Modification to the unemployment insurance improved replacement rates

Law No. 21,628 has already been published in the Official Gazette and will enter into force on December 1. The regulations improve the replacement rate and coverage of unemployment insurance. They reduce access requirements and improve benefits, especially for those with fixed-term contracts for work or work sites.

For individual unemployment accounts (CIC, for its Spanish acronym) and the solidarity unemployment fund (FCS, for its Spanish acronym), the new regulations reduce the minimum number of contributions required.

As of December 1, 2023, required contributions under the CIC will be reduced from 12 to 10 for permanent and domestic workers and from six to five for workers with fixed-term contracts to access benefits. In the case of the FCS, the requirement decreases from 12 to 10 contributions in the last 24 months before the termination of the employment relationship.

The authority estimates that these changes will increase the coverage of the FCS from 26.4%, to 45.5% for fixed-term workers eligible for the solidarity unemployment fund.

In addition to relaxing access requirements, Law No. 21,628 also increases benefit amounts. For example, for benefits charged to the CIC, the replacement rate for the second month of payment rises from 55% to 60% of the average remunerations.

The table of benefits is as follows:

Cases of catastrophes or health alerts

A noteworthy aspect is the special attention to catastrophes or health alerts involving the paralyzation of activities. The law incorporates automatic adjustments in access requirements and benefit amounts to react quickly in the first two months of the crisis.

In areas declared in a state of catastrophe due to public calamity, disaster, or health alert, the law establishes more flexible access requirements and unique benefits, such as reducing the number of contributions required. The new rule will require eight contributions if workers have an indefinite-term contract or are TCPs and four contributions if they work under a fixed-term contract.

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