits

Medical benefits are the same as provided under the basic

health plan. Benefits include general, specialist, and surgical

care; hospitalization; medicines; and prostheses.

Survivor Benefits

Survivor pension: 50% of the insured’s pension is payable to

a widow(er) aged 45 or older or disabled. The pension ceases

on remarriage. If the widow(er) is under age 45 or remarries, a

lump sum equal to 2 years’ pension is paid.

Orphan’s pension: 20% of the insured’s pension is payable to

each orphan under age 18 (age 21 if a full-time student, no limit

if disabled).

Administrative Organization

Superintendent of Health and Labor Risks supervises,

monitors, and controls the program.
84 ♦ SSPTW: The Americas, 2003

Dominican Republic

Family Allowances

Regulatory Framework

Benefits are payable to unemployed single mothers with young

children who are without sufficient resources to meet basic

needs. (The benefits are provided under the Old Age,

Disability, and Survivors program, above).
SSPTW: The Americas, 2003 ♦ 85

Ecuador

Ecuador

Exchange rate: Uses the U.S. dollar (U.S.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1928.

Current laws: 1988, 1998, and 2001 (social security).

Type of program: Social insurance system.

Note: The 2001 law to create a complementary system of

mandatory individual accounts has not yet been implemented.

The government-financed Bono de Desarrollo Humano

program provides basic social assistance cash benefits to

needy persons aged 65 or older and persons aged 18 to 65

assessed as at least 70% disabled.

Coverage

Employees in industry, commerce, and agriculture; government

employees; and the self-employed.

Coverage is optional for the President of the Republic and

government ministers.

Exclusions: Congressmen and family members working in a

family enterprise (including a father, mother, spouse, sons

under age 18, and dependents).

Special system for small farmers.

Source of Funds

Insured person: 9.15% to 11.35% of earnings, according to

occupation; 17.5% to 20.5% for self-employed and seasonal

workers.

Employer: 11.15% to 20.50% of payroll, according to

occupation.

Government: A subsidy for old-age, disability, and survivor

pensions.

The minimum earnings for contribution purposes are equal to

the legal minimum wage. The legal minimum wage varies

according to the nature of employment or work.

The maximum earnings for contribution purposes are 10 times

the minimum wage.

Qualifying Conditions

Old-age pension: Age 55 with 360 months of contributions if

born before November 30, 1946, or age 65 with 180 months of

contributions. (Age 60 with 360 months of contributions to be

phased in gradually by February 2006.) The required minimum

number of monthly contributions is reduced beginning at

age 66.

Early pension: Age 45 before November 30, 2001, with

300 months of contributions or unemployed for 6 months.

Disability pension: Five years of contributions and a loss of

more than 50% of earning capacity.

Survivor pension: Five years of contributions or was a

pensioner at the time of death. Eligible survivors include a

widow, children younger than age 18 (no limit if disabled), a

dependent mother and father, and brothers and sisters younger

than age 18 (no limit if disabled).

Survivor settlement: The insured did not meet the qualifying

conditions for a pension but had up to 59 contributions.

Funeral grant: Six months of contributions in the last

12 months; the insured was a pensioner (also payable for an

eligible survivor).

Old-Age Benefits

Old-age pension: The pension is based on monthly average

earnings during the 5 best years and the number of years of

paid contributions. After 40 years of contributions, the

pension is increased for every additional year of coverage.

The minimum pension is U.S.$25.

The maximum pension is U.S.$125.

Working old-age pensioners may receive pension benefits and

earnings if they rejoin the social security scheme.

Early pension: A reduced benefit is paid.

Benefit adjustment: Pensions are adjusted periodically for

increases in the legal minimum wage and cost-of-living

compensation.

Permanent Disability Benefits

Disability pension: The pension is based on monthly average

earnings during the 5 best years and the number of years of

paid contributions. After 40 years of contributions, the

pension is increased for every additional year of coverage.

Survivor Benefits

Survivor pension: 40% of the insured’s pension, payable to a

widow, a disabled widower, a common-law wife of at least

2 years, or the mother of the insured’s children.

Orphan’s pension: 20% of the insured’s pension (40% if a full

orphan) for each orphan under age 18 (no limit if disabled).

Other dependent survivors: A mother or father receives 20%

of the insured’s pension; each brother or sister who is under

age 18, disabled, or a student receives 10% of the insured’s

pension.

Survivor settlement: Total contributions are refunded as a

lump sum.

The minimum survivor pension is equal to the legal minimum

wage plus cost-of-living compensation for a family group.

The maximum survivor pension is 100% of the insured’s

pension for a family group.
86 ♦ SSPTW: The Americas, 2003

Ecuador

Death grant: Twenty-one times the minimum wage, minus the

value of the funeral grant.

Funeral grant: Up to U.S.$450.

Administrative Organization

Under the direction of the Minister of Social Welfare, the

Advisory Council provides general supervision.

Social Security Institute administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1935.

Current laws: 1942, 1964, 1988, and 2001 (social security).

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employees in industry, commerce, and agriculture; government

employees; independent workers; and the self-employed.

Voluntary coverage for the self-employed and part-time

workers.

Coverage is optional for the President of the Republic and

government ministers.

Exclusions: Congressmen and family members working in a

family enterprise (including a father, mother, spouse, and sons

under age 18 and dependents).

Special system for small farmers.

Medical care is available to all insured persons.

Source of Funds

Insured person: None; widows who are not insured or retired

contribute 4.71% of their widow pension for medical benefits.

Employer: 4.71% of payroll (3.41% for medical benefits and a

1.30% subsidy for sickness and maternity benefits).

Government: None.

Qualifying Conditions

Cash sickness benefits: At least 6 months of contributions

before the onset of illness.

Cash maternity benefits: Three hundred and sixty days of

contributions in the year before giving birth or at least

378 days of contributions in the 16 months before giving birth.

Prenatal care with 6 months of contributions.

Medical benefits: One hundred and eighty days of

consecutive contributions in the 6 months before the onset of

illness or at least 189 days of contributions in the 8 months

before the onset of illness. For the voluntarily insured,

360 days of consecutive contributions in the 12 months before

the onset of illness or at least 378 days of contributions in the

16 months before the onset of illness. Benefits are provided

for 60 days after the insured ceases contributions.

Sickness and Maternity Benefits

Sickness benefit: For the first 10 weeks, 75% of average

earnings in the 3 months before the onset of illness. The

benefit is payable after a 4-day waiting period for up to

70 days; thereafter, 66% of earnings for up to a maximum of

182 days.

Maternity benefit: 75% of the insured’s last earnings is

payable 2 weeks before and 10 weeks after the expected date of

childbirth. (The employer pays 25% of the insured’s last

earnings for the same period.)

Workers’ Medical Benefits

Medical services are ordinarily provided directly to patients

through the medical facilities of the Social Security Institute.

Medical care in private clinics is possible under certain

conditions. A refund for the cost of medical care provided

through medical facilities not belonging to the Social Security

Institute is possible in certain cases. Benefits include general

and specialist care, home care, surgery, hospitalization,

medicines, appliances, rehabilitation, laboratory services, and

dental care.

Dependents’ Medical Benefits

Full medical care for infants during their first year.

Administrative Organization

Under the direction of the Minister of Social Welfare, the

Advisory Council provides general supervision.

Social Security Institute administers the program.

Social Security Institute operates its own clinics, dispensaries,

and hospitals.

Work Injury

Regulatory Framework

First law: 1921.

Current laws: 1964 and 1988.

Type of program: Social insurance system.

Coverage

All insured persons.

Source of Funds

Insured person: 1.5% of earnings.

Employer: 1.5% of payroll.

Government: None.
SSPTW: The Americas, 2003 ♦ 87

Ecuador

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Occupational disease: Six months of contributions;

12 months for voluntary contributors.

Temporary Disability Benefits

For the first 10 weeks, 75% of average earnings in the 10 weeks

before the onset of illness; thereafter, 66% of average earnings

up until the end of 12 months. If disability extends for more

than 1 year, 80% of average earnings. Benefits are paid from

the day after the onset of disability for a work injury and after a

three-day waiting period for an occupational disease.

Permanent Disability Benefits

Permanent disability pension: 80% of average earnings

during the last year or during the previous 5 years if earnings

were higher (100% of average earnings in cases of severe

disability requiring constant attendance).

Partial disability: A percentage of the full pension in

proportion to the assessed degree of disability, according to

the schedule in law.

Schedule of payments: There are 15 payments a year.

Workers’ Medical Benefits

Benefits include medical and surgical care, hospitalization,

appliances, medicines, and rehabilitation.

Survivor Benefits

Survivor pension: 40% of the insured’s pension to a widow.

Orphan’s pension: 80% of the insured’s pension.

Funeral grant: Twenty-four times the minimum wage.

Administrative Organization

Under the direction of the Minister of Social Welfare, the

Advisory Council provides general supervision.

Social Security Institute administers the program.

Unemployment

Regulatory Framework

First law: 1951.

Current laws: 1958, 1988, and 2001 (social security).

Type of program: Individual severance account and social

insurance system.

Note: In 2001, a system of individual severance accounts was

introduced. Participation is mandatory for workers under

age 40 when the program was implemented. The previous

social insurance system providing lump-sum benefits

continues to operate.

Coverage

Individual severance account: Employees in the private and

public sectors.

Social insurance: Employees in the private and public

sectors.

Exclusion: Volunteer workers.

Source of Funds

Individual severance account

Insured person: None.

Employer: 8.3% of the insured’s annual salary.

Government: None.

Social insurance

Insured person: 2% of earnings.

Employer: 1% of payroll.

Government: None.

Qualifying Conditions

Unemployment benefit

Individual severance account: The insured must be

involuntarily unemployed with 48 monthly contributions.

Social insurance: At least 60 months of contributions. The

benefit is payable after 90 days of unemployment or if

unemployment is due to the onset of permanent disability.

Unemployment Benefits

Individual severance account: A lump sum equal to three

times the average wage for the last 12 months. (The total

accumulated capital can be drawn down in the case of

disability, retirement, or death of the insured.)

The maximum benefit is equal to the accumulated capital in the

individual account, plus interest.

Benefit adjustment: Benefit amounts are fixed annually.

Unemployment benefit (social insurance): A lump sum

equal to three times the average wage for the last 12 months.

Survivor benefit (social insurance): A lump sum is paid to a

widow, children under age 21, a disabled widower, or, in their

absence, to certain other eligible surviving relatives of an

insured person born before November 30, 1961.

Benefit adjustment: Benefit amounts are fixed annually.

Administrative Organization

Individual severance account: Savings managing

institutions (EDAPs) manage the accounts.

Banking Superintendency supervises the EDAPs.
88 ♦ SSPTW: The Americas, 2003

Ecuador

Social insurance: Under the direction of the Minister of

Social Welfare, the Advisory Council provides general

supervision.

Social Security Institute administers the program.

Family Allowances

Regulatory Framework

No statutory benefits are provided. (Mothers with at least one

child (under age 18) in low-income households receive a

monthly allowance under the Bono de Desarrollo Humano

program. The mother or her spouse should not be receiving a

wage or be affiliated with the social insurance program.)
SSPTW: The Americas, 2003 ♦ 89

El Salvador

El Salvador

Exchange rate: U.S.$1.00 equals 8.75 colones.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1953, implemented in 1969.

Current law: 1996 (mandatory private insurance), implemented

in 1998.

Type of program: Social insurance and mandatory private

insurance system.

Note: The 1996 law established a system of mandatory

individual accounts. The social insurance system is closed to

new entrants and will be phased out. Those who were

younger than age 36 in 1997 transferred to the private

insurance system; those who were aged 36 or older but

younger than age 55 (men) or age 50 (women) could join

voluntarily.

Coverage

Private insurance: All employees in the private, public, and

municipal sectors not covered under social insurance.

Social insurance: All insured persons who, in January 1997,

were over age 55 (men) or age 50 (women).

Source of Funds

Private insurance

Insured person: 3.25% of earnings, plus an additional amount

for disability and survivor insurance and administrative fees.

Employer: 6.75% of earnings.

Government: A subsidy for the guaranteed minimum pension.

The minimum earnings for contribution purposes are equal to

the legal minimum wage.

The maximum earnings for contribution purposes are equal to

gross monthly earnings. Gross monthly earnings must not

exceed the national public-sector maximum wage.

Social insurance

Insured person: 7% of earnings.

Employer: 7% of payroll.

Government: The government provides an indexed bond to

individuals who switched to the private system. The bond

represents the value of insured’s contributions to the old

social insurance system plus interest.

Qualifying Conditions

Private insurance

Old-age pension: Age 60 (men) or age 55 (women) with

25 years of contributions. There is no age requirement if the

insured has 30 years of contributions. Retirement is also

permitted if the pension equals at least 60% of basic earnings

or 160% of the current minimum pension.

Disability pension: Assessed as disabled by the Disability

Commission and was actively contributing prior to the onset of

disability (in the case of a common accident) with 6 months of

contributions in the 12 months before the onset of disability or

with 10 years of contributions including 3 years out of the

5 years before the date in which the disability was first

assessed.

Survivor pension: The insured was a pensioner or an active

contributor prior to death.

Social insurance

Old-age pension: Age 60 (men) or age 55 (women) with

25 years of contributions. There is no age requirement if the

insured has 30 years of contributions.

Disability pension: Assessed as disabled by the Disability

Commission with at least 36 months of contributions including

18 months in the 36 months prior to the onset of disability.

Must be under age 60 (men) or age 55 (women).

Survivor pension: The insured was a pensioner or had 5 years

of contributions.

Old-Age Benefits

Private insurance

Old-age pension: The pension is equal to the insured’s

contributions plus accrued interest. The value of the insured’s

contributions made under the social insurance system are

provided as an indexed bond. At retirement, the insured may

either make periodic withdrawals from the individual account to

guarantee income for the duration of the expected lifespan or

buy an annuity from a private insurance company, or use a

combination of both.

Guaranteed minimum pension: The amount is adjusted

annually according to changes to the average salary.

Social insurance

Old-age pension: 30% of the base salary for the first 3 years’

contributions, plus 1.5% for each additional year.

The base salary is equal to the average earnings of the last

120 months.

The minimum monthly pension is 700 colones.

The maximum pension is 100% of the base salary.
90 ♦ SSPTW: The Americas, 2003

El Salvador

Permanent Disability Benefits

Private insurance

Disability pension: 70% of the base salary for total disability.

Partial disability: 50% of the base salary.

The base salary is equal to the average earnings of the last

120 months.

Social insurance

Disability pension: 30% of the base salary for the first 3 years’

contributions, plus 1.5% for each additional year.

The base salary is equal to the average earnings of the last

120 months.

The minimum monthly pension is 700 colones.

Survivor Benefits

Private insurance

Survivor pension: 60% of the insured’s pension is payable to

a spouse or partner with no eligible children; 50% if there are

eligible children (increased to 60% when children are no longer

eligible for a pension).

Orphan’s pension: 25% of the insured’s pension is payable to

each eligible child.

Parent’s pension: 20% of the insured’s pension is payable

each to a father and mother (30% if only one surviving parent).

If there is no surviving spouse or partner, the benefit for

children or parents is increased.

Social insurance

Survivor pension: 50% of the insured’s pension is payable to

a widow (married at least 6 months before the insured’s death),

a female partner (cohabiting for the last 3 years; except if

pregnant, has a child, or is disabled), and a disabled widower.

Orphan’s pension: 25% of the insured’s pension to each child

(40% if a full orphan).

Other eligible survivors (in the absence of the above): 30% of

the insured’s pension to a mother aged 55 or older and 30% of

the insured’s pension to a father aged 60 or older; 40% of the

insured’s pension if there is only one surviving parent.

Administrative Organization

Private insurance: Superintendent of Pensions provides

general supervision.

Individual pension fund management companies (AFPs)

administer individual accounts.

Social insurance: Superintendent of Pensions provides

general supervision.

Social Insurance Institute plans, manages, and administers the

program.

Social Insurance Institute is supervised by a board of

12 directors including the Minister of Labor, representatives of

other ministries, the Director of Social Insurance, and

representatives of management, labor, and other professional

groups.

Sickness and Maternity

Regulatory Framework

First law: 1949.

Current law: 1953.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employed and self-employed persons in industry and

commerce and pensioners.

Exclusions: Agricultural, domestic, and casual employees.

Source of Funds

Insured person: 3% of earnings. The self-employed

contribute 10.5% of earnings. Pensioners contribute 7.8% of

old-age or disability pensions and 6% of work injury pensions.

Employer: 7.5% of payroll.

Government: An annual subsidy of 5 million colones

(adjusted every 5 years).

The minimum monthly earnings for contribution and benefit

purposes are 300 colones.

The maximum monthly earnings for contribution and benefit

purposes are 6,000 colones.

All of the above contributions also finance work injury

benefits.

Qualifying Conditions

Cash sickness benefits: There is no minimum qualifying

period if in current employment; if unemployed, 8 weeks of

contributions during the last 3 calendar months before the

onset of illness.

Cash maternity benefits: Twelve weeks of contributions

during the 12 calendar months before the expected date of

childbirth.

Medical benefits: There is no minimum qualifying period if in

current employment; if unemployed, 8 weeks of contributions

during the last 4 months.

Sickness and Maternity Benefits

Sickness benefit: 75% of average monthly earnings, payable

after a 3-day waiting period for up to 52 weeks for the same

sickness.

Maternity benefit: 75% of average earnings, payable for up to

12 weeks.
SSPTW: The Americas, 2003 ♦ 91

El Salvador

Other benefits include a milk allowance for up to 12 weeks

(with a medical prescription) and a layette (clothing and other

necessities for the newborn).

Workers’ Medical Benefits

Benefits include complete medical and maternity care,

hospitalization, medicines, auxiliary services for diagnosis and

treatment, and dental care except for cosmetic reasons.

Dependents’ Medical Benefits

The insured’s wife receives prenatal and postnatal care and inkind benefits and medical and dental benefits for sickness and

accidents. Children up to age 6 receive ambulatory care and

preventative dental care.

Administrative Organization

Social Insurance Institute plans, manages, and administers the

program.

Social Insurance Institute is supervised by a board of

12 directors including the Minister of Labor, representatives of

other ministries, the Director of Social Insurance, and

representatives of management, labor, and other professional

groups.

Social Insurance Institute operates its own clinics and

hospitals and contracts services from the Ministry of Health

and the private sector where required.

Work Injury

Regulatory Framework

First law: 1949.

Current law: 1953.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons in industry and

commerce and public service.

Exclusions: Domestic and casual employees and teachers.

Source of Funds

Insured person: See source of funds under Sickness and

Maternity, above.

Employer: See source of funds under Sickness and Maternity,

above.

Government: See source of funds under Sickness and

Maternity, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

75% of average monthly earnings received during the first 3 of

the last 4 months. The benefit is payable from the day after the

onset of disability for up to 52 weeks.

Permanent Disability Benefits

Permanent disability pension: 70% of average monthly

earnings during the last year, if the assessed degree of

disability is greater than 66%.

The minimum monthly pension is 700 colones.

Dependent child allowance: 140 colones a month for each

dependent child under age 16 (age 21 if a student) or disabled.

Constant-attendance supplement: Up to 50% of the pension.

Partial permanent disability: If the assessed degree of

disability is between 35% and 66%, a percentage of the full

pension in proportion to the assessed degree of loss of

earning capacity. If the assessed degree of disability is

between 20% and 35%, a temporary pension equal to double

the amount of the permanent disability pension based on the

assessed degree of disability is payable for up to 3 years.

Workers’ Medical Benefits

Medical benefits are the same as those provided under

Sickness and Maternity, above. Benefits include complete

medical and maternity care, hospitalization, drugs, auxiliary

services for diagnosis and treatment, and dental care except for

cosmetic reasons.

Survivor Benefits

Survivor pension: 60% of the insured’s pension is payable to

a spouse.

Orphan’s pension: 30% of the insured’s pension for each

child.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: Twice the average monthly salary.

Administrative Organization

Social Insurance Institute plans, manages, and administers the

program.

Social Insurance Institute is supervised by a board of

12 directors including the Minister of Labor, representatives of

other ministries, the Director of Social Insurance, and

representatives of management, labor, and other professional

groups.

Social Insurance Institute operates its own clinics and

hospitals and also contracts services from the Ministry of

Health and the private sector where required.
92 ♦ SSPTW: The Americas, 2003

Grenada

Grenada

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1969 (provident fund).

Current law: 1983 (social insurance), with amendments.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons aged 16 to 59, including

public-sector employees.

Source of Funds

Insured person: 4% of earnings; the self-employed contribute

6.75% of earnings.

Employer: 5% of covered wages.

Government: None.

The maximum annual earnings for contribution purposes are

E.C.$36,000.

All of the above contributions also finance sickness benefits,

maternity benefits, and work injury benefits.

Qualifying Conditions

Old-age pension: Age 60 with 500 weeks of coverage,

including at least 150 weeks of paid contributions.

Partial pension: Age 60 with 260 weeks of coverage, including

at least 150 weeks of paid contributions.

Old-age grant: Age 60 and does not meet the qualifying

conditions for an old-age pension. Must have at least

50 weeks of paid or credited contributions.

Disability pension: Under age 60 with 150 weeks of paid

contributions.

Disability grant: Under age 60 and does not meet the

qualifying conditions for a disability pension. Must have at

least 50 weeks of paid or credited contributions.

Survivor pension: The insured was a pensioner or was

eligible for a pension at the time of death.

Survivor grant: The insured was eligible for an old-age grant

or a disability grant.

Funeral grant: The insured was a pensioner or was eligible for

an old-age grant or a disability grant.

Old-Age Benefits

Old-age pension: 30% of average earnings, plus 1% of

earnings for every 50-week period of contributions over

500 weeks.

Partial pension: 16% of average earnings, plus 1% of earnings

for every 25-week period of contributions over 150 weeks up to

499 weeks.

The minimum weekly pension is E.C.$40.

