Tuesday 25 January 2022

Caja prepares temporary amnesty of fines, interest, and surcharges

Financial Management will deliver a proposal to the Board of Directors for the temporary forgiveness of fines, interest, and surcharges for defaulters. In addition, retroactive charges would be for four years, instead of 10 years.

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QCOSTARICA – The Board of Directors of the Caja Costarricense de Seguro Social (CCSS) will learn, as of next January, a plan to implement a temporary amnesty of fines, interest, and surcharges to defaulting employers and independent workers.

As of the third quarter of this year, there were 524,697 independent workers in Costa Rica, of which 58% did not have insurance, that is, 302,809 people.

Likewise, it will be proposed that the autonomous institution can make retroactive charges for four years in unreported social charges, instead of 10 years, as proposed last March, with the reform project to the regulation of affiliation of independent workers to the CCSS,  confirmed Gustavo Picado, the Caja’s financial manager.

Picado explained that the third component will be an improvement in the process of registration, reporting and removal of the status of the independent to the Caja, which is expected to be entirely online. This change will take longer to implement, as it requires updating computer and technological systems.

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“The reform is not only about the regulation of independent workers. There is also a proposal for there to be greater flexibility in the payment arrangements for defaulters so that the disbursement (of payment) is relatively less than what we are demanding today. It is to favor a payment agreement that will not cancel the main debt, but the Caja can make an amnesty in terms of interest, surcharges and fines for both employers and independent workers,” explained Picado.

The financial manager emphasized that the final objective is to increase the coverage of the Health Insurance and the Disability, Old Age and Death (IVM) regime to improve the financing of social security and the sustainability of both insurances.

The proposed changes must be approved by the CCSS Board so that, later, they go to public consultation to receive comments from social sectors, employers and the Government.

Amnesty process

The amnesty will be proposed based on a 1996 criterion issued by the Office of the Comptroller General of the Republic. At that time, the Comptroller’s Office found that the Board of Directors of the Caja is empowered to establish a temporary program of payment arrangements with defaulters.

The CCSS, at the time, established the benefit only with employers since the figure of the independent worker was not created until 2005.

“The Comptroller recognized in its opportunity, 25 years ago, that the Caja, as part of the regulatory power to set fines and surcharges, is also assisted by the power, through a duly reasoned agreement, to establish a temporary amnesty program,” said the Financial Directorate of the CCSS, in a report presented to the Board of Directors on August 10.

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The Directorate also argued, as recorded in the minutes of the Board of Directors, that the Attorney General’s Office has issued criteria in which it establishes the relevance of debt forgiveness “when there is a legitimate public purpose” and that it is of a general nature, that is, debt forgiveness cannot be applied only to a specific person or employer.

Up to October last, arrears to the Caja by employers and independent workers was ¢457.5 billion, according to the financial statements of the CCSS. These documents do not include a breakdown of the principal, interest, penalties, and surcharges.

The proposal that will be known next January does not include the State’s debt with the CCSS, as it is in a joint negotiation process.

 

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