Government bill for withdrawal of 10%: Senate Commission eliminates reimbursement, low term for payment and makes it universal

Not a week had passed since the government entered Congress on the project to withdraw 10% of the AFPs, when this Tuesday the United Finance and Labor commissions of the Senate dispatched the initiative to the room after a fierce vote.

Thus, the government scored a victory because it managed to keep the project going, but it also had to give a lot along the way, so the proposal was very similar to that of the opposition, but with a relevant difference: withdrawals are taxed. Among the issues that the senators changed, is that the withdrawals will be universal, that is, all AFP affiliates can access, with the exception of high-income public authorities, such as parliamentarians and ministers. Likewise, the senators rejected that there be a mandatory reimbursement of the withdrawn funds, and shortened the deadline for payment to a maximum of 30 business days.

In what the Executive has not been successful so far, is that its project is voted on Wednesday in the Senate room. Despite the fact that this Monday the same president of the Finance Commission, Jorge Pizarro (DC), had confirmed that the initiative would be seen in the room on Wednesday; this Tuesday the president of the Senate, Adriana Muñoz (PPD), said that she would not put it on the table for this Wednesday, and that only the opposition constitutional reform will be seen.

At the same time, the government continues to press for the initiative to be seen this Wednesday, and although there are those who point out that the vote of both could happen, others are betting on Thursday for the government’s initiative. The Minister of the Segpres, Cristián Monckeberg, said that “we hope that we can have a space on the table tomorrow (Wednesday), to be able to review it together with the reform of the Chamber. I think it would be the most helpful. We are going to continue talking with the Chamber table and the president to achieve that goal.

As Senator Alejandro Navarro (PRO) will not vote this Wednesday, the opposition needs three votes from Chile Vamos to get the approval of its reform, since it requires 3/5 of the senators in office. In the first withdrawal of 10%, five official senators approved. Three of them are the UDI David Sandoval, Iván Moreira and José Miguel Durana; and the remaining two are RN Juan Castro and Manuel José Ossandón. At least two of them, Durana and Sandoval, affirm that after the modifications made to the government project, they will now abstain from the opposition initiative. “Unless some very exceptional situation occurs,” says Durana. “The only difference (between the projects) lies solely and exclusively in the fact that one has a clear path (that of the government), and the other has a tremendous barrier (the TC),” says Sandoval about this decision.

On the other hand, the government also needs three opposition votes to approve its initiative, in case all of Chile Vamos is aligned.

The general vote on Tuesday was very close in the united commissions, but finally the idea of ​​legislating the government project was approved with seven votes in favor and three against.

Initially, the entire ruling party voted in favor adding four votes, that is, José García Ruminot (RN), Rodrigo Galilea (RN), Jacqueline van Rysselberghe (UDI), and Ena von Baer (UDI). But three opposition parliamentarians also abstained, and three others voted against; therefore, the vote had to be repeated and abstentions were added to the majority by regulation.

Senators Ricardo Lagos Weber (PPD), Carlos Montes (PS) and Adriana Muñoz (PPD) voted against the idea of ​​legislating. The two senators who are negotiating the pension reform with the government, Carolina Goic (DC) and Juan Pablo Letelier (PS), abstained; in addition to Senator Pizarro.

After the changes that the government project underwent, the initiative -which was dispatched to the Senate chamber- indicates that all AFP affiliates may withdraw up to 10% of the balances they have in their individual account, with a minimum of 35 UF and a maximum of 150 UF. That was the first change that was introduced, since the government project aimed at a maximum withdrawal of 100 UF. Thus, it remained in the same amounts as the opposition initiative.

In case an affiliate has less than 35 UF in the total of his account, he will be able to withdraw it all.

The only ones who cannot access this withdrawal are high-income public officials, such as ministers and parliamentarians.

The great triumph of the Executive, and the main difference with the opposition initiative, is that withdrawals will be taxed, but this will depend on the income each person has.

On the other hand, the AFPs must make the payment of half of the requested amount in 15 business days from when the affiliate makes the request, and the remaining 50% of the money in the next 15 business days from the first payment.

The latter was precisely the proposal that had been approved in the Chamber of Deputies, since there it was proposed that it be 30 business days in total, but then the Senate Constitution Commission shortened it to 15 business days for the payment of 100% of the money. This is also compared to the 60 business days that the government project initially raised.

Likewise, one of the most controversial articles was rejected: the obligation to refund withdrawn funds. It was also rejected that people have to withdraw their voluntary savings first.

As this is a project that deals with social security and, according to the Constitution, only the Executive can make changes on this matter, all the indications that the senators entered were declared inadmissible during the session. This is why the changes that were approved occurred because the government backed the indications that had been entered by some parliamentarians from Chile Vamos.