Old-age grant: A lump sum equal to 5 times average weekly

insurable earnings for every 50-week period of contributions.

Benefit adjustment: Benefits are reviewed periodically.

Permanent Disability Benefits

Disability pension: 30% of average earnings, plus 1% of

earnings for every 50-week period of contributions over

500 weeks.

The minimum weekly pension is E.C.$40.

The maximum pension is 60% of earnings.

Disability grant: A lump sum equal to 5 times average weekly

insurable earnings for every 50-week period of contributions.

Benefit adjustment: Benefits are reviewed periodically.

Survivor Benefits

Survivor pension: 75% of the insured’s pension, payable to a

widow aged 50 or older or disabled and to a dependent

disabled widower. A limited pension is payable for 1 year to a

widow who is under age 50.

Orphan’s pension: 25% of the insured’s pension for each

child under age 16 (age 18 if a student); 50% each for a

disabled child or a full orphan.

The minimum weekly pension is E.C.$8.50; E.C.$17 for a

disabled child or a full orphan.

The maximum survivor pension is 100% of the insured’s

pension.

Survivor grant: A lump sum equal to 5 times average weekly

insurable earnings for every 50-week period of contributions.

Funeral grant: E.C.$2,000 for the funeral of the insured;

E.C.$1,500 to the insured for the funeral of a spouse; E.C.$750

to the insured for the funeral of a child.

Benefit adjustment: Benefits are reviewed periodically.

Administrative Organization

Ministry of Social Services and Labor provides general

supervision.

National Insurance Board administers the program.
SSPTW: The Americas, 2003 ♦ 93

Grenada

Sickness and Maternity

Regulatory Framework

First and current law: 1983 (social insurance), with

amendments.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employees aged 16 to 59, including public-sector employees.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Cash sickness benefits: Employed on the day before the

onset of illness or 13 weeks of contributions, including 8 out of

the 13 weeks preceding the onset of illness.

Cash maternity benefits: 30 weeks of contributions,

including 20 weeks in the 30-week period ending 6 weeks

before the expected date of childbirth.

Funeral grant: The insured person was entitled to sickness

benefits or maternity benefits at the time of death.

Sickness and Maternity Benefits

Sickness benefit: 65% of average earnings during the

13 weeks before the onset of sickness. The benefit is payable

from the first day of sickness for up to 26 weeks; for up to

52 weeks with at least 75 weeks of paid or credited

contributions in the last 3 years.

Maternity benefit: 65% of average earnings during the

30 weeks before the benefit begins. The benefit is payable for

a total of 12 weeks beginning 6 weeks before the expected date

of childbirth and up to 6 weeks after.

The minimum benefit is E.C.$450.

Maternity grant: The grant is paid to the uninsured wife of an

insured man.

The minimum grant is E.C.$450.

Funeral grant: E.C.$2,000 is paid to the person who meets the

cost of the insured’s funeral.

Benefit adjustment: Benefits are reviewed periodically.

Workers’ Medical Benefits

No statutory benefits are provided.

Dependents’ Medical Benefits

No statutory benefits are provided.

Administrative Organization

Ministry of Housing, Social Security, and Women’s Affairs

provides general supervision.

National Insurance Board administers the program.

Work Injury

Regulatory Framework

First and current law: 1998 (employment accident).

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employees aged 16 to 59, including public-sector employees.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

70% of average weekly insurable earnings over the previous

13 weeks. The benefit is payable from the day of the injury

until recovery, for up to 26 weeks.

Benefit adjustment: Benefits are reviewed periodically.

Permanent Disability Benefits

70% of average weekly insurable earnings over the previous

13 weeks. The benefit is proportionately reduced if the

assessed degree of disability is less than 100%.

Constant-attendance allowance: 50% of the disability benefit,

if 100% disabled.

Benefit adjustment: Benefits are reviewed periodically.

Workers’ Medical Benefits

Benefits include the cost of medicines, surgery, prostheses,

and overseas treatment, including the cost of transportation.
94 ♦ SSPTW: The Americas, 2003

Grenada

Survivor Benefits

Survivor pension: 75% of the insured’s pension, payable to

widow(er) for life or until the spouse remarries. On remarriage,

the spouse receives a gratuity equal to 52 times the weekly rate

of the pension.

Orphan’s pension: 25% of the insured’s pension for each

child under age 16 (age 18 if a student); 50% for a disabled

child or a full orphan.

Other dependents: 25% of the insured’s pension (50% if

totally dependent) for a period of 52 weeks.

The minimum weekly pension is E.C.$8.50; E.C.$17 for a

disabled child or a full orphan.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: E.C.$2,000 is paid to the person who meets the

cost of the insured’s funeral.

Benefit adjustment: Benefits are reviewed periodically.

Administrative Organization

Ministry of Housing, Social Security, and Women’s Affairs

provides general supervision.

National Insurance Board administers the program.
SSPTW: The Americas, 2003 ♦ 95

Guatemala

Guatemala

Exchange rate: U.S.$1.00 equals 7.90 quetzales.

Old Age, Disability, and Survivors

Regulatory Framework

First and current law: 1969, implemented on a national level

in 1977.

Type of program: Social insurance system.

Coverage

Employees, including agricultural workers and some publicsector employees.

Voluntary coverage is possible.

Special system for other public-sector employees.

Source of Funds

Insured person: 1.83 % of earnings; 5.5% of earnings for the

voluntarily insured.

Employer: 3.67% of payroll.

Government: 25% of the cost of benefits paid; also

contributes as an employer.

The maximum monthly earnings for benefit purposes are

6,000 quetzales.

Qualifying Conditions

Old-age pension: Age 62 with 180 months of contributions.

The pensionable age will increase to age 63 in 2004, to age 64

in 2006, and to age 65 in 2008.

Disability pension: Assessed as disabled with 36 months of

contributions during the last 6 years and under age 45;

60 months of contributions during the last 9 years and aged 45

to 54; 120 months of contributions during the last 12 years and

age 55 (may be younger in certain cases).

The disability pension is awarded according to two degrees of

disability: total disability, involving the loss of 2/3 of earning

capacity; and severe disability, involving the complete loss of

earning capacity and the need for the constant attendance of

another person.

Survivor pension: The insured had at least 36 months of

contributions during the last 6 years or was receiving a

pension or qualified for the old-age pension at the time of

death.

Old-Age Benefits

Old-age pension: 50% of the average wage in the last

60 months, plus an additional 0.5% of the remuneration base

for each 6-month period of contributions beyond 120 months.

Dependents’ supplements: 10% of the insured’s pension for a

wife or partner or a disabled husband, for each child under

age 18 or disabled, and for a dependent mother and a

dependent disabled father.

The minimum monthly pension, including dependents’

supplements, is 340 quetzales.

The maximum monthly pension, including dependents’

supplements, is 4,800 quetzales.

The maximum pension received by a family is 80% of the

insured’s earnings, up to 6,000 quetzales.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Permanent Disability Benefits

Disability pension: For total disability, 50% of the average

wage in the last 36 months, plus an additional 0.5% of the

remuneration base for each 6-month period of contributions

beyond 120 months. If the insured has worked for less than

36 months, the pension is 50% of average wages for the total

number of months worked.

Dependents’ supplements: 10% of the insured’s pension for a

wife or partner or a disabled husband, for each child under

age 18 or disabled, and for a dependent mother and a

dependent disabled father.

The minimum monthly pension is 340 quetzales.

The maximum monthly pension is 4,800 quetzales.

Constant-attendance supplement: In the case of severe

disability, 25% of the insured’s pension.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Survivor Benefits

Survivor pension: 50% of the total disability or old-age

pension paid or payable to the insured. The pension is

payable to a widow or a disabled widower. The minimum

monthly pension for a spouse is 170 quetzales.

Orphan’s pension: 25% of the insured’s pension, but no less

than 85 quetzales a month, for each orphan under age 18 (no

limit if disabled); or 50% of the insured’s pension for each full

orphan, but no less than 170 quetzales a month.

Dependent parents: 25% of the insured’s pension each. The

minimum monthly pension for a dependent parent is

85 quetzales a month.

The maximum survivor pension is 100% of the insured’s

pension; the sum of minimum survivor benefits cannot exceed

340 quetzales a month.

Funeral grant: A lump sum of 480 quetzales.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.
96 ♦ SSPTW: The Americas, 2003

Guatemala

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Social Security Institute administers the program.

Sickness and Maternity

Regulatory Framework

First laws: 1946 and 1953 (maternity).

Current law: 1968 (sickness and maternity), with 2003

amendment.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employees of firms with three or more workers. Freight or

passenger transport enterprises with one or more workers.

Free medical care for accidents, sickness, and maternity for

pensioners is provided through the Old Age, Disability, and

Survivors program in 19 departments.

Source of Funds

Insured person: 2% of earnings.

Employer: 4% of payroll.

Government: 2% of payroll.

Qualifying Conditions

Cash benefits: Four months of contributions in the 6 months

prior to the onset of illness.

Benefits in kind: In covered employment.

Sickness and Maternity Benefits

Sickness benefit: 2/3 of average earnings (according to the

applicable formula). The benefit is payable after a 3-day

waiting period for up to 26 weeks; may be extended in some

cases to 39 weeks. The receipt of benefit for multiple periods

of illness cannot exceed 52 weeks in a 24-month period.

The maximum monthly benefit is 2,400 quetzales.

Maternity benefit: 100% of earnings, payable for 30 days

before and 54 days after the expected date of childbirth.

Nursing mothers are also permitted 1 hour a day to nurse their

child for up to 10 months.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Workers’ Medical Benefits

Benefits include general, specialist, and maternity care;

surgery; hospitalization; pharmaceuticals; laboratory services;

X-rays; appliances; transportation; rehabilitation; and

retraining. Medical services are normally provided directly to

patients through the medical facilities of the Social Security

Institute.

Dependents’ Medical Benefits

The wife or companion of an insured man receives the same

maternity care as an insured woman and in 19 departments also

receives sickness and accident benefits.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Social Security Institute administers the program.

Social Security Institute operates 24 hospitals, 34 clinics,

10 first-aid stations, 8 dispensaries, 2 assistance units,

3 annexes attached to national hospitals, and 2 contract

services.

Work Injury

Regulatory Framework

First law: 1947.

Current law: 1994, with 2003 amendment.

Type of program: Social insurance system.

Coverage

All insured workers in the country.

Source of Funds

Insured person: 1% of earnings.

Employer: 3% of payroll.

Government: 1.5% of payroll.

Qualifying Conditions

Work injury benefits: Four months of contributions prior to

the onset of the work injury.

Temporary Disability Benefits

2/3 of earnings, payable after a 1-day waiting period.

The minimum daily benefit is 8 quetzales.

The maximum monthly benefit is 2,400 quetzales.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Permanent Disability Benefits

A lump sum of between 495 quetzales and 4,950 quetzales,

according to the assessed degree of disability.
SSPTW: The Americas, 2003 ♦ 97

Guatemala

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Workers’ Medical Benefits

Benefits include medical treatment, surgery, hospitalization,

medicines, appliances, transportation, rehabilitation services,

and retraining.

Survivor Benefits

Funeral grant: 412.50 quetzales for funeral expenses.

Benefit adjustment: Benefits are adjusted at least every 3 years

according to an actuarial assessment.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Social Security Institute administers contributions and

benefits.

Social Security Institute provides medical benefits through its

own hospitals and clinics as well as through private clinics.
98 ♦ SSPTW: The Americas, 2003

Guyana

Guyana

Exchange rate: U.S.$1.00 equals

195.41 Guyana dollars (G$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1944 (old-age assistance).

Current laws: 1969, 1981, 1986, 1989, and 1992.

Type of program: Social insurance system.

Coverage

Employed persons aged 16 to 59 in the public and private

sectors and the self-employed.

Voluntary coverage is possible for previously insured persons

up until age 60.

Exclusions: Employees earning below G$7.50 a week, casual

employment, and family labor.

Source of Funds

Insured person: 4.8% of earnings. The self-employed

contribute 10.47% of income up to the insurable limit. The

voluntary insured contribute 8.17% of average weekly income

in the last 2 years before they stopped working.

Employer: 7.2% of payroll.

Government: None, except as an employer; provides loans to

cover any deficits.

The maximum earnings for contribution and benefit purposes

are G$19,428 a week.

All of the above contributions also finance cash sickness,

maternity, and work injury benefits (except for the selfemployed).

Qualifying Conditions

Old-age pension: Age 60 with 750 weeks of contributions

paid or credited of which 150 weeks must be paid

contributions; 25 weeks of contributions are credited for each

year that the insured was over age 35 in 1969, up to a maximum

credit of 600 weeks.

Retirement is not necessary.

Old-age grant: The insured does not meet the qualifying

conditions for a pension but made at least 50 weeks of

contributions before age 60.

Disability pension: Aged 16 to 59 and permanently disabled

with a minimum of 250 weekly contributions paid or credited,

including at least 150 weeks paid (25 weeks are credited for

each year between the onset of disability and age 60).

Disability grant: The insured does not meet the qualifying

conditions for a pension but made at least 50 weeks of

contributions before the onset of disability.

Survivor pension: The insured was a pensioner or was

eligible for a pension at the time of death; or aged 16 to 59 with

a minimum of 250 weekly contributions paid or credited,

including at least 150 paid contributions.

Survivor grant: The insured did not meet the qualifying

conditions for a pension.

Old-Age Benefits

Old-age pension: 40% of average weekly covered earnings

during the best 3 years out of the last 5 years before age 60,

plus 1% of average weekly covered earnings for every 50-week

period of contributions above 750.

The minimum pension is 50% of the minimum wage.

The maximum pension is 60% or average weekly covered

earnings.

Old-age grant: 1/12 of average annual covered earnings for

every 50-week period of contributions paid or credited.

Permanent Disability Benefits

Disability pension: 30% of average weekly covered earnings

during the best 3 years out of the last 5 years before the onset

of disability, plus 1% of average weekly covered earnings for

every 50-week period of contributions above 250.

The minimum benefit is 50% of the minimum wage.

The maximum benefit is 60% of average weekly covered

earnings.

Constant-attendance allowance: G$200 a day.

Disability grant: 1/12 of average annual covered earnings for

every 50-week period of contributions paid or credited.

Survivor Benefits

Survivor pension: 50% of the pension paid or payable to the

insured, payable to a widow(er).

Child supplement: 16.6% of the insured’s pension for each

child, up to a maximum of three children.

Full orphan’s pension: 33.3% of the pension paid or payable

to the insured for each orphan, up to a maximum of three

orphans.

Survivor grant: A lump sum is paid if the insured did not meet

the qualifying conditions for a pension.

Funeral grant: G$10,630 is paid for the funeral of the insured

the insured’s spouse.

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.
SSPTW: The Americas, 2003 ♦ 99

Guyana

Sickness and Maternity

Regulatory Framework

First and current law: 1969.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Public- and private-sector employees and self-employed

persons aged 16 to 60.

Exclusions: Employees earning below G$7.50 a week, casual

employment, and family labor.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None, except as an employer; provides loans to

cover any deficits.

Qualifying Conditions

Cash sickness benefits: 50 weeks of contributions and in

covered employment during 8 of the 13 weeks before the onset

of incapacity. The insured must be under age 60.

Cash maternity benefits: 15 weeks of contributions,

including 7 during the 26-week period ending 6 weeks before

the expected date of childbirth.

Cash maternity grant: The insured woman or her spouse

meets the qualifying conditions for maternity benefit.

Sickness and Maternity Benefits

Sickness benefit: 70% of average weekly covered earnings

during the best 8 weeks in the 13 weeks before the onset of

incapacity. The benefit is payable from the fourth day of

incapacity, for up to a maximum of 26 weeks.

Maternity benefit: 70% of average weekly covered earnings

during the best 7 weeks in the 26 weeks before the start of the

benefit. The benefit is payable for 13 weeks, including the

week of childbirth plus 6 weeks before and 6 weeks after. The

benefit may be extended for up to 13 additional weeks if

complications arise.

Maternity grant: G$2,000.

Workers’ Medical Benefits

No statutory benefits are provided. (Medical care is available

in public hospitals and health centers. Medical care involves

cost sharing, with the cost scaled to income.)

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.

Work Injury

Regulatory Framework

First law: 1916.

Current law: 1969.

Type of program: Social insurance system.

Coverage

Employed persons in the public and private sectors.

Exclusions: Employees earning below G$7.50 a week, casual

employment, and family labor.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above. (Also contributes an additional 1.53% of

insurable earnings to finance employment injury for workers

under age 16 or over age 60.)

Government: None, except as an employer; provides loans to

cover any deficits.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

70% of average weekly covered earnings during the best

8 weeks in the 13 weeks before the onset of disability. The

benefit is payable after the first day if the injury lasts for more

than 3 days, for up to 26 weeks.

Permanent Disability Benefits

Permanent disability pension: If 100% disabled, the pension

is 70% of average weekly covered earnings during the best

8 weeks in the 13 weeks before the onset of disability.

Constant-attendance allowance: G$200 a day.

Partial disability: If the assessed degree of disability is at least

15%, a reduced pension is paid in proportion to the assessed

degree of disability. If the assessed degree of disability is less

than 15%, a lump-sum benefit is paid equal to 260 times the

weekly disability benefit times the assessed degree of

disability.
100 ♦ SSPTW: The Americas, 2003

Guyana

Workers’ Medical Benefits

Benefits include hospitalization, general and specialist care,

medicines, and transportation.

Survivor Benefits

Survivor pension: 35% of weekly earnings for a widow(er) or

a parent and 11.6% for each other dependent, up to a maximum

of 70% of weekly earnings.

The minimum pension for a widow(er) or parent is 50% of the

old-age or disability minimum pension; for a child, 16.6% of the

old-age or disability minimum pension.

Full orphan’s pension: 23.3% of weekly earnings until age 18.

The minimum orphan’s pension is 33.3% of the old-age or

disability minimum pension.

Death benefit: Up to G$250 to the insured’s creditors or

estate, in the absence of any dependents.

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.
SSPTW: The Americas, 2003 ♦ 101

Haiti

Haiti

Exchange rate: U.S.$1.00 equals 37.25 gourdes.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1965.

Current law: 1967.

Type of program: Social insurance system.

Note: This information is from 1995.

Coverage

Employees of industrial, commercial, and agricultural firms.

Exclusions: Unpaid family labor, members of religious

communities, and foreign diplomats.

Special system for public-sector employees.

Source of Funds

Insured person: 2% of earnings for monthly earnings of

200 gourdes or less, 3% of earnings for between 201 gourdes

and 500 gourdes, 4% of earnings for between 501 gourdes and

1,000 gourdes, and 6% of earnings for over 1,000 gourdes.

Employer: 2% of earnings for monthly earnings of

200 gourdes or less, 3% of earnings for between 201 gourdes

and 500 gourdes, 4% of earnings for between 501 gourdes and

1,000 gourdes, and 6% of earnings for over 1,000 gourdes.

Government: Meets any deficits.

Qualifying Conditions

Old-age pension: Age 55 with 20 years of contributions.

Old-age settlement: The insured does not meet the

qualifying conditions for a pension.

Disability pension: Total incapacity for work with between 10

and 20 years of contributions. The disability was not caused

by a work injury.

Survivor pension: The insured was a pensioner or was

eligible for a pension at the time of death.

Survivor settlement: The insured did not meet the qualifying

conditions for a pension.

Old-Age Benefits

Old-age pension: 33% of average earnings during the last

10 years.

Old-age settlement: A refund of contributions without

accrued interest.

Permanent Disability Benefits

Disability pension: 1/60 of average earnings for each year of

coverage during the 10 years before the onset of disability.

Survivor Benefits

Survivor pension: 50% of the pension paid or payable to the

insured. The pension is divided among the widow, orphans

under age 18 (no limit if a student or disabled), or other

dependents.

Survivor settlement: A refund of contributions without

accrued interest.

Administrative Organization

Ministry of Social Affairs provides general supervision.

National Office of Old-Age Insurance of the Social Insurance

Institute administers the program.

Social Insurance Institute is managed by a tripartite board and

a director general.

Sickness and Maternity

Regulatory Framework

First law: 1951, not implemented.

Current law: 1967, not implemented in full.

Type of program: Social insurance system. Cash and medical

benefits.

Note: In 1999, maternity benefits were introduced. Coverage

for maternity benefits is being extended gradually. Medical

benefits are provided through a clinic to all residents in

exchange for a small token payment. Medical benefits include

pediatric, dental, ophthalmic, and gynecology care and

services; preventative care; health education; and surgery.

Work Injury

Regulatory Framework

First law: 1951.

Current law: 1967.

Type of program: Social insurance system.

Note: This information is from 1995.

Coverage

Public-sector employees and employees of industrial,

commercial, and agricultural firms in specified districts.

Coverage is being extended gradually to different districts and

occupations.
102 ♦ SSPTW: The Americas, 2003

Haiti

Source of Funds

Insured person: None.

Employer: 2% of payroll (commerce), 3% of payroll (industry,

construction, and agriculture), or 6% of payroll (mining).

Government: None, except as an employer.

Qualifying Conditions

Work injury benefits: Partial or total disability before age 55.

There is no minimum qualifying period.

Temporary Disability Benefits

66.6% of earnings, payable after a 3-day waiting period for the

duration of the incapacity. The employer must pay benefits

during the waiting period.

The minimum monthly benefit is 100 gourdes.

The maximum monthly benefit is 1,000 gourdes.

Permanent Disability Benefits

Permanent disability pension: 66.6% of earnings, if totally

disabled.

The minimum monthly benefit is 100 gourdes.

The maximum monthly benefit is 1,000 gourdes.

Partial disability: For an assessed degree of disability of 10%

or more, the pension is in proportion to the assessed degree of

disability. For an assessed degree of disability of less than

10%, a lump sum is paid.

All disability pensions may be paid as a lump sum.

Workers’ Medical Benefits

Benefits include medical and dental care, surgery,

hospitalization, medicines, and appliances. Benefits are

provided until full recovery or the stabilization of the disability.

Survivor Benefits

Survivor pension: 50% of the insured’s total disability

pension, payable to a widow or a dependent disabled widower.

Orphan’s pension: 30% of the insured’s pension for each

orphan under age 21.

Dependent parents or grandparents (in the absence of the

above): 40% of the insured’s pension.

The maximum survivor pension is 80% of the insured’s

pension.

Funeral grant: One month’s earnings.

Administrative Organization

Ministry of Social Affairs provides general supervision.

Office of Work Accidents and Sickness and Maternity

Insurance of the Social Insurance Institute administers the

program.

Social Insurance Institute operates its own dispensaries and

hospital in Port-au-Prince.

Social Insurance Institute is managed by a tripartite board and

a director general.
SSPTW: The Americas, 2003 ♦ 103

Honduras

Honduras

Exchange rate: U.S.$1.00 equals 17.18 lempiras.

Old Age, Disability, and Survivors

Regulatory Framework

First and current law: 1959, implemented in 1971, with 2001

amendment.

Type of program: Social insurance system.

Coverage

Employed persons in private- and public-sector enterprises in

specified regions.

Coverage is being extended gradually to additional regions.

Exclusions: Domestic workers, temporary workers, and some

groups of agricultural workers.

Source of Funds

Insured person: 1% of earnings.

Employer: 2% of payroll.

Government: 0.5% of payroll.

The minimum monthly earnings for contribution purposes are

144 lempiras.

The maximum monthly earnings for contribution purposes are

4,800 lempiras.

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women) with

180 months of contributions.

Retirement from covered employment is necessary.

Old-age settlement: Age 65 (men) or age 60 (women) with

less than 180 months of contributions.

Disability pension: A loss of 2/3 of earning capacity in the

usual occupation with 36 months of contributions during the

last 6 years; 8 months of contributions during the last

24 months in the case of a nonoccupational accident. (Men

aged 45 or older and women aged 40 or older at the time the law

was implemented must have contributed for 5 years or

60 months at the time they joined the system.)

Disability settlement: Disabled and does not qualify for a

pension.

Survivor pension: In the case of a death resulting from a

common illness, the insured had 36 months of contributions

during the last 6 years; 8 months of contributions in the

24 months prior to the injury resulting in a nonoccupational

accident-related death.

Old-Age Benefits

Old-age pension: 40% of basic monthly earnings, plus an

additional 1% of earnings for every 12-month period of

contributions beyond 60 months.

Deferred pension: An increment of 3% of basic monthly

earnings for each year of contributions beyond age 65 (men) or

age 60 (women).

The minimum pension is 50% of basic monthly earnings.

Old-age settlement: A lump sum equal to a refund of

contributions.

Permanent Disability Benefits

Disability pension: 40% of basic monthly earnings, plus an

additional 1% of earnings for every 12-month period of

contributions beyond 60 months.

Constant-attendance supplement: If the insured is assessed as

more than 50% disabled.

The maximum pension is 80% of covered earnings.

Disability settlement: A lump sum equal to a refund of

contributions.

Survivor Benefits

Survivor pension: 40% of the insured’s actual or accrued

pension, payable to a widow(er) aged 65 or older or disabled.

Orphan’s pension: 20% of the insured’s pension for each

orphan (40% for each full orphan) under age 14 (age 18 if a

student; no limit if disabled).

Dependent parents: 20% of the insured’s pension each to a

mother of any age or a father who is over age 65 or disabled.

The maximum survivor pension is 100% of the insured’s

pension, divided as follows: widow(er) or partner, 40%;

orphans under age 14, 60%.

Funeral grant: 50% of basic monthly earnings. The minimum

funeral grant is 250 lempiras if the insured made at least one

contribution in the last 6 months.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Managed by a board of directors and director general, the

Social Security Institute administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1959, implemented in 1962, with 2001

amendment.

Type of program: Social insurance system. Cash and medical

benefits.
104 ♦ SSPTW: The Americas, 2003

Honduras

Coverage

Public-sector employees and employees of firms in industry

and commerce with one or more workers in specified regions.

Exclusions: Agricultural, domestic, family, and temporary

workers.

Unemployed female workers are not eligible for cash maternity

benefits but are eligible for medical care while pregnant and

during childbirth.

Coverage is being extended gradually to additional regions.

The labor code is still in force in regions to which social

insurance has not yet been extended.

Source of Funds

Insured person: 2.5% of earnings.

Employer: 5% of payroll.

Government: Contributes as an employer, plus 0.5% of total

covered earnings. (The contribution on total covered earnings

has never been paid.)

The minimum monthly earnings for contribution and benefit

purposes are 360 lempiras.

The maximum monthly earnings for contribution and benefit

purposes are 4,800 lempiras.

All of the above contributions also finance work injury

benefits.

Qualifying Conditions

Cash sickness benefits: Thirty-five days of contributions in

the 3 months prior to the onset of illness.

Cash maternity benefits: Seventy-five days of contributions

in the last 10 months.

Medical benefits: Currently in insured employment. If

unemployed, benefits are limited to 60 days of general care and

6 months of specialized care.

Sickness and Maternity Benefits

Sickness benefit: 66% of earnings in the last 3 months,

payable after a 3-day waiting period for up to 26 weeks; may be

extended to 52 weeks.

Maternity benefit: 66% of earnings, payable for 6 weeks

before and 6 weeks after the expected date of childbirth.

Employees who are not covered by the program may receive

sickness leave or maternity leave under the labor code.

Workers’ Medical Benefits

Medical services are provided directly to patients through the

health facilities of the Social Security Institute. Benefits

include general and specialist care, surgery, hospitalization,

necessary medicines, laboratory services, appliances, dental

care, and maternity care including postnatal care for up to

42 days.

The period of duration is dependent on continuing to fulfill the

contribution requirements or being unemployed.

Dependents’ Medical Benefits

Benefits include maternity care for the insured’s wife, including

postnatal care for up to 45 days; pediatric care for the insured’s

children until age 5 and 30 days or for up to 26 weeks after the

insured’s death.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Managed by a board of directors and director general, the

Social Security Institute administers the program.

Social Security Institute operates its own hospitals and

outpatient clinics and contracts the services of private clinics.

Work Injury

Regulatory Framework

First and current law: 1959, with 2001 amendment.

Type of program: Social insurance system.

Coverage

Public-sector employees and employees of firms in industry

and commerce with one or more workers in specified regions.

Exclusions: Agricultural, domestic, family, and temporary

workers.

Coverage is being extended gradually to additional regions.

The labor code is still in force in regions to which social

insurance has not yet been extended.

Source of Funds

Insured person: See source of funds under Sickness and

Maternity, above.

Employer: See source of funds under Sickness and Maternity,

above.

Government: See source of funds under Sickness and

Maternity, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Survivor benefit: One month in covered employment.

Temporary Disability Benefits

66% of the daily wage, payable after a 3-day waiting period for

up to 52 weeks.

The maximum daily wage for benefit purposes is 4,800 lempiras.
SSPTW: The Americas, 2003 ♦ 105

Honduras

Permanent Disability Benefits

Permanent disability pension: 66% of basic monthly

earnings, plus an increment of 1% of earnings for every 12-

month period of contributions beyond 60 months.

Partial disability: If the assessed degree of disability is greater

than 15%, a percentage of the full pension proportional to the

assessed degree of disability. A pension of below 10 lempiras

a month is converted to a lump sum.

The minimum partial disability pension in 2003 was 75 lempiras.

Constant-attendance supplement: Up to a maximum of 50% of

the insured’s pension.

Workers’ Medical Benefits

Benefits include medical, surgical, and hospital care;

medicines; and appliances.

Survivor Benefits

Survivor pension: 40% of the actual or accrued pension of

the insured, payable to a widow(er) over age 65 or disabled.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 14 (age 18 if a student, no limit if disabled);

40% if a full orphan.

Dependent parents (in absence of above): 20% of the

insured’s pension each to a mother of any age or a father who

is over age 65 or disabled.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: 50% of basic monthly earnings. The minimum

funeral grant is 125 lempiras if the insured had made at least

one contribution in the last 6 months.

Administrative Organization

Ministry of Labor and Social Welfare provides general

supervision.

Social Security Institute administers contributions and

benefits.

Social Security Institute operates its own outpatient clinics and

hospitals.
106 ♦ SSPTW: The Americas, 2003

Jamaica

Jamaica

Exchange rate: U.S.$1.00 equals

60.45 Jamaican dollars (J$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1958 (sugar workers).

Current law: 2003.

Type of program: Social insurance system.

Coverage

Employed and self-employed persons.

Voluntary coverage for other categories, if over age 18 and

under the retirement age.

Exclusions: Casual workers and unpaid family labor.

Source of Funds

Insured person: 2.5% of earnings. The self-employed

contribute J$20 a week, plus a maximum of 5% of insurable

annual earnings. Domestic workers and military personnel

contribute J$20 a week. The voluntarily insured contribute

J$20 a week.

Employer: 2.5% of wages.

Government: Contributes as an employer.

The maximum earnings for contribution purposes are J$9,620 a

week or J$500,000 a year.

All the above contributions also finance maternity benefits and

work injury benefits.

Qualifying Conditions

Old-age pension: Age 65 (men) or age 60 (women) with

1,443 weeks of paid contributions, including an annual average

of 39 weeks of paid or credited contributions.

Partial pension: A reduced pension is paid for annual average

contributions of between 13 weeks and 38 weeks.

Old-age settlement: A lump-sum grant is paid for at least

52 weeks’ or 1 year’s contributions. Substantial retirement is

necessary until age 70 (men) or age 65 (women).

Benefits are payable abroad but are subject to limitations

except where a reciprocal agreement exists.

Disability pension: Permanent incapacity for work with a

minimum of 156 weeks of paid contributions up to a maximum.

Disability settlement: A lump-sum grant is paid with at least

52 weeks or 1 year’s paid contributions.

Survivor pension: The insured had an annual average of

39 weeks’ paid or credited contributions or was a pensioner.

Old-Age Benefits

Old-age pension: A basic benefit of J$900 a week (reduced to

J$675 a week with annual average contributions of between

26 weeks and 38 weeks; J$450 with 13 weeks to 25 weeks), plus

an earnings-related benefit of J$0.06 a week for every J$13 of

employer-employee contributions paid during the working

lifetime.

Spouse’s supplement: J$300 a week for a dependent wife

aged 55 or older or a disabled husband aged 60 or older.

Old-age settlement: A lump-sum payment of J$8,100 with

52 weeks’ of paid contributions.

Permanent Disability Benefits

Disability pension: If 100% disabled, a basic benefit of

between J$100 and J$1,740 a week.

Disability settlement: A lump-sum grant is paid.

Survivor Benefits

Survivor pension: A basic benefit of J$900 a week (reduced to

J$675 a week with annual average contributions of between

26 weeks and 38 weeks; J$450 with 13 weeks to 25 weeks), plus

an earnings-related benefit of J$0.03 a week for every J$13 of

employer-employee contributions paid during the working

lifetime.

The pension is payable to a widow aged 55 or older or at any

age if disabled or caring for children under age 18. A limited

pension is paid for 52 weeks to otherwise ineligible widows. If

eligible, widows may receive duplicate benefits based on their

own earnings. The pension is also payable to a needy

disabled widower aged 60 or older.

Orphan’s pension: J$1,575 a week for full orphans under

age 18.

Funeral grant: A lump sum of J$30,000.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its National Insurance Division and local offices.

Sickness and Maternity

Regulatory Framework

First and current law: 1979.

Type of program: Social insurance system. Cash maternity

benefits only.

Medical care is provided free or at a nominal cost in public

dispensaries and hospitals.

Coverage

Resident workers aged 18 or older.
SSPTW: The Americas, 2003 ♦ 107

Jamaica

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Cash sickness benefits: No statutory benefits are provided.

Cash maternity benefits: Twenty-six weeks of paid

contributions in the 52 weeks preceding the expected date of

childbirth.

Sickness and Maternity Benefits

Sickness benefits: No statutory benefits are provided.

Maternity benefit: The minimum weekly wage for 8 weeks.

The minimum weekly wage is J$2,000.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its National Insurance Division and local offices.

Work Injury

Regulatory Framework

First law: 1937 (voluntary private insurance).

Current law: 1965, implemented in 1970.

Type of program: Social insurance system.

Coverage

Employed persons aged 18 to 70 (men) or aged 18 to

65 (women).

Exclusions: Domestic workers, unpaid family labor, the selfemployed, and members of the armed forces.

Source of Funds

Insured person: None.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None, except as an employer.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

75% of the minimum wage a week, payable after a 3-day waiting

period for up to 52 weeks.

The maximum benefit is J$1,740 a week.

The minimum wage is J$2,000.

Permanent Disability Benefits

Permanent disability pension: If between 95% and 100%

disabled, 75% of average insurable earnings up to J$290 a day.

The maximum pension is equivalent to 100% disability.

Partial disability: For an assessed degree of disability of at

least 10%, a percentage of the full pension in proportion to the

loss of earning capacity.

The minimum benefit is J$100 a week.

The maximum benefit is J$1,740 a week.

Workers’ Medical Benefits

Benefits include necessary medical, surgical, and rehabilitative

treatment, including appliances, hospitalization, and drugs.

Survivor Benefits

Survivor pension: The maximum work injury benefit rate is

payable for the first 52 weeks; thereafter, if the contribution

conditions are satisfied, a widow(er) pension is payable.

The minimum survivor pension is J$450 a week.

The maximum survivor pension is J$900 a week.

The pension is payable for 52 weeks after the insured’s death

to a widow of any age; if none, to a child or children or a

dependent mother aged 55 or older.

Funeral grant: A lump sum of J$30,000.

Administrative Organization

Ministry of Labor and Social Security administers the program

through its National Insurance Division and local offices.
108 ♦ SSPTW: The Americas, 2003

Mexico

Mexico

Exchange rate: U.S.$1.00 equals

10.32 new pesos (NP).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1943.

Current laws: 1973; 1991; 1992 (complementary mandatory

retirement savings); and 1995 (mandatory private insurance),

implemented in 1997.

Type of program: Social insurance and private insurance

system.

Note: As of July 1, 1997, all workers must join the private

insurance system, and the social insurance system is being

phased out. There are no contributors to the social insurance

system. At retirement, employees covered by the social

insurance system before 1997 can choose to receive benefits

from either the social insurance system or the private insurance

system.

Coverage

Private insurance: All workers entering the labor force on or

after January 1, 1997.

Voluntary coverage is to be made possible.

Social insurance: Employees and members of producers’,

agricultural, and credit union cooperatives who were first

covered before 1997.

Special systems for petroleum workers, public-sector

employees, and the military.

Source of Funds

Insured person: 1.125% of earnings for old-age benefits;

0.625% for disability and survivor benefits.

Employer: 3.15% of payroll; 1.75% for disability and survivor

benefits.

Government: A sum equal to 10.14% of the total employer

contributions for the old-age pension plus a flat-rate amount to

finance the guaranteed minimum pension.

Qualifying Conditions

Private insurance

Old-age pension: Age 65 with 1,250 weeks of contributions.

Early pension: Age 60 or older, no longer employed, and

1,250 weekly contributions; with less than 1,250 weekly

contributions, a lump sum is paid.

In the absence of a reciprocal agreement, the pension is

payable abroad for 2 years only.

Guaranteed minimum pension: Age 65 with 1,250 weeks of

contributions and the pension is less than the minimum

pension.

Disability pension: The insured has 150 weeks of

contributions and an assessed degree of disability of 75% or

more.

Survivor pension: The insured was receiving a disability

pension or had 150 weeks of contributions at the time of death.

The death must not be the result of an occupational injury.

Social insurance

Old-age pension: Age 65 with 500 weeks of contributions.

Early pension: Age 60 with 500 weeks of contributions.

Retirement from covered employment is required.

In the absence of a reciprocal agreement, the pension is

payable abroad for 2 years only.

Disability pension: 50% reduction in normal earning capacity

with 150 weeks of contributions. The insured may continue to

work in a different job.

Survivor pension: The insured was a pensioner or had

150 weeks of contributions at the time of death.

Funeral grant: Twelve weeks of contributions in the last

9 months or a pensioner at the time of death.

Old-Age Benefits

Old-age pension

Private insurance: The benefit is based on the value of

accumulated capital plus accrued interest. At retirement, the

insured can either purchase an annuity or make programmed

withdrawals based on life expectancy.

Guaranteed minimum pension: The guaranteed minimum

pension is equal to the minimum salary in July 1997 indexed to

prices.

Social insurance: 35% of average earnings during the last

250 weeks of contributions, plus 1.25% of earnings for every

year of contributions beyond 500 weeks. The pension is

increased by 15% if there are no dependents.

Dependents’ supplements: 15% of the insured’s pension for a

wife and 10% of the insured’s pension for each child under

age 16 (age 25 if a student, no limit if disabled). In the absence

of a wife or children, 10% for each dependent parent.

The minimum pension is 100% of the minimum salary in Mexico

City (1,309.50 NP in January 2003).

The maximum pension is 100% of earnings with at least

2,000 weeks of contributions.

Christmas bonus: One month’s pension.

Benefit adjustment: Pensions are adjusted according to

changes in the minimum wage.
SSPTW: The Americas, 2003 ♦ 109

Mexico

Permanent Disability Benefits

Disability pension

Private insurance: 35% of average earnings in the last

500 weeks of contributions, plus family allowances equal to

15% of the pension.

Benefit adjustment: Pensions are indexed to changes in the

national consumer price index.

Social insurance: 35% of average earnings during the last

250 weeks of contributions, plus 1.25% of earnings for every

year of contributions beyond 500 weeks. The pension is

increased by 15% if there are no dependents.

Constant-attendance allowance: 20% of the insured’s pension.

Dependents’ supplements: 15% of the insured’s pension for a

wife and 10% of the insured’s pension for each child under

age 16 (age 25 if a student, no limit if disabled). In the absence

of a wife or children, 10% for each dependent parent.

The minimum pension is 100% of the minimum salary in Mexico

City (1,309.50 NP in January 2003).

The maximum pension is 100% of earnings with at least

2,000 weeks of contributions.

Christmas bonus: One month’s pension.

Benefit adjustment: Pensions are adjusted according to

changes in the minimum wage.

Survivor Benefits

Survivor pension

Private insurance: 90% of the value of the private insurance

disability pension. The pension is payable to a widow or a

dependent disabled widower.

Remarriage settlement: If a widow remarries, she receives a

final lump-sum payment equal to 3 years’ pension.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 16 (age 25 if a student, no limit if disabled);

30% if a full orphan. Orphans also receive a final benefit equal

to 3 months of the insured’s pension.

Other eligible survivors (in the absence of the above): 20% of

the insured’s pension for each eligible survivor.

Benefit adjustment: Pensions are indexed to changes in the

national consumer price index.

Social insurance: 90% of the pension paid or accrued to the

insured. The pension is payable to a widow or a dependent

disabled widower.

Remarriage settlement: If a widow remarries, she receives a

final lump-sum payment equal to 3 years’ pension.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 16 (age 25 if a student, no limit if disabled);

30% if a full orphan. Orphans also receive a final benefit equal

to 3 months of the insured’s pension.

Other eligible survivors (in the absence of the above): 20% of

the insured’s pension for each eligible survivor.

Christmas bonus: One month’s pension.

The minimum pension is equal to 100% of the minimum salary

in Mexico City (1,309.50 NP in January 2003).

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: A lump sum equal to two times the monthly

salary.

Benefit adjustment: Pensions are adjusted according to

changes in the minimum wage.

Administrative Organization

Private insurance: Social Insurance Institute administers the

program.

National Commission for the Retirement Savings System

(CONSAR) supervises the pension fund management

companies (AFORES).

Social insurance: Social Insurance Institute administers the

program through regional and local boards in areas to which

coverage is extended.

Social Insurance Institute is managed by a general assembly,

technical council, oversight commission, and a director

general.

Sickness and Maternity

Regulatory Framework

First law: 1943.

Current law: 1995, implemented in 1997.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employees; members of producers’, agricultural, and credit

union cooperatives; pensioners; and dependents.

Source of Funds

Insured person

Cash benefits: 0.25% of the base salary.

Medical benefits: None, except when earnings are greater than

three times the minimum wage in Mexico City.

Employer

Cash benefits: 0.7% of the base salary.

Medical benefits: A flat rate of 17.15% of the minimum wage in

Mexico City per employee (plus an additional amount for each

employee earning more than three times the minimum wage in

Mexico City).

Government

Cash benefits: 0.05% of the base salary.

Medical benefits: 13.9% of the minimum wage in Mexico City.
110 ♦ SSPTW: The Americas, 2003

Mexico

The minimum earnings for contribution and benefit purposes

are 100% of the minimum wage in the region.

The maximum earnings for contribution and benefit purposes

are 25 times the minimum wage in Mexico City.

Qualifying Conditions

Cash sickness benefits: Four weeks of contributions

immediately before the onset of illness; for casual workers,

6 weeks of contributions during the last 4 months.

Cash maternity benefits: Thirty weeks of contributions

during the last 12 months.

Medical benefits: Currently insured, a pensioner, or an

eligible dependent.

Sickness and Maternity Benefits

Sickness benefit: 60% of average earnings, payable after a 3-

day waiting period for up to 52 weeks; may be extended in

some cases to 78 weeks.

The minimum benefit is 60% of the minimum salary.

The maximum benefit is 60% of earnings.

Maternity benefit: 100% of average earnings, payable for

42 days before and 42 days after the expected date of

childbirth. (If unable to work 42 days after childbirth, the

mother is eligible for a cash sickness benefit.)

Nursing allowance: Assistance in kind, payable for up to

6 months after childbirth.

A layette (clothing and other necessities for the newborn) is

also furnished.

Funeral grant: Two months’ minimum wage in Mexico City.

Workers’ Medical Benefits

Medical services are normally provided directly to patients

through the health facilities of the Social Insurance Institute.

Benefits include general and specialist care, surgery, maternity

care, hospitalization or care in a convalescent home, medicines,

laboratory services, dental care, and appliances. Benefits are

payable for 52 weeks; may be extended in some cases to

104 weeks.

Dependents’ Medical Benefits

Medical services are normally provided directly to patients

through the health facilities of the Social Insurance Institute.

Benefits include general and specialist care, surgery, maternity

care, hospitalization or care in a convalescent home, medicines,

laboratory services, dental care, and appliances. Benefits are

payable for 52 weeks; may be extended in some cases to

104 weeks. The wife of an insured man also receives postnatal

benefits in kind. Medical services are provided for dependent

children up to age 16 (age 25 if a student, no limit if disabled).

Administrative Organization

Social Insurance Institute administers the program through

regional and local boards.

Social Insurance Institute operates its own hospitals, clinics,

pharmacies, and other medical facilities and also contracts for

the use of some facilities.

Work Injury

Regulatory Framework

First law: 1943.

Current law: 1995, implemented in 1997.

Type of program: Social insurance system.

Coverage

Insured workers.

Source of Funds

Insured person: None.

Employer: Total cost; contributions vary according to the

total salary base and the assessed degree of risk.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

Temporary disability benefit: 100% of average earnings is

payable from the first day of disability until the insured is fully

recovered or declared permanently disabled.

The maximum benefit is 25 times the minimum wage in Mexico

City.

Occupational disease benefit: 100% of average earnings in

the last 52 weeks.

Permanent Disability Benefits

Permanent disability pension: 70% of earnings, if assessed

as 100% disabled.

Partial disability: A pension in proportion to the assessed

degree of disability is paid when the assessed degree of

disability is greater than 50%. If the assessed degree of

disability is 25% or less, the pension is paid as a lump sum

equal to 5 years’ pension. If the assessed degree of disability

is between 26% and 50%, the pension is paid as a percentage

of the full pension in proportion to the assessed degree of

disability or as a lump sum.

Christmas bonus: A supplement equal to 15 days’ pension is

paid if the assessed degree of disability is greater than 50%.
SSPTW: The Americas, 2003 ♦ 111

Mexico

Benefit adjustment: The pension is adjusted at the same time

as, and in the same proportion to, changes in the minimum

wage.

Workers’ Medical Benefits

Benefits include full medical, surgical, and hospital care;

medicines; rehabilitation; and appliances.

Survivor Benefits

Survivor pension: 40% of the insured’s total disability

pension is payable to a widow or a dependent disabled

widower.

Remarriage settlement: If a widow remarries, she receives a

final lump-sum settlement equal to 3 years’ pension.

Orphan’s pension: 20% of the insured’s pension for each

orphan (30% if a full orphan) under age 16 (age 25 if a student,

no limit if disabled). Orphans receive a final benefit equal to

3 months of the insured’s pension.

Other eligible survivors (in the absence of the above): 20%

of the insured’s pension.

The minimum pension is 100% of the minimum wage in Mexico

City.

The maximum pension is 100% of the insured’s total disability

pension.

Christmas bonus: A supplement equal to 15 days’ pension.

Funeral grant: Two months’ minimum wage in Mexico City.

Benefit adjustment: Pensions are adjusted according to

changes in the minimum wage in Mexico City.

Administrative Organization

Social Insurance Institute administers contributions and

benefits through regional and local boards.

Unemployment

Regulatory Framework

Labor law requires employers to pay dismissed employees a

lump sum equal to 3 months’ pay plus 20 days’ pay for each

year of service.

Social security pays an unemployment benefit of between 75%

and 95% of the old-age pension for unemployed persons

aged 60 to 64 (the benefit is paid under Old Age, Disability, and

Survivors).

Family Allowances

Regulatory Framework

First law: 1973.

Current law: 1995, implemented in 1997.

Type of program: Social insurance system.

Coverage

Child care: Dependent children of covered women, widowers,

or divorced working men.

Social benefits: Residents.

Family assistance: Persons assessed as needy.

Source of Funds

Insured person: None.

Employer: 1% of payroll.

Government: None.

Qualifying Conditions

Child care: The parent is in covered employment; may be

extended for up to 4 weeks after leaving employment. The

child must be aged 43 days but no older than age 4.

Social benefits: Resident.

Family assistance: Assessed as needy.

Family Allowance Benefits

Child care: The provision of child day care facilities.

Social benefits: Preventive health care.

Family assistance: Means-tested cash benefits.

Administrative Organization

Social Insurance Institute administers the program.
112 ♦ SSPTW: The Americas, 2003

Nicaragua

Nicaragua

Exchange rate: U.S.$1.00 equals 14.89 cordobas.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1955.

Current law: 1982.

Type of program: Social insurance system.

Note: A new system of mandatory individual accounts that

replaces the social insurance system will be implemented in

2004.

Coverage

All persons receiving remuneration for work or services

rendered.

Exclusions: Seasonal agricultural workers and members of the

armed forces.

Voluntary affiliation for the self-employed, workers who were

previously covered by the program, clergy, employers, and

unpaid family members working for family-owned companies.

Noncontributory system for miners, indigents, those who have

performed services for the country, and war victims.

Source of Funds

Insured person: 4% of earnings.

Employer: 6% of payroll.

Government: None.

The maximum earnings for contribution purposes are

35,000 cordobas.

All of the above contributions also finance family allowances.

The Nicaraguan Institute of Social Security finances any deficit

for the provision of war pensions and special pensions (see

source of funds under Work Injury, below).

Qualifying Conditions

Old-age pension: Age 60 (age 55 for miners, teachers, and the

physically or mentally impaired), with 750 weeks of

contributions. Qualifying conditions are reduced for those

who joined the program after age 45, with contributions

required only for half of the number of weeks from the date

coverage began until retirement age.

Disability pension: The loss of 67% of earning capacity in a

similar occupation (total disability); able to earn more than 52%

but less than 67% of usual earnings (partial disability), with

150 weeks of contribution in the last 6 years.

The disability pension is converted to the old-age pension at

age 60. If the insured is ineligible for the old-age pension, a

partial disability pension is increased to the value of the total

disability benefit at age 60 on the condition that the beneficiary

retire from all gainful employment.

Survivor pension: The insured person had 150 weeks of

contributions in the last 6 years.

Funeral grant: The insured person had 4 weeks of

contributions in the 26 weeks preceding death.

Noncontributory pension: War victims’ pensions are paid to

persons who have never contributed to the social insurance

system but who have performed services for the country;

special pensions are paid to other groups, including indigent

persons, miners, and public servants.

Old-Age Benefits

Old-age pension: 40% of the insured’s average earnings (45%

if average earnings are less than twice the minimum wage)

during the last 5, 4, or 3 years (based on a period of

contributions of 15, 20, or 25 years, respectively), plus 1.365%

(1.59% if average earnings are less than twice the minimum

wage) for every additional 50-week period of contributions.

An additional 1% of earnings is added for each year of work

after age 60, up to a maximum of 5%.

Dependents’ supplements: 15% of the old-age pension for a

wife or companion; 10% each for children under age 15 (age 21

if student, no limit if disabled); 10% for uninsured parents over

age 60 or disabled.

The maximum pension is 80% of average earnings if the

insured’s average earnings are more than twice the minimum

salary; 100% if the insured’s average earnings are less than

twice the minimum salary.

The minimum monthly benefit is 954 cordobas.

Benefit adjustment: Periodic adjustment of benefits for wage

changes, if financial conditions permit.

Noncontributory pension: Periodic war victims’ pensions and

special pensions are provided.

Permanent Disability Benefits

Disability pension: 40% of the insured’s average earnings

(45% if average earnings are less than twice the minimum

wage) during the last 5, 4, or 3 years (based on a period of

contributions of 15, 20, or 25 years, respectively), plus 1.365%

(1.59% if average earnings are less than twice the minimum

wage) for every additional 50-week period of contributions.

Constant-attendance allowance: 20% of the total disability

pension.

Dependents’ supplements (total disability): 15% of the

pension for a wife or companion; 10% each for children under

age 15 (age 21 if student, no limit if disabled); 10% for

uninsured parents over age 60 or disabled.

Partial disability: 50% of the total disability pension.

Dependents’ supplements (partial disability): Supplements are

paid at half the rate awarded for total disability.
SSPTW: The Americas, 2003 ♦ 113

Nicaragua

The maximum partial disability pension is 40% of average

earnings.

The maximum pension is based on the minimum salary in the

worker’s employment group.

Benefit adjustment: Periodic adjustment of pensions for wage

changes, if financial conditions permit.

Noncontributory pension: Periodic war victims’ pensions and

special pensions are provided for total and partial disability.

Survivor Benefits

Survivor pension: 50% of the insured’s pension, payable to a

widow aged 45 or older or disabled or to a dependent disabled

widower. A pension is payable to a widow under age 45 for

2 years or for as long as she is caring for a child receiving an

orphan’s pension.

Orphan’s pension: 25% of the insured’s pension for each

orphan under age 15 (age 21 if a student; no limit if disabled);

50% if a full orphan.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: The cost of the funeral service or an amount

equal to 50% of the insured’s monthly salary.

Benefit adjustment: Periodic adjustment of pensions for wage

changes, if financial conditions permit.

Noncontributory pension: Periodic war victims’ pensions and

special pensions are provided for spouses, orphans, and

dependent parents.

Administrative Organization

Managed by technical and managing councils, the Nicaraguan

Institute of Social Security administers the contributory and

noncontributory programs.

Sickness and Maternity

Regulatory Framework

First law: 1955.

Current law: 1982 (national health service).

Type of program: Dual social insurance (cash benefits) and

universal (medical care) system.

Coverage

Cash benefits: All persons receiving remuneration for work

or services rendered.

Exclusion: Members of the armed forces.

Voluntary affiliation for the self-employed, workers who were

previously covered by the program, clergy, employers,

ranchers, and unpaid family members working for family-owned

companies.

Medical benefits: Insured persons and their dependents (the

wife of an insured man receives prenatal and postnatal care;

benefits for children up to age 6) and old-age pensioners.

Source of Funds

Insured person: 2.25% of earnings.

Employer: 6% of payroll.

Government: 0.25% of earnings (plus employer contributions

for public-sector employees).

Qualifying Conditions

Cash sickness benefits: Eight weeks of contributions in the

last 22 weeks. Insured persons with 8 weekly contributions in

the last 22 weeks who become unemployed are also covered.

Cash maternity benefits: Sixteen weeks of contributions in

the 39 weeks prior to the birth. Insured women with 8 weekly

contributions in the last 22 weeks who become unemployed are

also covered.

Medical benefits: At least 4 weeks of contributions, even if

they are not consecutive; receiving a contributory or

noncontributory old-age pension.

Sickness and Maternity Benefits

Sickness benefit: 60% of average earnings in the last

8 weeks. The benefit is payable after a 3-day waiting period

(waived if hospitalized) for up to 52 weeks.

Maternity benefit: 60% of average earnings in the last

8 weeks, payable according to eight wage classes. The benefit

is payable for 4 weeks before and 8 weeks after the expected

date of childbirth.

Nursing allowance: Forty-five pounds of milk during the first

6 months of the child’s life.

Workers’ Medical Benefits

Medical services are provided directly to patients depending

on available resources. There is no duration to limit.

Dependents’ Medical Benefits

Medical services are provided directly to patients depending

on available resources. The wife of an insured man receives

prenatal and postnatal care. Benefits are provided for children

up to age 6. Old-age pensioners (contributory and

noncontributory) receive medical care for 77 illnesses and

7 types of surgical treatment.

Administrative Organization

Managed by technical and managing councils, the Nicaraguan

Institute of Social Security administers the program.

Medical care and cash benefits are delivered through public

and private institutions.
114 ♦ SSPTW: The Americas, 2003

Nicaragua

Work Injury

Regulatory Framework

First law: 1945 (labor code).

Current law: 1982.

Type of program: Social insurance system.

Coverage

All persons receiving remuneration for work or services

rendered.

Source of Funds

Insured person: None.

Employer: 1.5% of payroll (plus 1.5% of payroll for war

victims’ pensions).

Government: None, except as an employer.

The maximum earnings for contribution purposes are

35,000 cordobas.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Sickness and Maternity Benefits

60% of earnings in the last 8 weeks of contributions. The

benefit is payable from the day after the onset of disability

until medical care terminates or until the insured person is

declared permanently disabled. (The employer pays the

benefit for the first day of disability.)

Permanent Disability Benefits

Permanent disability pension: 60% of earnings if the insured

person has a wife and two or more children; 50% if there are no

dependents.

Partial disability: A percentage of the full pension in

proportion to the assessed degree of disability.

Noncontributory pension: Special pensions are provided for

total and partial disability for prescribed categories of worker.

Workers’ Medical Benefits

Medical care is provided to treat work injuries and

occupational diseases.

Survivor Benefits

Survivor pension: The minimum pension is 50% of the

insured’s average salary or base salary used to calculate the

permanent disability pension. The pension is payable to a

widow or a dependent disabled widower.

Orphan’s pension: 25% of the insured’s pension for each

orphan under age 15 (age 21 if a student; no limit if disabled);

50% for a full orphan.

Other dependent survivors (in the absence of the above):

25% of the insured’s pension each.

The maximum pension is 100% of the insured’s pension.

Funeral grant: The cost of the funeral service.

Administrative Organization

Managed by technical and managing councils, the Nicaraguan

Institute of Social Security administers the contributory and

noncontributory programs.

Family Allowances

Regulatory Framework

First and current law: 1982.

Type of program: Social insurance system.

Coverage

All persons receiving remuneration for work or services

rendered.

Exclusions: Seasonal agricultural workers and members of the

armed forces.

Voluntary affiliation for the self-employed, workers who were

previously covered by the program, clergy, employers, and

unpaid family members working for family-owned companies.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Family allowances (earnings-tested): The child must be

under age 15; age 21 if a student.

Family Allowance Benefits

Family allowances (earnings-tested): Allowances vary

according to earnings and the age of the child.

Administrative Organization

Managed by technical and managing councils, the Nicaraguan

Institute of Social Security administers the program.
SSPTW: The Americas, 2003 ♦ 115

Panama

Panama

Exchange rate: U.S.$1.00 equals 1 balboa.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1941.

Current laws: 1954 and 1991.

Type of program: Social insurance system.

Coverage

Employees and domestic workers.

Voluntary coverage for the self-employed.

All foreign workers are covered except for those working in

Panama for less than 2 months under a foreign employment

contract.

Public-sector employees are covered under the general system

as well as a special system.

Exclusions: Agricultural workers employed for less than

3 months annually and family members working for a family

business.

Occasional and seasonal workers are to be covered under

subsequent regulation.

Source of Funds

Insured person: 6.75% of earnings.

Employer: 2.75% of payroll.

Government: A percentage of contributions (1.04% of payroll

for the administration of old-age, disability, and survivor

benefits; sickness and maternity benefits; and work injury

benefits) and the proceeds of an earmarked tax on alcohol, plus

no less than 20.5 million balboas a year.

Qualifying Conditions

Old-age pension: Age 62 (men) or age 57 (women) with

180 months of contributions. Retirement is necessary.

Disability pension: A loss of 2/3 of earning capacity, with

36 months of contributions including 18 months during the last

3 years; a total of 180 months of contributions.

Disability grant: The insured does not meet the qualifying

conditions for a full pension but has at least 12 months of

contributions, including 6 contributions in the year prior to the

onset of disability.

Survivor pension: The insured met the qualifying conditions

for the disability pension or was a pensioner at the time of

death.

Old-Age Benefits

Old-age pension: 60% of average earnings during the best

7 years of earnings, plus 1.25% of earnings for every 12-month

period of contributions in excess of 180 months.

Deferred pension: An additional 2% of earnings for every

12-month period of contributions after the retirement age.

Dependents’ supplements (at the normal retirement age):

Twenty balboas a month for a wife, 10 balboas for each child

under age 18 (no limit if disabled); up to a maximum of

100 balboas.

The minimum monthly pension is 175 balboas.

The maximum monthly pension with 25 years of coverage and

average earnings of 1,500 balboas a month is 1,500 balboas.

The pension plus dependents’ supplements cannot exceed

100% of average earnings used for the pension calculation.

Benefit adjustment: Pensions are adjusted on an ad hoc basis

depending on economic conditions.

Permanent Disability Benefits

Disability pension: 60% of average earnings during the best

7 years of earnings, plus 1.25% of earnings for every 12-month

period of contributions in excess of 180 months. If total

coverage is less than 7 years, the pension is based on 60% of

average earnings during the period credited.

Dependents’ supplements: Twenty balboas a month for a wife,

10 balboas for each child under age 18 (no limit if disabled); up

to a maximum of 100 balboas.

The minimum monthly pension is 175 balboas.

Disability grant: A lump sum is paid equal to 1 month’s

pension for every 6-month period of contributions.

Benefit adjustment: Pensions are adjusted on an ad hoc basis

depending on economic conditions.

Survivor Benefits

Survivor pension: 50% of the pension paid or accrued to the

insured is paid to a widow age 57 or disabled or caring for a

child. A limited pension is paid to other widows for 5 years

only. The pension is also payable to a dependent disabled

widower.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 14 (age 18 if a student; no limit if disabled);

50% if a full orphan.

Other dependents (in absence of above): The insured’s

mother or aged or disabled father receives 30% of the insured’s

pension; eligible brothers and sisters receive 20% of the

insured’s pension until age 14.

The maximum survivor pension is 100% of the insured’s

pension.
116 ♦ SSPTW: The Americas, 2003

Panama

Funeral grant: 300 balboas.

Benefit adjustment: Pensions are adjusted on an ad hoc basis

depending on economic conditions.

Administrative Organization

Ministry of Health is responsible for national health policy.

Managed by a board of directors with tripartite representation

and a director general with an advisory board for technical

advice, the Social Insurance Fund administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1941.

Current law: 1954.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employees in private and public employment and domestic

workers.

Voluntary coverage for the self-employed.

Pensioners are covered for medical benefits.

Exclusions: Agricultural workers employed for less than

3 months annually and family members working for a family

business.

Temporary workers and seasonal workers will be covered by

subsequent regulations.

Source of Funds

Insured person: 0.5% of earnings. Pensioners contribute

6.75% of the pension.

Employer: 8% of payroll.

Government: A percentage of contributions (1.04% of payroll

for the administration of old-age, disability, and survivor

benefits; sickness and maternity benefits; and work injury

benefits) and the proceeds of an earmarked tax on alcohol.

Qualifying Conditions

Cash sickness benefits: Six months of contributions during

the last 9 months.

Cash maternity benefits: Nine months of contributions

during the 24 months preceding the seventh month of

pregnancy.

Medical benefits: Currently covered or a pensioner. In case

of unemployment, coverage continues for 3 months after the

end of employment (24 months for those with 180 months of

contributions).

Sickness and Maternity Benefits

Sickness benefit: 70% of average earnings during the

previous 2 months. The benefit is payable after a 3-day

waiting period for up to 52 weeks for one illness.

Maternity benefit: 100% of average earnings in the last

9 months, payable for up to 6 weeks before and 8 weeks after

the expected date of childbirth.

Workers’ Medical Benefits

Benefits include general and specialist care, surgery,

hospitalization, laboratory services, medicines, dental care, and

maternity care.

Medical services are normally provided directly through the

facilities of the Social Insurance Fund or are provided by the

Ministry of Health, with the cost reimbursed. In special cases,

including those in which the Fund or Ministry have no

facilities, the cost of private care obtained in the country or

abroad may be reimbursed in part or in full, with the

authorization of the Fund.

There is no limit to duration if the medical service is necessary.

Dependents’ Medical Benefits

Benefits include general and specialist care, surgery,

hospitalization, laboratory services, medicines, and dental care.

Benefits are provided to the insured’s wife and children under

age 18 (age 25 if a student or disabled), a dependent mother, a

disabled father, or parents over age 60.

Administrative Organization

Ministry of Health is responsible for national health policy.

Managed by a board of directors with tripartite representation

and a director general with an advisory board for technical

advice, the Social Insurance Fund administers the program.

Social Insurance Fund operates its own hospitals and other

medical facilities in larger cities.

Work Injury

Regulatory Framework

First law: 1916.

Current law: 1970.

Type of program: Employer-liability system, involving

compulsory insurance with a public carrier.

Coverage

Employees in private and public employment.
SSPTW: The Americas, 2003 ♦ 117

Panama

Source of Funds

Insured person: None.

Employer: Total cost met through the payment of insurance

premiums. The cost of premiums varies with the assessed

degree of risk. The average premium is 1.7% of payroll.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Permanent Disability Benefits

Permanent disability pension: 60% of earnings, if 100%

disabled.

The minimum monthly pension is 175 balboas.

The maximum monthly pension is 1,000 balboas.

Partial disability: The pension is in proportion to the assessed

degree of disability. The pension may be increased if the

assessed degree of disability is greater than 35%; may be paid

as a lump sum if the assessed degree of disability is 35% or

less.

Benefit adjustment: Benefits are reviewed every 2 years.

Workers’ Medical Benefits

General and specialist care, surgery, medicines, hospitalization,

and appliances.

Survivor Benefits

Survivor pension: A widow or a disabled widower receives

25% of the insured’s earnings for life; 30% if the survivor is the

sole beneficiary or is disabled.

Orphan’s pension: 15% of the insured’s earnings for one

orphan, 25% for two, 35% for three, and 40% for four or more

orphans under age 18. Full orphans receive 15% each for two

or more children under age 18.

Other dependents (in order of priority): The insured’s

mother may receive between 20% and 30% of the insured’s

earnings in the absence of a surviving wife or children. The

pension is payable for 10 years. Brothers or sisters under

age 18 (no limit if disabled) and other aged or disabled or older

relatives up to great grandparents receive 10% each, up to a

maximum of 30%. The pension is payable for 6 years.

The maximum total survivor pension is 75% of the insured’s

earnings. Pensions that take the total above the maximum are

reduced proportionately.

Funeral grant: 300 balboas.

Administrative Organization

Managed by a board of directors with tripartite representation

and a director general with an advisory board for technical

advice, the Social Insurance Fund administers the program.

Ministry of Health is responsible for national health policy.

Unemployment

Regulatory Framework

No statutory benefits are provided. (Under the 1972 Labor

Code, workers are entitled to a severance payment at the end

of the labor contract.)
118 ♦ SSPTW: The Americas, 2003

Paraguay

Paraguay

Exchange rate: U.S.$1.00 equals 6,250 guarani.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1943.

Current laws: 1950, 1973, and 1992.

Type of program: Social insurance system.

Coverage

Employed persons.

Special systems for railroad employees, bank employees,

elected parliamentary representatives, and public-sector

employees.

Source of Funds

Insured person: 9% of earnings. Pensioners contribute 5% of

pensions.

Employer: 14% of payroll.

Government: 1.5% of earnings.

The minimum earnings for contribution purposes are equal to

the minimum wage.

All of the above contributions also finance sickness and

maternity benefits and work injury benefits.

Qualifying Conditions

Old-age pension: Age 60 (men and women) with 25 years of

contributions or age 55 (men and women) with 30 years of

contributions.

Disability pension: The loss of 2/3 of earning capacity with

150 weeks of contributions and under age 55; between

150 weeks and 250 weeks of contributions if under age 60;

between 250 weeks and 400 weeks of contributions if under

age 65.

Survivor benefit: The insured was a pensioner at the time of

death or had 750 weeks of contributions.

Survivor grant: The insured had less than 750 weeks of

contributions.

Funeral grant: Paid to the person who pays for the funeral.

Old-Age Benefits

Old-age pension: 100% of average earnings during the last

3 years or 80% of average earnings during the last 3 years plus

4% for every year over age 55 up to age 59.

The maximum old-age pension is 300 times the daily minimum

wage.

Benefit adjustment: Benefits are adjusted annually according

to changes in the cost-of-living index.

Permanent Disability Benefits

Disability pension: The benefit is equal to 50% of average

earnings in the last 3 years, plus 1.5% of average earnings for

every 50-week period of contributions beyond 150 weeks up to

a maximum of 100%. The benefit calculation is based on the

assessed degree of disability (from 70% to 100%) and the

number of years of contributions (from 3 years to 20 years).

The maximum disability pension is 300 times the daily minimum

wage.

Survivor Benefits

Survivor pension: 60% of the pension paid or payable to the

insured. The pension is payable to a widow(er), unmarried

children under age 18 (any age if disabled), dependent parents,

and a partner if he or she cohabited with the insured for at least

2 years and had children (5 years if there were no children).

The pension is split in half between the spouse and children.

A widow(er) or companion under age 40 receives a benefit

equal to three times the insured’s yearly pension; if the spouse

or partner remarries or cohabits with another person, the

benefit is equal to two times the insured’s yearly pension.

The maximum survivor pension is 250 times the daily minimum

wage.

Survivor grant: A lump sum equal to 1 month’s minimum

wage for every year of contributions.

Funeral grant: 75% of the daily minimum wage.

Administrative Organization

Managed by a tripartite council and a director general, the

Social Insurance Institute administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1943.

Current laws: 1950, 1965, 1973, and 1992.

Type of program: Social insurance system. Cash and medical

benefits.

Note: This information is from 1999.

Coverage

Employed persons, including domestic servants, teachers in

government and private schools, and university professors.

Voluntary coverage for the self-employed.

Pensioners are covered for medical benefits.

Special systems for railroad, banking, and public-sector

employees.
SSPTW: The Americas, 2003 ♦ 119

Paraguay

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above. (Pensioners contribute 5% of

pensions. Teachers in public schools and university

professors contribute 5.5% of earnings.)

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Cash sickness benefits: Six weeks of contributions in the

last 4 months.

Cash maternity benefits: Six weeks of contributions in the

last 120 days. (Women cannot receive cash maternity benefits

and cash sickness benefits at the same time.)

Medical and maternity benefits: Currently insured.

Sickness and Maternity Benefits

Sickness benefit: 50% of average earnings during the last

4 months. The benefit is payable after a 2-day waiting period

for up to 26 weeks; may be extended to 50 weeks in special

cases. The benefit is reduced by half during periods of

hospitalization if there are no dependents.

Maternity benefit: 50% of earnings, payable for 3 weeks

before and 6 weeks after the expected date of childbirth.

Milk vouchers: Milk vouchers are provided for up to

8 months, if the mother is unable to nurse the child.

Workers’ Medical Benefits

Medical services are provided directly to patients through the

facilities of the Social Insurance Institute. Benefits include

general and specialist care, hospitalization, laboratory services,

medicines, prosthetics, dental care (with 8 weeks of recent

contributions), and maternity care. The duration of benefits is

26 weeks for any one illness; may be extended to 52 weeks in

special cases.

Dependents’ Medical Benefits

Dependents include a wife, unmarried children under age 16,

disabled children, and dependent parents over age 60. Medical

services are provided directly to patients through the facilities

of the Social Insurance Institute. Benefits include general and

specialist care, hospitalization, laboratory services, medicines,

prosthetics, dental care (with 8 weeks of recent contributions),

and maternity care. The duration of benefits is 26 weeks for

any one illness; may be extended to 52 weeks in special cases.

Administrative Organization

Social Insurance Institute administers the program.

Social Insurance Institute operates its own clinics and

hospitals.

Work Injury

Regulatory Framework

First law: 1927.

Current laws: 1950, 1973, and 1992.

Type of program: Social insurance system.

Coverage

Employed persons, including domestic servants and teachers

in private schools.

Voluntary coverage is possible for the self-employed.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

75% of average earnings during the last 4 months or the total

contribution period if shorter. The benefit is payable after a 3-

day waiting period for up to 50 weeks.

Permanent Disability Benefits

Permanent disability pension: 60% of average earnings

during the last 3 years, if totally disabled. If the assessed

disability is caused by an occupational illness, the pension

varies between 22% and 100% of average earnings during the

last 3 years, depending on the length of the contributions

period and the assessed degree of disability.

Total disability supplement: 20% of average earnings during

the last 3 years, plus 0.5% for every year of coverage beyond

3 years.

Partial disability: If the assessed degree of disability is more

than 30%, the pension is equal to 60% of wage loss, according

to the schedule in law. If the value of the pension is less than

30% of the total disability pension, the pension is paid as a

lump sum equal to 5 years’ pension.
120 ♦ SSPTW: The Americas, 2003

Paraguay

Partial disability supplement: The total disability supplement is

reduced in proportion to the assessed degree of disability.

Workers’ Medical Benefits

Benefits include general and specialist care, hospitalization,

medicines, and appliances.

Survivor Benefits

Survivor pension: 40% of the insured’s total disability

pension, payable to a widow or a dependent disabled widower.

Orphan’s pension: 20% of the insured’s total disability

pension for each child under age 16 (no limit if disabled).

Other eligible survivors (in absence of the above): 20% of

the insured’s pension for each dependent parent.

Survivor supplement: 75% of the insured’s disability

supplement is paid to eligible survivors.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: The grant varies according to locality.

Administrative Organization

Social Insurance Institute administers contributions and

benefits.

Family Allowances

Regulatory Framework

No statutory benefits are provided. (The 1993 labor code

requires employers to provide specified maternity benefits and

family allowance benefits.)

Note: This information is from 1999.
SSPTW: The Americas, 2003 ♦ 121

Peru

Peru

Exchange rate: U.S.$1.00 equals

3.49 nuevos soles.

Old Age, Disability, and Survivors

Regulatory Framework

First laws: 1936 (wage earners) and 1962 (salaried employees).

Current laws: 1973 (unified social security retirement), 1991

(private pensions), and 1995 (private pensions).

Type of program: Dual social insurance and private insurance

system.

Note: When public- and private-sector employees enter the

workforce, they may choose between the private insurance

system (SPP) and the public social insurance system (SNP).

SNP members may switch to the SPP but may not switch back.

Coverage

Social insurance (SNP): Wage earners and salaried

employees in private and public sectors, employees of workerowned and cooperative enterprises, teachers, self-employed

drivers, artists, domestic workers, wage earners and the selfemployed in the agricultural sector.

Special systems for fishermen, stevedores, and employees not

covered under the SNP.

Voluntary coverage for the self-employed, for those who are

economically active but no longer in covered employment (a

minimum of 18 months’ previous coverage is required), and

housewives.

Private insurance (SPP): Employed persons.

Voluntary coverage for the self-employed.

Source of Funds

Social insurance (SNP)

Insured person: 13% of earnings.

Employer: None.

Government: None; the government finances the minimum

pension as well as special subsidies needed to finance the

program.

The minimum earnings for contribution purposes are equal to

the legal minimum wage; for domestic workers, 33.3% of the

legal minimum wage.

There are no maximum earnings for contribution purposes.

Private insurance (SPP)

Insured person: 8% of earnings for old-age benefits, plus an

additional amount for disability and survivor insurance and

administrative fees.

Employer: None.

Government: The government finances the guaranteed

minimum pension.

Qualifying Conditions

Social insurance (SNP)

Old-age pension: Men born up to December 18, 1932, and

women born up to December 18, 1937, with 15 years and

13 years of contributions, respectively. Men and women born

after these respective dates with 20 years of contributions and

aged 65.

Disability pension: A loss of 2/3 of earning capacity and

employed at the onset of disability; has 36 months of

contributions with 18 months in last 36 months, 12 months of

contributions in the last 36 months with 3 to 15 years of

contributions, or 15 or more years of contributions.

Survivor pension: The insured was a pensioner or met the

qualifying conditions for a pension at the time of death.

Private insurance (SPP)

Old-age pension: Age 65; a pension is payable at any age if

the individual account has accumulated assets that will replace

at least 50% of average indexed earnings in the last 10 years

and provide at least 110% of the minimum benefit at the date of

the payment.

Disability pension: A loss of 2/3 of earning capacity.

Survivor pension: The insured was a pensioner or met the

qualifying conditions for a pension at the time of death.

Old-Age Benefits

Social insurance (SNP)

Old-age pension: Men born up to December 18, 1932, and

women born up to December 18, 1937, receive 50% of the

reference salary, plus 2% (men) or 2.5% (women) for every

additional year of contributions beyond 15 and 13,

respectively. The reference salary is equal to average earnings

in the last 12 months.

Reduced pension: 1/30 (men) or 1/25 (women) of the reference

salary for between 5 and 14 years of contributions (men) or 5

and 12 years of contributions (women).

Men born after December 18, 1932 and women after December

18, 1937, receive 50% of the reference salary, plus 4% for every

additional year of contributions beyond 20. The reference

salary for between 20 and 25 years of contributions is the

average earnings of the last 5 years; for between 25 and

30 years of contributions, average earnings in the last 4 years;

for more than 30 years of contributions, average earnings in

the last 3 years.

Dependents’ supplements: All social insurance pensioners are

entitled to an increment of between 2% and 10% for a spouse

and 2% and 5% for each child.

The minimum pension with up to 5 years of contributions is

145 nuevos soles; with 6 to 9 years of contributions,
122 ♦ SSPTW: The Americas, 2003

Peru

173 nuevos soles; with 10 to 19 years, 200 nuevos soles; and

with more than 20 years, 250 nuevos soles.

The maximum pension is 100% of the reference salary but not

more than 600 nuevos soles.

Constant-attendance supplement: An amount equal to the

minimum wage.

Benefit adjustment: Pensions are adjusted according to costof-living changes in Lima.

Private insurance (SPP)

Old-age pension: The value of retirement savings varies

according to the insured’s contributions to an individual

account plus accrued earnings, minus administrative fees.

Retirement savings can be used to make programmed

withdrawals from the individual’s account or to purchase a

personal annuity, a joint survivor life annuity, or a deferred

annuity accompanied by temporary periodic withdrawals.

Guaranteed minimum pension: For insured persons born no

later than 1945 who satisfy the minimum requirements for

contributions.

Permanent Disability Benefits

Social insurance (SNP)

Disability pension: 50% of the reference salary, plus 1.5% for

each year of contributions over 3 years. For a contribution

period of between 1 and 3 years, 1/6 of average earnings for

each year of contributions.

Reference salary: The reference salary is equal to average

earnings in the last 12 months; for voluntarily insured selfemployed persons, the reference salary is average earnings in

the last 60 months.

The minimum pension is three times the minimum wage.

The maximum pension is 80% of total earnings.

Dependents’ supplements: 2% to 10% of earnings for a

spouse and 2% to 5% for each child. The amount is reduced if

concurrent earnings and pension income exceed the insured’s

former average earnings.

Constant-attendance supplement: An amount equal to the

minimum wage.

Benefit adjustment: Pensions adjusted according to cost-ofliving changes in Lima.

Private insurance (SPP)

Disability pension: In addition to the accumulated assets of

the individual account, the private pension fund administrator

purchases a group insurance product on behalf of the fund

member. The pension is calculated on the basis of the

insured’s average monthly salary and is proportional to the

assessed degree of disability.

Survivor Benefits

Social insurance (SNP)

Survivor pension: 50% of the pension paid or accrued to the

insured is payable to a widow or a disabled widower.

The minimum pension is three times the minimum wage.

Orphan’s pension: 20% of the pension is payable to the

widow for each orphan (40% is payable to each full orphan)

under age 18 (age 21 if a student, no limit if disabled).

The minimum orphan’s pension is 1.5 times the minimum wage.

Other eligible survivors (in the absence of the above):

Dependent parents receive 20% each.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: Up to five times the minimum wage.

Constant-attendance supplement: An amount equal to the

minimum wage, if disabled.

Benefit adjustment: Pensions are adjusted according to costof-living changes in Lima.

Private insurance (SPP)

Survivor pension: In addition to the accumulated assets of the

individual account, the private pension fund administrator

purchases a group insurance product on behalf of the fund

member. The pension for a spouse, orphans, and dependent

parents is calculated on the basis of the insured’s average

monthly salary, according to the schedule in law. The group

insurance also covers the cost of funeral grants.

Administrative Organization

Social insurance (SNP)

Comptroller General of the Republic provides general

supervision.

Office of Social Security Normalization administers the

program.

Private insurance (SPP)

Superintendent of Banks and Insurance is responsible for the

licensing and supervision of pension fund administrators and

insurance companies.

Investment Classification Commission assesses investment

risks.

Sickness and Maternity

Regulatory Framework

First laws: 1936 (wage earners) and 1948 (salaried employees).

Current laws: 1979 (social insurance), 1991 (private

pensions), 1997 (modernizing health), and 1999 (social security

health insurance, or EsSALUD).
SSPTW: The Americas, 2003 ♦ 123

Peru

Type of program: Social insurance and private insurance

system. Cash and medical benefits.

Coverage

EsSALUD (Social Security Health Insurance)

Employed persons in the public and private sectors, employees

of worker-owned and cooperative enterprises, professional

artists, self-employed drivers, domestic workers, pensioners,

self-employed persons and other persons who do not meet the

requirements for regular affiliation, employed and selfemployed persons in agriculture, spouses or partners of

insured persons, and children.

Exclusions: Employees whose employers provide health

services directly.

Special systems for fishermen, stevedores, and employees not

covered under the national system.

EPS (Private health care provider)

All persons opting out of EsSALUD and their dependents.

Source of Funds

Insured person: None; pensioners contribute 4% of their

pension.

Employer: 9% of payroll. (Employers providing health

services directly to their employees, or who use services

provided under contract by a private health care provider

(EPS), receive a 25% credit toward the cost of the

contribution.)

Government: None.

Qualifying Conditions

Sickness cash benefits: Three months’ consecutive

contributions or 4 months of contributions in the 6 months

preceding the onset of illness.

Maternity care and cash benefits: Covered when the child

was conceived.

Sickness and Maternity Benefits

Sickness benefit: 100% of average daily earnings in the last

4 calendar months, payable after a 20-day waiting period for up

to 11 months and 10 days. The employer pays the full salary

during the waiting period.

Maternity benefit: 100% of earnings, up to a maximum. The

benefit is payable for 45 days before and 45 days after the

expected date of childbirth.

Nursing allowance: Twice the minimum wage (820 nuevos

soles from 8 to 14 months of age).

Funeral grant: 2,070 nuevos soles.

Workers’ Medical Benefits

Benefits include general, specialist, maternity, and dental care;

hospitalization; laboratory services; appliances; medicines;

rehabilitation; health education; preventative care; and

immunization.

Benefits are provided for up to 12 months (may be extended in

certain cases).

Employees have the option of receiving medical benefits from

EsSALUD or from an EPS provider. In order to opt for an EPS

provider, 51% of employees must agree to the change.

Medical benefits provided by an EPS provider require a

copayment of 2% of monthly income, up to a maximum of 10%

of income or 240 nuevos soles, whichever is lower. The

insured may purchase additional coverage.

Dependents’ Medical Benefits

The spouse or partner of the insured receives the same

benefits for sickness and maternity as the insured. Children

under age 18 (no limit if disabled) receive medical care.

Administrative Organization

Comptroller General of the Republic provides general

supervision.

Social Security Health Insurance (EsSALUD) administers the

program.

Private health care providers (EPS) under contract provide

complementary and private medical care.

Work Injury

Regulatory Framework

First laws: 1911 (work injury) and 1935 (occupational

diseases).

Current law: 1997.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employed persons in the public and private sectors, including

fishermen, domestic workers, and journalists working for one

employer, and employees of worker-owned and cooperative

enterprises.

Source of Funds

Insured person: None.

Employer: 1.0% to 12.2% of payroll, according to the

assessed degree of risk and the accident rate.

Government: Contributes as an employer.

Maximum earnings for benefit purposes are equal to six times

the local minimum wage.
124 ♦ SSPTW: The Americas, 2003

Peru

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

100% of wages, payable after a 20-day waiting period for up to

11 months and 10 days or 340 days. The employer pays the

full salary during the waiting period.

The maximum duration of benefit is 18 months in a 36-month

period.

Permanent Disability Benefits

Permanent disability pension: 80% of average wages (100%

in cases requiring constant attendance) if totally disabled (an

assessed degree of disability of more than 65%).

Partial disability: The pension is proportionately reduced for

an assessed degree of disability of between 40% and 65%. A

lump sum of 2 years’ pension is paid if the assessed degree of

disability is less than 40%.

Workers’ Medical Benefits

Benefits include necessary medical, surgical, and hospital care

and appliances, until full recovery or certification of permanent

disability.

Survivor Benefits

Survivor pension: 50% of the insured’s total disability

pension, payable to a widow or a disabled widower.

Orphan’s pension: 25% of the insured’s pension for each

orphan under age 18 (age 23 if a student).

Other eligible survivors (in the absence of the above): 25%

of the insured’s pension for each parent.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant: 2,070 nuevos soles.

Administrative Organization

Comptroller General of the Republic provides general

supervision.

Office of Social Security Normalization (ONP) administers the

program.

Unemployment

Regulatory Framework

No statutory benefits are provided. (Under the Labor Code,

private-sector employees are entitled to a severance payment

at the end of the labor contract.)
SSPTW: The Americas, 2003 ♦ 125

Saint Kitts and Nevis

Saint Kitts and Nevis

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1968 (provident fund).

Current laws: 1977 (social security), implemented in 1978 with

1996 and 2002 amendments; and 1998 (social development

assistance).

Type of program: Dual social insurance and social assistance

system.

Coverage

Social insurance: Employed and self-employed persons,

including public-sector employees and apprentices, aged 16

to 62.

Voluntary coverage for those who cease to be compulsorily

covered and who have at least 2 years of contributions.

Exclusions: Unpaid family labor.

Social assistance: Resident elderly or disabled persons.

Source of Funds

Social insurance

Insured person: 5% of wages; the self-employed contribute

10% of earnings according to earnings categories ranging from

E.C.$200 to E.C.$1,350 a week.

Employer: 5% of payroll.

Government: None, except as an employer.

The maximum monthly earnings for contribution and benefit

purposes are E.C.$6,500.

All of the above contributions also finance cash benefits for

sickness and maternity.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Old-age pension: Age 62 with a total of 500 weeks of paid or

credited contributions, including 150 weeks of paid

contributions.

Old-age grant: Age 62 and does not qualify for an old-age

pension.

Old-age social assistance (means-tested): Aged 62 or

older, not in gainful employment, and in need of financial

assistance.

Disability pension: Less than age 62 with 150 weeks of paid

contributions.

Disability social assistance (means-tested): Less than

age 62 and assessed as disabled.

Survivor pension: 150 weeks of paid contributions.

Survivor grant: The insured person did not qualify for a

pension.

Old-Age Benefits

Old-age pension: 30% of the average annual wage (best 3 out

of the last 15 contribution years), plus 2% for every 50-week

period of paid or credited contributions over 500, up to a

maximum of 750 contributions, and 1% for every 50

contributions in excess of 750. The weekly pension is

determined by dividing this sum by 52.

The minimum pension is E.C.$250 a month.

The maximum pension is 60% of wages or E.C.$3,900 a month,

whichever is less.

Old-age grant: Six times the average weekly wage for every

50 paid or credited contributions, up to a maximum of

499 contributions.

Insured persons are entitled to a refund of contributions if they

have made less than 50.

Old-age social assistance (means-tested): E.C.$100 every

2 weeks.

Permanent Disability Benefits

Disability pension: 30% of the average annual wage (best 3

out of the last 15 contribution years), plus 2% for every 50-

week period of paid or credited contributions over 500, up to a

maximum of 750 contributions, and 1% for every 50

contributions in excess of 750. The weekly pension is

determined by dividing this sum by 52.

The pension is payable for as long as the disability continues

after the exhaustion of 26 weeks of sickness benefit, or once

the disability condition has lasted for at least 26 weeks.

The minimum pension is E.C.$250 a month.

The maximum pension is 60% of wages or E.C.$3,900 a month,

whichever is less.

Disability social assistance (means-tested): E.C.$100 every

2 weeks.

Survivor Benefits

Survivor pension: For a widow(er) aged 45 or older who was

married to the insured person for at least 3 years; 50% of the

insured’s pension or 30% of the insured’s average earnings in

the 3 best years of contributions, whichever is higher. The

pension is payable for life or until remarriage.
126 ♦ SSPTW: The Americas, 2003

Saint Kitts and Nevis

A limited pension is payable for 1 year if the widow(er) is under

age 45 or was married to the insured person for less than

3 years.

Orphan’s pension: Up to 1/6 of the insured’s pension if

unmarried, under age 16 (age 18 and in full-time education) and

previously living with or supported by the deceased insured

parent. If the orphan is disabled, the pension is 1/3 of the

family maximum (no age limit).

The minimum survivor pension is E.C.$720 a year.

The family maximum survivor pension is 100% of insured’s

pension.

Survivor grant: Six times the average weekly wage for every

50-week period of paid or credited contributions.

The contributions are refunded if less than 50 were made.

Funeral grant: E.C.$2,500 for the insured person or his or her

spouse. Up to E.C.$1,600 for a dependent child, with the

maximum payable for a child aged 10 or older or aged 16 to 25

and a full-time student. The payment is made to the person

who pays for the funeral.

Administrative Organization

Social insurance: Deputy Prime Minister and Minister of

International Trade, Labor, Social Security, CARICOM Affairs,

and Telecommunications and Technology provide general

supervision.

Social Security Board administers the program.

Social assistance: Social Development Assistance Board

administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1977, implemented in 1996, with

amendments.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed and self-employed persons aged 16 to 62.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None, except as an employer.

Qualifying Conditions

Cash sickness benefits: Under age 62 and employed the day

before the onset of illness with 26 weeks of paid contributions,

including 8 in the 13 weeks prior to the onset of illness.

Cash maternity benefit: 39 weeks of contributions, including

20 weeks immediately preceding eligibility.

Maternity grant: Paid to an insured person or the wife of an

insured person, with a minimum of 39 weeks of contributions

including 20 weeks of contributions in the 39 weeks before the

expected date of childbirth.

Funeral grant: A minimum of 26 weeks of contributions.

Sickness and Maternity Benefits

Sickness benefit: 65% of the average weekly wage divided

by 6 (daily rate) is payable from the first day if the illness lasts

for 4 or more days. The benefit is payable for up to 26 weeks.

Maternity benefit: 65% of the average weekly wage divided

by 6 (daily rate) is payable for 13 weeks, beginning up to

6 weeks before the expected date of childbirth.

Maternity grant: E.C.$450 for every childbirth.

Funeral grant: E.C.$2,500.

Workers’ Medical Benefits

No statutory benefits are provided.

Medical care is available at public hospitals and health centers.

Dependents’ Medical Benefits

No statutory benefits are provided.

Medical care is available at public hospitals and health centers.

Administrative Organization

Deputy Prime Minister and Minister of International Trade,

Labor, Social Security, CARICOM Affairs, and

Telecommunications and Technology provide general

supervision.

Social Security Board administers the program.

Work Injury

Regulatory Framework

First law: 1955.

Current law: 1985, implemented in 1986.

Type of program: Social insurance system.
SSPTW: The Americas, 2003 ♦ 127

Saint Kitts and Nevis

Coverage

Employed persons regardless of age.

Exclusions: Unpaid family labor and self-employed persons.

Source of Funds

Insured person: None.

Employer: 1% of payroll.

Government: None, except as an employer.

The maximum monthly earnings for contribution and benefit

purposes are E.C.$6,500.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

75% of average weekly covered wages is payable from the first

day if the disability lasts for 4 or more days. The benefit is

payable for up to 26 weeks.

Permanent Disability Benefits

75% of average weekly wages.

Partial disability: The pension is in proportion to the assessed

degree of disability. A lump sum is provided if the assessed

degree of disability is less than 20%.

Constant-attendance supplement: The supplement should

meet the reasonable cost of providing care.

Workers’ Medical Benefits

Benefits include the reimbursement of reasonable expenses for

medical, surgical, dental, hospital, and nursing care; medicines;

appliances; and transportation.

Survivor Benefits

Survivor pension: 50% of the permanent total disability

pension, payable to a widow(er).

Orphan’s pension: Up to 1/6 of the permanent total disability

pension for a child under age 16; 1/3 to a full orphan under

age 16.

The maximum survivor pension is 100% of the permanent total

disability benefit.

Funeral grant: E.C.$4,000.

Administrative Organization

Deputy Prime Minister and Minister of International Trade,

Labor, Social Security, CARICOM Affairs, and

Telecommunications and Technology provide general

supervision.

Social Security Board administers the program.
128 ♦ SSPTW: The Americas, 2003

Saint Lucia

Saint Lucia

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1970 (provident fund).

Current laws: 2000 (national insurance corporation) and 2003

(national insurance).

Type of program: Social insurance system.

Coverage

Employees and apprentices aged 16 to 65.

Exclusion: Civil servants were excluded until January 31, 2003.

Source of Funds

Insured person: 5% of earnings.

Employer: 5% of payroll.

Government: 5% of payroll for contributing civil servants.

The maximum annual earnings for contribution purposes are

E.C.$60,000.

All of the above contributions also finance sickness, benefits,

maternity benefits, and work injury benefits.

Qualifying Conditions

Old-age pension: Age 61 with 10 years of contributions.

Retirement from gainful employment is necessary.

Old-age settlement: Age 61 and does not meet the qualifying

conditions for the old-age pension.

Disability pension: Under age 61 with at least of 5 years of

contributions.

Disability settlement: Disabled with less than 5 years of

contributions.

Survivor pension: The insured met the qualifying conditions

for a pension or was a pensioner at the time of death. The

pension is paid to a widow(er) who is age 61 or older or caring

for a dependent child. A limited pension is paid for 1 year to a

widow(er) who is under age 61 and has no dependent children.

Survivor settlement: Paid to the widow(er) of an insured

person who did not meet the qualifying conditions for a

pension.

Old-Age Benefits

Old-age pensions: 40% of average covered earnings in the

best 5 of the last 10 years, plus 0.1% of average covered

earnings for each month of contributions over 144 months.

Old-age settlement: A lump-sum refund of 50% of

contributions without interest. (For those covered previously

by the provident fund, 100% of contributions plus accrued

interest.)

Permanent Disability Benefits

Disability pension: The pension is in proportion to the

assessed degree of disability.

The minimum pension for an assessed degree of disability of at

least 30% is 65% of the insured’s average insurable earnings in

the month of the accident.

Disability settlement: A lump-sum benefit.

Survivor Benefits

Survivor pension: In the absence of any other survivors,

75% of the insured’s old-age pension or disability pension is

payable to a widow(er). If there are other survivors or

dependents, the rate of the survivor pension is reduced by

50%.

Orphan’s pension: In the absence of any other survivors,

50% of the insured’s pension (50% of each insured parent’s

pension if a full orphan) is payable to a dependent child under

age 16 (age 18 if a full-time student). If there are other

survivors or dependents, the rate of the orphan’s pension is

reduced by 50%.

The maximum benefit is 100% of the insured’s pension.

Survivor settlement: A lump-sum benefit.

Funeral grant: Expenses up to a maximum of E.C.$1,750.

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1978 (national insurance).

Current laws: 2000 (national insurance corporation) and 2003

(national insurance).

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employees and apprentices aged 16 to 65.

Exclusion: Civil servants were excluded until January 31, 2003.
SSPTW: The Americas, 2003 ♦ 129

Saint Lucia

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

The maximum annual earnings for contribution purposes are

E.C.$60,000.

Qualifying Conditions

Cash sickness benefits: Employed on the day before the

onset of illness, 6 months of contributions including 2 of the

4 months immediately before the onset of illness.

Cash maternity benefits: Seven months of contributions in

the 10 months immediately before the date of the claim.

Maternity grant: Payable to women receiving cash maternity

benefits and to women whose husbands have at least

7 months of contributions.

Sickness and Maternity Benefits

Sickness benefit: 65% of the insured’s average salary in the

last 2 months. The benefit is payable after a 3-day waiting

period for up to 26 weeks.

Maternity benefit: 65% of the insured’s average salary in the

last 7 months. The benefit is payable for 3 months, beginning

1 month before the expected month of childbirth.

Maternity grant: A lump sum of E.C.$600.

Workers’ Medical Benefits

No statutory benefits are provided. (Enabling legislation

exists, but specific benefits are yet to be prescribed.)

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.

Work Injury

Regulatory Framework

First law: 1964 (employer liability).

Current law: 2000 (national insurance corporation).

Type of program: Social insurance system.

Coverage

Employees and apprentices aged 16 to 65.

Exclusion: Civil servants were excluded until January 31, 2003.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

The maximum annual earnings for contribution purposes are

E.C.$60,000.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

65% of wages. The benefit is payable from the day of injury

until full recovery, for up to 52 weeks.

Permanent Disability Benefits

65% of covered earnings for an assessed degree of disability

of 100%; the pension is reduced in proportion to an assessed

degree of disability of less than 100%.

Workers’ Medical Benefits

All medical expenses, including specialist care abroad if

necessary, up to a maximum of E.C.$20,000.

Survivor Benefits

Survivor benefit: A benefit is paid to parents and

grandparents who were fully or largely dependent on the

insured.

Funeral grant: Expenses up to a maximum of E.C.$1,750.

Administrative Organization

Minister of Finance provides general supervision.

National Insurance Board administers the program.
130 ♦ SSPTW: The Americas, 2003

Saint Vincent and the Grenadines

Saint Vincent and the Grenadines

Exchange rate: U.S.$1.00 equals

2.70 East Caribbean dollars (E.C.$).

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1970 (provident fund).

Current law: 1986 (social insurance).

Type of program: Social insurance system.

Coverage

Employed persons aged 16 to 59 and the self-employed.

Source of Funds

Insured person: 2.5% of earnings.

Employer: 3.5% of payroll.

Government: None.

The maximum monthly earnings for contribution purposes are

E.C.$3,770.

All of the above contributions also finance sickness and

maternity benefits and work injury benefits.

Qualifying Conditions

Old-age pension: Age 60 with 500 weeks of contributions.

Old-age grant: Age 60 with 50 weeks of contributions.

Disability pension: Under age 60 and disabled with 150 weeks

of contributions.

Survivor pension: 150 weeks of contributions.

Survivor grant: The insured did not meet the qualifying

conditions for a pension.

Funeral grants: The insured was eligible for a pension.

Old-Age Benefits

Old-age pension: 30% of average annual earnings. The

pension is increased if the insured has over 500 weeks of

contributions.

Provisional or reduced pension: A pension may be paid with

150 weeks of contributions; the benefit increases with

25 additional weekly contributions a year.

The minimum benefit is E.C.$55 a week.

The maximum benefit is 60% of average annual earnings.

Old-age grant: Six times the average weekly wage for each

50-week period of contributions.

Permanent Disability Benefits

30% of average earnings with between 150 and

500 contributions; the pension is increased if the insured has

over 500 contributions.

The minimum benefit is E.C.$55 a week.

The maximum benefit is 60% of average annual earnings.

Survivor Benefits

Survivor pension: 75% of the insured’s pension, payable to a

surviving spouse aged 50 or older or disabled or caring for a

child who is eligible for survivor benefits. The pension is

payable for 1 year to a pregnant widow under age 50 with no

dependent children; the benefit continues if the child is born

and is eligible for benefits.

Orphan’s pension: 25% of the insured’s pension for each

dependent child under age 16 (age 18 if a student); 50% for a

full orphan.

Other eligible survivors (in the absence of the above):

Dependent parents may be eligible.

Survivor grant: A benefit is provided.

Funeral grant: E.C.$2,000 is payable to the person who paid

for the funeral.

Administrative Organization

National Insurance Board administers the program.

Sickness and Maternity

Regulatory Framework

First and current law: 1986.

Type of program: Social insurance system. Cash benefits

only.

Coverage

Employed persons aged 16 to 60.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

Qualifying Conditions

Cash sickness benefits: Currently employed with 26 weeks

of contributions, including 8 weeks in the last 13 weeks before

onset of illness.
SSPTW: The Americas, 2003 ♦ 131

Saint Vincent and the Grenadines

Cash maternity benefits: Thirty weeks of contributions,

including 20 weeks during the 30-week period immediately

preceding the claim.

Maternity grant: The woman or her husband meets the

qualifying conditions for cash sickness benefit.

Sickness and Maternity Benefits

Sickness benefit: 65% of average earnings during the

13 weeks before the onset of illness. The benefit is payable for

up to 26 weeks.

Maternity benefit: 65% of average earnings during the

30 weeks before the start of benefit. The benefit is payable for

up to 13 weeks (including the week of childbirth, plus 6 weeks

before and 6 weeks after).

Maternity grant: E.C.$500.

Administrative Organization

National Insurance Board administers the program.

Work Injury

Regulatory Framework

First law: 1939.

Current law: 1997.

Type of program: Social insurance system.

Coverage

Employed persons.

Exclusion: Self-employed persons.

Source of Funds

Insured person: None.

Employer: 0.05% of payroll.

Government: 0.05% of payroll as an employer.

Qualifying Conditions

Work injury benefits: The insured must be employed.

Employees older and younger than the usual insurable ages

are eligible. The benefit is paid for an occupational injury only.

Temporary Disability Benefits

70% of average weekly insurable earnings for a period of

26 weeks in the first instance; thereafter, for 52 weeks.

Permanent Disability Benefits

70% of average weekly insurable earnings for the duration of

the disability. The assessed degree of disability must exceed

30%, and the insured must have exhausted entitlement to the

temporary disability benefit.

Constant-attendance allowance: 150% of the disability

pension for as long as constant attendance is required. Must

be an outpatient receiving a permanent disability pension

(100% disability) and in need of the constant attendance of

another.

Disability grant: If the assessed degree of disability is less

than 30%, a lump sum is paid equal to 365 times average

weekly insurable earnings. The insured must have exhausted

entitlement to a temporary disability benefit.

Workers’ Medical Benefits

Benefits include medical, surgical, and hospital treatment;

medicines; appliances; and transportation.

Survivor Benefits

Survivor benefit: The insured’s death resulted from a work

injury or an occupational disease. A widow(er), unmarried

children, and any other person who was fully dependent on

the insured may qualify. Insured workers have the prior option

of naming the beneficiary.

Widow(er) pension: 35% of average weekly insurable

earnings. The pension is paid to the widow(er) until death or

remarriage.

Orphan’s pension: 11.6% of average weekly insurable

earnings (23% if disabled) to children up to age 16 (age 18 if a

full-time student).

Other dependents: 11.6% of average weekly insurable

earnings for 1 year.

Funeral grant: If the insured died as the result of a work

injury or an occupational disease, E.C.$3,600 is payable to the

person who paid for the funeral.

Administrative Organization

National Insurance Board administers the program.
132 ♦ SSPTW: The Americas, 2003

Trinidad and Tobago

Trinidad and Tobago

Exchange rate: U.S.$1.00 equals

6.05 Trinidad and Tobago dollars (TT$).

Old Age, Disability, and Survivors

Regulatory Framework

First and current laws: 1939 (social assistance) and 1971

(social insurance), implemented in 1999, with 1999 amendment.

Type of program: Dual social insurance and social assistance

system.

Note: This information is from 1999.

Coverage

Social insurance: Employed persons aged 16 to 64, including

agricultural and domestic workers, apprentices, and publicsector employees.

Voluntary insurance for old-age and survivor pensions.

Exclusion: The self-employed.

Social assistance (means-tested): Residents aged 65 or

older; aged 40 or older if blind and needy.

Source of Funds

Social insurance

Insured person: 2.8% of earnings according to 12 wage

classes. The voluntarily insured contribute 7.1% of earnings.

Employer: 5.6% of payroll, according to 12 wage classes.

Government: None.

The maximum weekly earnings for contribution purposes are

TT$810.

All of the above contributions also finance sickness and

maternity and work injury benefits.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Old-age pension (social insurance): From age 60 with

750 weeks of contributions paid or credited (in 1972, workers

were credited with 25 weeks of coverage for each year of age

over 35; up to a maximum 600 weeks). An increment is paid for

every 25-week period of contributions in excess of 750,

excluding the age credits.

Old-age settlement (social insurance): The insured does

not meet the qualifying conditions for a pension.

Retirement is compulsory at age 65.

Disability pension (social insurance): Ten weeks of

contributions in the 13 weeks before the onset of disability,

payable after receiving 26 weeks of sickness benefit.

Disability settlement (social insurance): The insured does

not meet the qualifying conditions for a pension.

Survivor pension (social insurance): The insured had at

least 50 contributions or was a pensioner at the time of death.

Means-tested pension (social assistance): Aged 65 or older

with 20 years’ residence and annual income below TT$5,000;

certified as blind and aged 40 or older. The social assistance

pension is not payable abroad.

Old-Age Benefits

Old-age pension (social insurance): 30% to 48% of average

weekly earnings (TT$50 to TT$243 a week), according to

12 wage classes, plus 0.4% of average weekly earnings for

each 25-week period of contributions over 750 weeks.

Old-age settlement (social insurance): A lump sum equal to

three times the total employer/employee contributions.

The minimum settlement is TT$200.

Means-tested pension (social assistance): TT$620 a

month.

Permanent Disability Benefits

Disability pension (social insurance): 30% to 48% of

average weekly earnings (TT$50 to TT$243 a week), according

to 12 wage classes, plus 0.4% of average weekly earnings for

each 25-week period of contributions over 750 weeks.

Disability settlement (social insurance): A lump sum equal

to three times the total employer/employee contributions.

The minimum grant is TT$200.

Means-tested pension (social assistance): TT$620 a

month.

Survivor Benefits

Survivor pension (social insurance): 60% of the insured’s

pension, payable to a widow aged 55 or older or disabled or

caring for a child under age 16 (age 19 if a full-time student, no

limit if disabled). The pension is payable for life if the widow

reaches age 50 before the child reaches the statutory age limit.

A limited pension is payable for 1 year to a widow who does

not meet the qualifying conditions. A pension is also payable

to a disabled widower.

Orphan’s pension (social insurance): 30% of the insured’s

pension (60% if a full orphan) until age 16 (age 19 if a full-time

student).

Dependent parents (social insurance): 30% of the insured’s

pension.

The maximum survivor pension is 100% of the insured’s

pension.

Funeral grant (social insurance): TT$2,000.
SSPTW: The Americas, 2003 ♦ 133

Trinidad and Tobago

Administrative Organization

Ministry of Finance provides general supervision of the

national insurance system.

National Insurance Board administers the national insurance

system.

National Insurance Board is a tripartite body comprising

government, labor, and employer representatives.

Ministry of Social Development provides general supervision

of social assistance and means-tested old-age pensions.

Sickness and Maternity

Regulatory Framework

First and current laws: 1939 (social assistance) and 1971

(social insurance), with 1999 amendment.

Type of program: Dual social insurance and social assistance

system. Cash and medical benefits.

Coverage

Social insurance: Employed persons aged 16 to 64, including

agricultural and domestic workers, apprentices, and publicsector employees.

Exclusions: Voluntary contributors and self-employed persons.

Social assistance: Means-tested assistance is available to

indigent persons.

Source of Funds

Social insurance

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.

Social assistance

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Cash sickness benefits: Ten weeks of contributions in the

13 weeks before the onset of illness.

Cash maternity benefits: Ten weeks of contributions in the

13 weeks preceding the 6 weeks before the expected date of

childbirth or receiving sickness benefits during the 13 weeks

preceding the 6 weeks before the expected date of childbirth.

Maternity grant: Paid if the pregnancy lasts at least 28 weeks.

Sickness and Maternity Benefits

Social insurance

Sickness benefit: 60% of average earnings according to

12 wage classes (TT$63 to TT$486 a week). The benefit is

payable after a 4-day waiting period for up to 52 weeks.

Maternity benefit: 60% of average earnings according to

12 wage classes, payable for a maximum of 13 weeks (TT$63 to

TT$486 a week).

Maternity grant: A lump sum of TT$1,000.

Social assistance: Means-tested assistance is available to

indigent persons.

Workers’ Medical Benefits

Medical care is available to recipients of means-tested social

assistance in public hospitals and in health offices and centers.

Dependents’ Medical Benefits

Medical care is available to recipients of means-tested social

assistance in public hospitals and in health offices and centers.

Administrative Organization

Ministry of Finance provides general supervision of the

national insurance system.

National Insurance Board administers national insurance

system.

National Insurance Board is a tripartite body comprising

government, labor, and employer representatives.

Ministry of Social Development provides general supervision

of the national insurance system and administers means-tested

social assistance.

Work Injury

Regulatory Framework

First and current law: 1976 (social insurance), with 1999

amendment.

Type of program: Social insurance system.

Coverage

Employed persons aged 16 to 64, including agricultural and

domestic workers, apprentices, and public-sector employees.

Source of Funds

Insured person: See source of funds under Old Age,

Disability, and Survivors, above.

Employer: See source of funds under Old Age, Disability, and

Survivors, above.

Government: None.
134 ♦ SSPTW: The Americas, 2003

Trinidad and Tobago

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

67% of average earnings, according to 12 wage classes (TT$70

to TT$540). The benefit is payable for up to 52 weeks. There

is no waiting period.

Permanent Disability Benefits

Permanent disability pension: The pension is in proportion

to the assessed degree of disability, if at least 20% disabled.

The pension is payable for life.

Partial disability grant: For an assessed degree of disability of

less than 20%, the grant is calculated as a percentage of

average weekly earnings in proportion to half the assessed

degree of disability multiplied by the period of disability (up to

a maximum of 365 weeks).

Workers’ Medical Benefits

Benefits include medical expenses for the treatment of the

employment injury, up to a maximum of TT$15,000.

Survivor Benefits

Survivor pension: A widow receives 60% of the insured’s

pension until she remarries. A widower receives 60% of the

insured’s pension if he is disabled and unable to work.

Orphan’s pension: 30% of the insured’s pension (60% if a full

orphan) until age 16 (age 19 if a full-time student, no limit if

disabled).

Dependent parents: 30% of the insured’s pension.

Funeral grant: TT$2,000.

Administrative Organization

Ministry of Finance provides general supervision of the

national insurance system.

National Insurance Board administers the national insurance

system.

National Insurance Board is a tripartite body comprising

government, labor, and employer representatives.

Family Allowances

Regulatory Framework

First and current law: 1939 (social assistance).

Type of program: Social assistance system.

Coverage

Available to indigent persons on a means-tested basis.

Source of Funds

Insured person: None.

Employer: None.

Government: Total cost.

Qualifying Conditions

Female, over age 18, and destitute due to the death or absence

of the head of the household.

Family Allowance Benefits

Family allowances: A family grant of TT$632.60, plus a food

subsidy of TT$70.15 a month. The grant is payable for a

maximum of 12 months.

Administrative Organization

Ministry of Social Development provides general supervision

and administers the program.
SSPTW: The Americas, 2003 ♦ 135

United States

United States

Exchange rate: U.S.dollar (U.S.$).

Old Age, Disability, and Survivors

Regulatory Framework

First and current law: 1935, with amendments.

Type of program: Social insurance system.

Coverage

Gainfully occupied persons, including self-employed persons.

Exclusions: Casual agricultural and domestic employees, some

categories of self-employed (when annual net income is below

U.S.$400), and some federal employees hired before 1984.

Voluntary coverage for employees of state and local

governments (mandatory coverage for employees of state and

local governments not covered under a retirement system,

effective July 1, 1991), and clergy. Voluntary coverage applies

in the United States, Puerto Rico, Northern Mariana Islands,

Virgin Islands, Guam, and American Samoa, and to citizens and

residents employed abroad by U.S. employers.

Special systems for railroad employees, federal employees, and

many employees of state and local governments.

Source of Funds

Insured person: 6.2% of earnings; self-employed persons

contribute 12.4%.

Employer: 6.2% of payroll.

Government: Total cost of the means-tested allowance.

Maximum annual earnings for contribution and benefit

purposes are U.S.$87,000.

Maximum earnings for contribution and benefit purposes are

automatically adjusted to wage levels.

Qualifying Conditions

Old-age pension: Effective for workers retiring at age 65 in

2003, the age at which one can receive an unreduced benefit

(the full retirement age) has been raised from age 65 to age 65

and 2 months. The full retirement age will increase gradually to

age 67 by 2027. Insured persons may receive reduced benefits

as early as age 62. The insured must have 40 quarters of

coverage; less for those who reach age 62 before 1991. The

pension is reduced by U.S.$1 for every U.S.$2 of earnings

above U.S.$11,520 a year for people under age 65 and by

U.S.$1 for every U.S.$3 of earnings above U.S.$30,720 for

beneficiaries aged 65 to 69.

Earnings limits are adjusted annually according to average

wage increases.

Pensions can be paid to noncitizens abroad if reciprocity

exists. However, noncitizen’s dependents and survivors who

were first eligible after 1984 generally must meet a residency

test.

Means-tested old-age benefit: For persons aged 65 or older

with low income and limited resources. The means test is

based on earned and unearned income, including benefits.

Disability pension: Inability to engage in substantial gainful

activity due to an impairment that is expected to last at least

1 year or result in death. The insured must have 1 quarter of

coverage for each year since age 21 up to the year of the onset

of disability, up to a maximum of 40 quarters of coverage. The

insured must also have 20 quarters of coverage in the 10-year

period before the onset of disability.

The qualifying conditions for young and blind persons are

more liberal.

Means-tested disability benefit: For disabled and blind

persons under age 65 with low income and limited resources.

The means test is based on earned and unearned income,

including benefits. Certain impairment-related work expenses

are deductible from income.

Survivor pension: The insured was a pensioner or had

1 quarter of coverage for each year since age 21 up to the year

before the year of death, up to a maximum of 40 quarters of

coverage.

In the case of orphans or a nonaged widow(er) with an eligible

dependent orphan, the qualifying conditions are 6 quarters of

coverage in the 13 quarters ending with the quarter in which

the death occurred.

Old-Age Benefits

Old-age pension: The pension is based on covered earnings

averaged over the period after 1950 (or age 21, if later) and

indexed for past wage inflation, up to age 62 (or death, if

earlier) excluding the 5 years with the lowest earnings.

(Earnings in years outside this period may be substituted, if

higher.) The pension is available at age 62 but is reduced for

each month of receipt prior to the full retirement age.

There is no minimum pension for insured persons reaching

age 62 after 1981.

The maximum monthly pension for workers retiring at the full

retirement age in 2003 is U.S.$1,741.

Pension increment: An increment is provided for each month

the insured delays retirement at the full retirement age, up to

age 69. The increment amount depends on the year the

insured person reached age 62. In 2003, the increment is 7.5%

a year for those aged 62.

Benefit adjustment: Automatic adjustment for cost-of-living

changes.

Dependents’ allowance: 50% of the insured’s pension is paid

to a wife or a husband (or divorced spouse, if the marriage

lasted 10 years) at the full retirement age (reduced if age 62 up

to the full retirement age) or to a wife or a husband at any age
136 ♦ SSPTW: The Americas, 2003

United States

caring for a child under age 16 or disabled; to each child (or

dependent grandchild) under age 18 or aged 18 to 19 and

attending elementary or secondary school full time (no age

limit if disabled before age 22).

The maximum family pension ranges from 150% to 188% of the

insured’s basic pension.

The maximum monthly family benefit for an insured person

retiring at the full retirement age in 2003 is U.S.$3,047.

Means-tested old-age benefit: The maximum monthly benefit

is U.S.$552 for an individual or U.S.$829 for a couple.

Benefit adjustment: Benefits are adjusted annually for cost-ofliving changes.

Permanent Disability Benefits

Disability pension: The pension is based on covered

earnings averaged over the period after 1950 (or age 21, if later)

and indexed for past wage inflation, up to the onset of

disability, excluding up to 5 years with the lowest earnings.

Benefit adjustment: Automatic adjustment for cost-of-living

changes.

There is no minimum pension for insured persons becoming

disabled after 1981.

The maximum monthly pension for insured persons who

become disabled at age 50 in 2003 is U.S.$1,952. The maximum

pension for insured persons disabled at any other age is

computed on the basis of that age.

Dependents’ allowance: 50% of the insured’s pension is paid

to a wife or a husband (or a divorced spouse, if the marriage

lasted 10 years) at the full retirement age (reduced if age 62 up

to the full retirement age) or to a wife or a husband at any age

caring for a child under age 16 or disabled; to each child (or

dependent grandchild) under age 18 or aged 18 to 19 and

attending elementary or secondary school full time (no age

limit if disabled before age 22).

The maximum family pension ranges from 100% to 150% of the

insured’s basic pension.

The maximum monthly family benefit for an insured person

who becomes disabled in 2003 is U.S.$2,929.

Means-tested disability benefit: The maximum monthly

benefit is U.S.$552 for an individual or U.S.$829 for a couple.

Benefit adjustment: Benefits are adjusted annually for cost-ofliving changes.

Survivor Benefits

Survivor pension: 100% of insured’s pension at the full

retirement age (reduced if age 60 up to the full retirement age);

a reduced pension is paid if the insured was disabled at age 50

to 59. The pension is payable to a widow(er) (or a surviving

divorced spouse, if the marriage lasted 10 years); 75% of the

insured’s pension for a widow(er) or surviving divorced

spouse at any age caring for a child under age 16 or disabled.

Orphan’s pension: 75% of the insured’s pension for each

child under age 18 or aged 18 to 19 and attending elementary or

secondary school full time (no age limit if disabled before

age 22).

Dependent parent(s): 82.5% of the insured’s pension at age 62,

or 150% for two eligible parents.

The maximum total family pension is based on the insured’s

pension.

The maximum monthly family benefit, if the insured died in

2003, is U.S.$3,466.

Administrative Organization

Social Security Administration, an independent agency within

the executive branch, administers the program through regional

program centers, district offices, and branch offices.

Treasury Department supervises the collection of Social

Security taxes through the Internal Revenue Service and

supervises the payment of benefits and the management of

funds.

Administered by the Social Security Administration, the

Supplemental Security Income (SSI) program provides meanstested benefits.

Sickness and Maternity

Regulatory Framework

First and current laws

Cash benefits: Rhode Island (1942), California (1946), New

Jersey (1948), New York (1949), Hawaii (1969), and Puerto Rico

(1968).

Medical benefits: 1965 (health insurance for aged) and 1972

(health insurance for disabled).

Type of program: Social insurance systems.

Coverage

Cash benefits: Employees in industry and commerce in six

jurisdictions. Most agricultural workers, except in New York.

Self-employed persons in California may elect to participate.

Contracting-out is allowed, except in Rhode Island. (There are

no programs in 45 states.)

Special national system for railroad employees (cash benefits)

and a federal/state system for the medically indigent (medical

benefits).

Medical benefits

Hospitalization: Persons eligible for a pension and aged 65 or

older, certain others who qualify at age 65, disability

pensioners on rolls for more than 2 years, and persons with

end-stage kidney disease.

Other medical services: Persons eligible for a pension aged 65

or older, certain others who qualify at age 65, disability

pensioners on rolls for more than 2 years, persons with end-
SSPTW: The Americas, 2003 ♦ 137

United States

stage kidney disease, and all other persons aged 65 or older

through voluntary coverage.

Source of Funds

Insured person

Cash benefits: Up to 1.2% of taxable earnings, according to

the jurisdiction.

Hospitalization: 1.45% (self-employed, 2.9%), paid by all

workers who are covered for old-age, disability, and survivor

benefits, plus some federal and state and local employees.

Other medical services: Pensioners contribute U.S.$45.50 a

month.

Employer

Cash benefits: Variable payroll contributions are paid in

Hawaii, New Jersey, and New York; 0.5% of payroll in Puerto

Rico.

Hospitalization: 1.45% of payroll.

Other medical services: None.

Government

Cash benefits: None.

Hospitalization: Total cost of hospitalization benefits for

certain noninsured aged persons.

Other medical services: The balance of the cost for voluntary

insurance.

The maximum annual earnings for contribution purposes for

cash benefits are U.S.$6,900 to U.S.$38,000.

There are no maximum earnings for contribution purposes for

hospitalization.

Qualifying Conditions

Cash benefits: For insured persons with the required

minimum insured wages in the last year (from U.S.$300 to

U.S.$6,900), specific weeks of employment in the last year (from

4 to 20 weeks), or a combination of these conditions.

Medical benefits

Hospitalization: Pensioners aged 65 or older, disabled persons

entitled to disability benefits for at least 2 years, or persons

with end-stage kidney disease.

Other medical services: Meets the requirement for

hospitalization benefits, election of coverage, and payment of

required premiums.

Sickness and Maternity Benefits

Sickness benefit: Cash benefits vary, depending on the

jurisdiction; 75% of earnings (Rhode Island), 66.6% (Hawaii),

and 53% (New Jersey). A variable proportion of quarterly or

annual earnings (California, New York, and Puerto Rico). A

supplement of U.S.$5 a week per child up to a maximum of four

children is payable in Rhode Island only.

Benefit is payable after 7-day waiting period (waived in

California and Puerto Rico from the date of hospitalization) for

up to 52 weeks.

The maximum benefit varies by jurisdiction.

Maternity benefit: Cash benefits vary, depending on the

jurisdiction; 75% of earnings (Rhode Island), 66.6% (Hawaii),

and 53% (New Jersey). A variable proportion of quarterly or

annual earnings (California, New York, and Puerto Rico).

Workers’ Medical Benefits

Hospitalization: Inpatient care is provided for stays of up to

90 days; the beneficiary is responsible for the first-day

deductible of U.S.$768 (amount adjusted each year) and, for

the 60th to the 90th day, 1/4 of the first-day deductible amount

per day. For inpatient care longer than 90 days, coverage is

available for up to 60 lifetime reserve days (the beneficiary is

responsible for 1/2 of the first-day deductible amount per day).

Posthospital skilled nursing facility care for an additional

100 days (the patient pays U.S.$96 for the 21st to the 100th

day); laboratory and X-ray services for inpatients; and

posthospital home health services.

Other medical services: Payment for 80% of reasonable

charges above U.S.$100 a year for physician’s services,

outpatient diagnostic and physical therapy, laboratory

services, appliances, and transportation; 100% of reasonable

charges for home health services (after a U.S.$100 deductible is

paid).

Persons eligible for both hospitalization and other medical

services under the regular Medicare program, except for those

with end-stage kidney disease, can as an alternative elect to

participate in one of several types of Medicare Plus Choice

plan if one is available in their jurisdiction.

Federal/state assistance programs: Medical services are

provided to medically indigent persons of any age.

Dependents’ Medical Benefits

Benefits are only for persons aged 65 or older who satisfy

other qualifying requirements or who have end-stage kidney

disease.

Hospitalization: Inpatient care is provided for stays of up to

90 days; the beneficiary is responsible for the first-day

deductible of U.S.$768 (amount adjusted each year) and, for

the 60th to the 90th day, 1/4 of the first-day deductible amount

per day. For inpatient care longer than 90 days, coverage is

available for up to 60 lifetime reserve days (the beneficiary is

responsible for 1/2 of the first-day deductible amount per day).

Posthospital skilled nursing facility care for an additional

100 days (the patient pays U.S.$96 for the 21st to the 100th

day); laboratory and X-ray services for inpatients; and

posthospital home health services.

Other medical services: Payment for 80% of reasonable

charges above U.S.$100 a year for physician’s services,

outpatient diagnostic and physical therapy, laboratory

services, appliances, and transportation; 100% of reasonable
138 ♦ SSPTW: The Americas, 2003

United States

charges for home health services (after a U.S.$100 deductible is

paid).

Persons eligible for both hospitalization and other medical

services under the regular Medicare program, except for those

with end-stage kidney disease, can as an alternative elect to

participate in one of several types of Medicare Plus Choice

plan if one is available in their jurisdiction.

Federal/state assistance programs: Medical services are

provided to medically indigent persons of any age.

Administrative Organization

Cash benefits: State employment security agencies, except in

New York (Workers’ Compensation Board) and Hawaii (Labor

Department), deliver benefits.

Medical benefits: Department of Health and Human Services

provides general supervision. Centers for Medicare and

Medical Services provide the national administration of the

program in cooperation with the Public Health Service, Social

Security Administration, and state health departments.

Private carriers and public agencies, serving under contract as

intermediary administrative agents, determine and make

payments to providers of services or to patients.

Medical services are furnished by providers paid for directly

by carriers, or through refunds to patients by carriers of part of

the medical expenses.

Includes nonprofit Blue Cross and Blue Shield plans,

commercial insurance companies, and group-practice

prepayment plans.

Work Injury

Regulatory Framework

First laws: 1908 (federal employees) and 1911 (10 state laws).

Current laws: All states, Puerto Rico, District of Columbia,

Guam, and Virgin Islands; federal employees, longshoremen,

and harbor workers. Most laws were enacted before 1920.

Special federal program for miners (pneumoconiosis).

Type of program: Compulsory (elective for employers in three

states) insurance through public or private carrier (according

to the state) or self-insurance.

Coverage

Employees in industry and commerce generally and most

public-sector employees.

Exclusions: Agricultural employees in 1/5 of all states;

domestic servants in 1/2 of all states; casual employees in 3/5

of all states; employees of firms with fewer than three to

five employees in 1/6 of all states.

Source of Funds

Insured person: Nominal contributions in a few states.

Employer: Total cost in most states and most of the cost in

others, met through either insurance premiums varying with

the assessed degree of risk or self-insurance. (The average

cost in 1995 was about 2.05% of payroll.) Total cost of

pneumoconiosis benefits for insured persons coming onto the

employment rolls after 1973.

Government: None, except for own employees. Total cost of

pneumoconiosis benefits for insured persons coming onto the

employment rolls before 1974.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period,

except for exposure to occupational disease.

Temporary Disability Benefits

66.6% of earnings in most states. The benefit is payable after a

waiting period of 3 to 7 days (first day in Virgin Islands).

Benefits are paid retroactively if the disability lasts a specified

period, ranging from 4 days to 6 weeks.

Dependents’ supplement: About 1/5 of all states provide

supplements for dependents, in some instances as a lump sum.

The maximum weekly benefit is U.S.$270 to U.S.$714, according

to the state.

Benefit adjustment: About 4/5 of all states increase benefits

automatically with increases in state wages.

Permanent Disability Benefits

Permanent disability pension: 66.6% of earnings in most

states, if totally disabled. The pension is limited to between

312 days and 500 weeks in nine jurisdictions.

Partial disability: The pension is proportionate to wage loss, or

at the full rate for fewer weeks in the case of scheduled injuries.

Pneumoconiosis pension: The basic monthly pension is

U.S.$516.50. The family maximum monthly is U.S.$1,037 (2002).

Constant-attendance supplement: Provided in some states.

The supplement is payable for life or for the duration of the

disability in 4/5 of all states. Some states provide limited

supplements for a duration of 104 to 500 weeks; the maximum

total benefit in others is U.S.$100,000 to U.S.$214,000.

Dependents’ supplement: Provided in some states. The

supplement is payable for life or for the duration of the

disability in 4/5 of all states. Some states provide limited

supplements for a duration of 104 to 500 weeks; the maximum

total benefit in others is U.S.$100,000 to U.S.$214,000.

Workers’ Medical Benefits

Medical care is provided for as long as is required in all states.
SSPTW: The Americas, 2003 ♦ 139

United States

Survivor Benefits

Survivor pension: 35% to 70% of the insured’s earnings for a

widow(er); 60% to 80% for a widow(er) with dependent

children.

Survivor pension (pneumoconiosis): The basic monthly

pension is U.S.$516.50. The family maximum monthly is

U.S.$1,037 (2002).

Other eligible survivors (some work injury laws and

pneumoconiosis): Dependent parents, brothers, and sisters.

Funeral grant: A lump sum of U.S.$700 to U.S.$6,000,

according to the state (1/2 of states pay U.S.$3,000 or more).

Administrative Organization

Work injury: Administration of the program by state workers’

compensation agencies in about 1/2 of all states, by state

Departments of Labor in about 3/8 of all states, and by courts

in three states.

Pneumoconiosis: The federal government was responsible

before 1974; state participation was authorized after 1973.

Government workers’ compensation funds exist in about 1/3 of

all states.

Employers must insure with the state fund in six states; may

insure with the state fund or a private carrier in 14 states and

with a private carrier in the remainder.

Self-insurance by employers is also permitted under all but

three state laws.

Unemployment

Regulatory Framework

Federal law: 1935 (requires tax on employers, with offset for

contributions paid to approved state programs; grants to

states for administration; and minimum administrative

standards).

State laws: All states, Puerto Rico, Virgin Islands, and District

of Columbia have separate laws creating their own programs.

State laws were first enacted between 1932 and 1937.

Type of program: Social insurance systems.

Coverage

Employees of firms in industry and commerce and employees

of nonprofit organizations with four or more employees during

20 weeks in a year. Almost all state and local government

workers, domestics, and 2/5 of farm workers are covered.

Exclusions: Some agricultural employees, employees of

religious organizations, casual employees, family labor, and

self-employed persons.

Special federal program for railroad employees.

Source of Funds

Insured person: None, except in Alaska, New Jersey, and

Pennsylvania.

Employer

Federal tax: 0.8% of taxable payroll (6.2% basic rate minus a

basic rate up to the 5.4% state contribution; includes the

temporary basic rate of 0.2%) on the first U.S.$7,000 annually.

The base has been raised in 49 jurisdictions.

State programs: A basic rate of 5.4% in most states; actual

rates vary from zero to 10% or more, according to the

individual employer’s experience.

Government: Federal government pays for the administration

of state programs from the federal tax. The balance is used for

loans to states or to finance the extended benefit program.

Qualifying Conditions

Unemployment benefits: About 3/4 of states require

minimum earnings in the preceding base year equal to a

specified multiple of the weekly benefit or high-quarter wages,

or to specified total amount. Eight states require a specified

number of weeks of employment (for example, from 15 to

20 weeks). The insured person must be registered with the

employment service and be capable of and available for work.

Unemployment is not due to voluntary leaving, misconduct, a

labor dispute, or the refusal of a suitable offer (the length of

the disqualification period varies among states).

Unemployment Benefits

Unemployment benefit: About 50% of earnings, according to

diverse state formulas.

Dependents’ supplement: About 1/4 of states provide from

U.S.$1 to U.S.$95 a week for each child and sometimes for other

dependents. The benefit is payable after a 1-week waiting

period in most states for up to 26 weeks, according to the state.

Federal law provides up to 13 additional weeks in states with

high unemployment.

Unemployment assistance: Assistance is available in some

states to workers who are ineligible because of insufficient

periods of covered employment and to needy unemployed

persons who have exhausted benefit rights under the federal/

state assistance programs.

Administrative Organization

Department of Labor administers the program nationally

through its Employment Training Administration and

Unemployment Insurance Service.

State employment security agencies, through local employment

offices, are responsible for the administration of individual
140 ♦ SSPTW: The Americas, 2003

United States

state programs. More than half of agencies are within a

department of the state government; the remainder are

independent boards or commissions.

Family Allowances

Regulatory Framework

A federal/state system of aid (cash payments, social services,

and job training) provides temporary assistance to needy

families, and a system of liberalized refundable federal tax

credits operates for low-income families with eligible children

and for some single persons.
SSPTW: The Americas, 2003 ♦ 141

Uruguay

Uruguay

Exchange rate: U.S.$1.00 equals

27.90 new pesos (NP).

Old Age, Disability, and Survivors

Regulatory Framework

First laws: Various laws from 1829 to 1934.

Current laws: 1995, implemented in 1996; 2000, and 2001.

Type of program: Dual social insurance and private insurance

system.

Coverage

Social insurance

Employees and self-employed persons.

Private insurance

Employees and self-employed persons with monthly income

above 11,188 NP.

Voluntary coverage for private insurance for those with

monthly income of 11,188 NP or less.

Special systems for bank employees, notaries, university

graduates, the armed forces, and the police force.

Source of Funds

Insured person: 15% of earnings.

Contributions are split between the social insurance and

private insurance programs according to earnings ceilings. For

earnings of less than 11,188 NP, 7.5% of earnings goes to the

social insurance fund and 7.5% goes to the individual account;

for those with earnings of 11,188 NP or more, 15% of monthly

earnings up to a ceiling of 11,188 NP goes to the social

insurance program and 15% of monthly earnings for earnings

above 11,188 NP up to a ceiling of 33,563 NP goes to the

individual account. For disability and survivor insurance

under the private insurance program, the insured’s

accumulated capital is transferred to the insurance company as

part of the insurance premium to finance the pension.

Employer: 12.5% of payroll for social insurance only.

Government: Earmarked proceeds of various taxes help

finance deficits of the cost of the pension benefit.

The maximum earnings for contribution purposes for social

insurance are 11,188 NP.

The minimum earnings for contribution purposes for private

insurance are 11,188 NP.

The maximum earnings for contribution purposes for private

insurance are 33,563 NP.

Qualifying Conditions

Old-age pension

Social insurance: Age 60 (men and women) with 35 years of

coverage. Additional years of service are credited for

hazardous occupations.

Private insurance: Age 60 (men and women) with 35 years of

coverage; age 65 with no coverage requirement.

Old-age pensions are payable abroad.

Advanced-age pension (social assistance): Age 70 (men

and women) with 15 years of service (residency may be

required). Retirement from the current place of employment is

necessary.

Noncontributory means-tested pension (social

assistance): Age 70 (men and women) without the necessary

resources to cover basic needs or assessed as totally and

permanently disabled and 15 years of residency.

Disability pension

Social insurance: Incapacity to work in any form of

employment and not receiving any other benefit. If the

disability is caused by an accident, there are no other

qualifying conditions. For a permanent disability pension,

2 years of recognized service including the 6 months prior to

the onset of disability; 10 years of coverage if the insured was

unemployed at the time of onset.

For a partial disability pension, must have at least 3 years of

service.

Private insurance: For temporary disability, the insured is

assessed as incapable of performing his or her current job. For

permanent disability, the insured is assessed as incapable of

performing any job.

Survivor pension

Social insurance: Eligible survivors include widows,

dependent widowers, orphans up to age 21 (no limit if

disabled), and dependent disabled parents.

The pension is payable abroad for a limited period only, unless

a reciprocal agreement permits otherwise.

Private insurance: Eligible survivors include widows,

dependent widowers, orphans up to age 21 (no limit if

disabled), and dependent disabled parents.

Old-Age Benefits

Old-age pension

Social insurance: 50% of average earnings in the last 10 years

with 35 years of service or 50% of average earnings in the last

20 years. The pension is increased by 0.5% for every year of

work over 35 years, up to a maximum of 2.5% of earnings, plus

3% for every additional year over age 60, up to a maximum of

30%.

The minimum monthly pension at age 60 is 1,231 NP.

The maximum monthly pension is 9,230 NP or 7 to 15 times the

minimum wage in special cases.
142 ♦ SSPTW: The Americas, 2003

Uruguay

The total maximum monthly pension with increments is 82.5%

of average earnings.

Benefit adjustment: Automatic annual adjustment of pensions

according to changes in wages.

Private insurance: The accumulated capital in the individual

account is equal to the insured’s contributions plus accrued

interest, less administrative fees. The insured uses the

accumulated capital to purchase an annuity from an insurance

company. The annuity varies according to the individual’s life

expectancy at the time of retirement.

Advanced-age pension (social assistance): 50% of average

earnings in the last 10 years, plus 1% of earnings for each year

of service over 15 years, up to a maximum of 14 years.

Noncontributory means-tested pension (social

assistance): The value of the pension varies according to

need.

Benefit adjustment: Automatic annual adjustment of pensions

according to changes in wages.

Permanent Disability Benefits

Disability pension

Social insurance: 65% of average earnings in the last 10 years

or the actual number of years worked if less than 10 years.

The minimum monthly pension is 2,126 NP.

The maximum monthly pension is 9,230 NP.

Benefit adjustment: Automatic annual adjustment according to

changes in wages.

Private insurance: A disability pension is equal to 45% of the

insured’s average indexed salary during the 10 years before the

onset of disability. A temporary disability pension is payable

for up to 3 years; the permanent pension is payable for life.

Noncontributory means-tested pension (social

assistance): The value of the pension varies according to

need.

Benefit adjustment: Automatic annual adjustment according to

changes in wages.

Survivor Benefits

Survivor pension

Social insurance: From 66% to 75% of the insured’s pension

is payable to a widow(er), a divorced spouse, unmarried

children under age 21 (no limit if disabled), and disabled

parents.

Benefit adjustment: Automatic annual adjustment according to

changes in wages.

Private insurance: If the insured died before retirement, the

pension is a percentage of the old-age annuity to which the

insured would have been entitled to at the time of death. This

annuity must be no lower than 45% of the insured’s average

indexed salary during the 10 years before death. If the insured

died after retirement, the pension is a percentage of the

insured’s old-age annuity.

Widow(er)s and divorced spouses share 70% of the total

pension if they have dependents; 60% if there are no

dependents. The remainder is split equally among other

eligible survivors. Widow(er)s and divorced spouses share

100% of the pension is there are no other eligible survivors. In

the absence of a widow(er) or a divorced spouse, 100% of the

pension is split equally among other eligible survivors.

Funeral grant: The cost of the funeral up to 5,146 NP.

Administrative Organization

Ministry of Labor and Social Security (MTSS) provides general

supervision.

Social Security Bank supervises and administers the social

insurance program.

Pension fund management companies (AFAPs) manage the

individual accounts.

Central Bank of Uruguay (BCU) oversees pension fund

management companies and insurance companies.

Sickness and Maternity

Regulatory Framework

First laws: 1958 (maternity benefits) and 1960 (sickness

benefits for construction workers).

Current laws: 1975 (sickness) and 1980 (maternity).

Type of program: Social insurance system.

Coverage

Sickness benefits: All employed persons in the private

sector and self-employed persons.

Maternity benefits: Employed and self-employed persons

and persons not receiving unemployment benefits. (Benefits

are provided under Family Allowances, below.)

Special system for civil servants.

Source of Funds

Insured person: 3% of earnings.

Employer: 5% of payroll, plus an additional amount for

affiliation with medical service providers.

Government: Earmarked proceeds of various taxes help

finance maternity benefits and any deficits for sickness

benefits.

Qualifying Conditions

Cash sickness benefits: Three months of contributions or

75 days of contributions in the last 12 months.

Cash maternity benefits: See Family Allowances, below.
SSPTW: The Americas, 2003 ♦ 143

Uruguay

Sickness and Maternity Benefits

Sickness benefit: 70% of earnings, payable after a 3-day

waiting period for up to 1 year (may be extended for an

additional year).

The maximum benefit is 3 times the minimum wage.

Maternity benefit: See Family Allowances, below.

Workers’ Medical Benefits

Comprehensive medical services are available through special

mutual systems. Prenatal and postnatal medical care is

provided for insured women under Family Allowances, below.

Dependents’ Medical Benefits

Maternity care for the wife of an insured man and pediatric care

for the insured’s children up to age 6 (may be extended to

age 14) are provided under Family Allowances, below.

Administrative Organization

Social Security Bank administers the program.

Work Injury

Regulatory Framework

First law: 1914.

Current law: 1989.

Type of program: Compulsory insurance with a public carrier.

Coverage

Public- and private-sector employees.

Source of Funds

Insured person: None.

Employer: Total cost, met through contributions varying with

the assessed degree of risk. For agricultural workers,

assessments are made according to the land area the employer

has under cultivation.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

66.6% of earnings, payable after a 4-day waiting period. The

benefit for the waiting period is paid retroactively.

Permanent Disability Benefits

Permanent disability pension: For an assessed degree of

disability of between 10% and 100%, the pension is

proportional to the assessed degree of disability.

Workers’ Medical Benefits

Benefits include medical and surgical care, hospitalization,

medicines, and appliances.

Survivor Benefits

Survivor pension: 50% of the insured’s earnings, payable to

a spouse or a common-law wife.

Orphan’s pension: Between 20% and 100% of the insured’s

earnings for dependent orphans under age 16 (no limit if

disabled).

Administrative Organization

State Insurance Bank administers the program.

Unemployment

Regulatory Framework

First law: 1934.

Current laws: 1981 and 2001.

Type of program: Social insurance system.

Coverage

Employees in industry and commerce, bank employees, and

agricultural workers.

Exclusion: Domestic workers.

Source of Funds

Insured person: None.

Employer: None.

Government: Earmarked proceeds of various taxes help

finance benefits.

Qualifying Conditions

Unemployment benefits: During the 12-month period prior to

unemployment, workers who are paid monthly must have had

6 months (workers paid on a daily basis, 150 days) of work;

workers who are paid at irregular intervals must have earned

the equivalent of 6 times the minimum wage. Unemployment

may be due to the reduction or suspension of employment but

must not be due to dismissal for disciplinary reasons.
144 ♦ SSPTW: The Americas, 2003

Uruguay

Unemployment Benefits

50% of average earnings or 12 days’ average earnings in the

6 months prior to the start of unemployment.

Dependents’ supplement: An additional 20% of the benefit.

The minimum benefit is 50% of the national minimum wage.

The maximum benefit is 8 times the minimum national monthly

wage.

Administrative Organization

Social Security Bank administers the program.

Ministry of Labor and Social Security provides general

supervision.

Family Allowances

Regulatory Framework

First law: 1943.

Current laws: 1980, 1995, 1999 (families with low income),

2001(special paid leave), and 2002 (multiple-child pregnancy).

Type of program: Social insurance system.

Coverage

Employed persons, domestic workers, unemployment benefit

recipients, newspaper vendors, small rural products vendors,

and pensioners.

Special scheme for civil servants.

Source of Funds

Insured person: None.

Employer: None.

Government: Earmarked proceeds of various taxes help

finance benefits.

Qualifying Conditions

Family allowances: Child must be under age 14 (age 18 if a

student, no limit if disabled). The benefit is paid from the day

the mother is confirmed as being pregnant.

Cash maternity benefits: The benefit is paid on the expected

date of childbirth.

Prenatal multiple-child pregnancy allowance: In cases of

multiple-child pregnancy, the benefit is paid from the day the

mother is confirmed as being pregnant. The benefit is equal to

3 times the amount for a single-child pregnancy.

Special paid leave: Paid to a salaried worker who adopts a

child.

Low-income family allowance: Paid for children or

dependents up to age 18; persons who have exhausted

coverage under the unemployment scheme and are still

unemployed; or for families in which a woman is the sole

breadwinner.

Family Allowance Benefits

Family allowances: The standard rate is not less than 16% of

the monthly minimum wage for those whose incomes are less

than 6 times the national minimum wage; 8% for those with

incomes between 6 times and 10 times the national minimum

wage. For a family with children resulting from a multiple-child

pregnancy, the allowance is paid at the rate of three times the

standard rate until the children reach age 5, at twice the amount

until the children reach age 12, and at the standard rate until

the children are age 18. The benefit is paid every 2 months.

Cash maternity benefit: 100% of average earnings in the

preceding 6 months, payable for the period from 6 weeks

before until 6 weeks after the expected date of childbirth. The

benefit is paid on the expected date of childbirth.

Prenatal multiple-child pregnancy allowance: In cases of

multiple-child pregnancy, the prenatal allowance is paid at

three times the standard child allowance rate for every child,

starting from the day when the mother is confirmed as being

pregnant.

Special paid leave: Private-sector workers receive benefits

equivalent to the cash maternity benefit for a period of

6 weeks; civil servants receive 100% of salary during the leave

period.

Low-income family allowance: 16% of the minimum wage per

month; 32% if disabled.

Pediatric care for children up to age 6 and dental care for

children up to age 9.

Administrative Organization

Social Security Bank administers the program.
SSPTW: The Americas, 2003 ♦ 145

Venezuela

Venezuela

Exchange rate: U.S.$1.00 equals 1,600 bolivares.

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1940.

Current laws: 1966, 1991, and 2001.

Type of program: Social insurance system.

Note: The 1990 labor code established supplementary pension

funds financed by employer contributions only.

Coverage

Employees in the private and public sectors.

Voluntary coverage is possible under certain conditions for

persons who were previously covered.

Source of Funds

Insured person: An average of 1.93% of earnings.

Employer: An average of 4.82% of payroll.

Government: At least 1.5% of total taxable earnings to cover

the cost of administration. Contributes as an employer.

The maximum monthly earnings for contribution and benefit

purposes are 375,000 bolivares.

Qualifying Conditions

Old-age pension: Age 60 (men) or age 55 (women) with

750 weeks of contributions. The pensionable age is lower for

those in unhealthy and arduous occupations. Retirement is

not necessary. The pension is payable abroad.

Old-age grant: The insured was not eligible for a pension but

has at least 100 weeks of contributions during the last 4 years.

Disability pension: The permanent or prolonged loss of over

2/3 of working capacity with 250 weeks of contributions

(reduced by 20 contributions for every year under age 35),

including 100 weeks in the last 3 years before the onset of

disability. There is no qualifying period if the disability was

caused by an accident that occurred while covered.

Partial disability pension: The loss of between 25% and 66.6%

of working capacity.

Disability grant: For an assessed degree of disability of

between 5% and 25%.

Survivor pension: The insured met the qualifying conditions

for a pension or was a pensioner at the time of death. There is

no qualifying period if the death is due to an accident that

occurred while covered.

Survivor grant: The insured did not meet the qualifying

period for a pension but had at least 100 weeks of

contributions during the last 4 years. The grant is payable to

an eligible widow(er), a common-law wife, or to orphans.

Old-Age Benefits

Old-age pension: 9,000 bolivares a month, plus 30% of

average earnings during the last 5 years or the average of the

best 5 years in the last 10 years (whichever is higher), plus an

increment of 1% of earnings for every 50-week period of

contributions beyond 750 weeks.

The minimum pension is 40% of earnings.

Deferred pension: An increment of 5% of the pension for

every year that the pension is deferred after the pensionable

age.

Benefit adjustment: Periodic adjustments of benefits for

changes in prices and wages.

Old-age grant: An amount equal to 10% of total covered

earnings if the insured is not eligible for a pension but has at

least 100 weeks of contributions during the last 4 years.

Benefit adjustment: Periodic adjustments of benefits for

changes in prices and wages.

Permanent Disability Benefits

Disability pension: 9,000 bolivares a month plus 30% of

average earnings (payable after 6 months of disability), plus an

increment of 1% of earnings for every 50-week period of

contributions beyond 750 weeks.

The minimum pension is 40% of earnings.

Constant-attendance supplement: Up to 50% of the pension.

Partial disability: For an assessed degree of disability of

between 25% and 66.6%, a percentage of the full pension

proportional to the assessed degree of disability (if the

disability is the result of a nonoccupational accident).

Disability grant: Thirty-six months’ disability pension.

Benefit adjustment: Periodic adjustment of benefits for

changes in prices and wages.

Survivor Benefits

Survivor pension: 40% of the pension paid or accrued to the

insured is payable to a widow aged 45 or older or caring for a

child. Other widows receive a lump sum of 2 years’ widow’s

pension. A pension is also payable to a dependent widower

aged 60 or disabled. In the absence of a widow, the pension

may be paid to a surviving common-law wife.

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 14 (age 18 if a student, no limit if disabled).

Full orphans: The first full orphan receives 40% of pension;

other full orphans, 20%.
146 ♦ SSPTW: The Americas, 2003

Venezuela

The maximum survivor pension is 100% of the insured’s

pension.

Benefit adjustment: Periodic adjustment of benefits for

changes in prices and wages.

Other eligible survivors (in the absence of the above): An

amount equal to 10% of the insured’s total covered earnings is

payable to brothers, sisters, and parents.

Survivor grant: An amount equal to 10% of the insured’s

total covered earnings.

Funeral grant: The grant must not be more than five times the

insured’s monthly salary.

Benefit adjustment: Periodic adjustment of benefits for

changes in prices and wages.

Administrative Organization

Ministry of Labor provides general supervision.

Managed by a tripartite board and a director general, the Social

Insurance Institute administers the program.

Sickness and Maternity

Regulatory Framework

First law: 1940.

Current laws: 1966, 1991, and 2001.

Type of program: Social insurance system. Cash and medical

benefits.

Coverage

Employees in the private and public sectors.

Source of Funds

Insured person: An average of 1.79% of earnings.

Employer: An average of 3.46% of payroll.

Government: See source of funds under Old Age, Disability,

and Survivors, above.

All of the above contributions also finance work injury

benefits.

Qualifying Conditions

Cash and medical benefits: Current coverage is necessary.

Sickness and Maternity Benefits

Sickness benefit: 66.6% of earnings, payable after a 3-day

waiting period for up to 52 weeks; may be extended under

certain conditions. The benefit is reduced by 50% when the

patient is hospitalized.

Maternity benefit: 66.6% of earnings is payable for up to

6 months.

Workers’ Medical Benefits

Free medical services are normally provided directly to patients

by the medical facilities of the Social Security Institute for up

to a maximum of 52 weeks; may be extended for another

52 weeks for convalescent care. Benefits include general and

specialist care, hospitalization, laboratory services, medicines,

dental care, maternity care, appliances, and transportation.

Dependents’ Medical Benefits

Free medical services are normally provided directly to patients

by the medical facilities of the Social Security Institute.

Benefits include general and specialist care, hospitalization,

laboratory services, medicines, dental care, maternity care,

appliances, and transportation. The maximum duration of

medical benefits for dependents of pensioners is 26 weeks;

survivors of pensioners are entitled to medical service benefits

for up to 52 weeks.

Administrative Organization

Ministry of Labor provides general supervision.

Social Insurance Institute administers the program.

Social Insurance Institute operates its own clinics and

hospitals and contracts for other facilities.

Work Injury

Regulatory Framework

First law: 1923.

Current laws: 1966, 1991, and 2001.

Type of program: Social insurance system.

Coverage

Employees in the private and public sectors.

Source of Funds

Insured person: See source of funds under Sickness and

Maternity, above.

Employer: See source of funds under Sickness and Maternity,

above.

Government: See source of funds under Sickness and

Maternity, above.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period.

Temporary Disability Benefits

66.6% of earnings. The benefit is payable after a 3-day waiting

period for up to 52 weeks (may be extended for an additional

52 weeks if recovery is likely.)
SSPTW: The Americas, 2003 ♦ 147

Venezuela

Permanent Disability Benefits

Permanent disability pension: 66.6% of earnings, if totally

disabled.

Constant-attendance supplement: Up to 50% of the pension.

Partial disability: For an assessed degree of disability of

between 25% and 66.6%, a percentage of the full pension in

proportion to the assessed degree of disability. For an

assessed degree of disability of between 6% and 24%, a lump

sum equal to 3 years’ pension.

Workers’ Medical Benefits

Benefits include free general and specialist care,

hospitalization, medicines, laboratory services, appliances,

and rehabilitation services.

Survivor Benefits

Survivor pension: 40% of the insured’s total disability

pension, payable to a widow aged 45 or caring for a child.

Other widows receive a lump sum of 2 years’ widow’s pension.

A pension is also payable to a dependent widower aged 60 or

older or disabled and a common-law wife (in the absence of a

widow).

Orphan’s pension: 20% of the insured’s pension for each

orphan under age 14 (age 18 if a student, no limit if disabled).

Full orphans: The first full orphan receives 40% of the

insured’s pension; other full orphans, 20%.

Other eligible survivors (in the absence of the above):

Brothers, sisters, and parents may receive an amount equal to

10% of the insured’s total covered earnings.

Survivor settlement: An amount equal to 10% of the

insured’s total covered earnings. The settlement is payable if

the insured did not meet the qualifying period for a pension

but had at least 100 weeks of contributions during the last

4 years.

Funeral grant: 5,000 bolivares.

Administrative Organization

Ministry of Labor provides general supervision.

Social Insurance Institute administers contributions and

benefits.

Social Insurance Institute provides medical benefits through

its own clinics and hospitals.

Unemployment

Regulatory Framework

First law: 1940.

Current laws: 1966, 1991, and 2001.

Type of program: Social insurance system.

Labor law requires that employers provide a severance

payment for dismissal without due notice, for unjustified

dismissal, or involuntary retirement.

Coverage

Employees in the private and public sectors.

Source of Funds

Insured: 0.5% of earnings.

Employer: 1.7% of payroll.

Government: None.

The maximum monthly earnings for contribution and benefit

purposes are 375,000 bolivares.

The above contributions also help finance health insurance for

the unemployed.

Qualifying Conditions

Unemployment benefit: Fifty-two weeks of contributions

during the 18 months preceding the date unemployment began.

The insured must be available for training or suitable

employment.

Unemployment Benefits

60% of the average weekly salary during the last 50 weeks.

The benefit is paid for up to 18 weeks; may be extended to

26 weeks. Unemployed persons are entitled to a transportation

bonus, employment training, and guidance services.

Transportation grant: 200 bolivares.

Workers’ Medical Benefits

Unemployed insured persons and family members are covered

for health insurance for 26 weeks.

Administrative Organization

Ministry of Labor provides general supervision.

Employment services administer training and guidance.

Venezuelan Social Insurance Institute administers the program.

Family Allowances

Regulatory Framework

Marriage grant: A lump sum of 7,000 bolivares with

100 weekly contributions paid in the 3 years before marriage.

(The grant is provided under Old Age, Disability, and

Survivors.)