Social Security in Paraguay: Understanding Benefits and Regulations
Social Security Unit XV
Definition and Nature
Social Security is the set of theoretical principles and positive rules, based on social solidarity, designed to regulate the organization, competence, functions, and powers of social security institutions. It also defines its legal relationship with the government, beneficiaries, and contributors. The State, employer contributions, and the workers’ own work, supported through a social insurance system, protect workers from risks of a general nature and especially those of the workplace.
Benefits
Risks covered by social insurance in Paraguay, in accordance with the terms of the law, include the following for workers of the Republic:
- Non-occupational disease
- Maternity
- Occupational accidents and diseases
- Disability
- Old age
- Death
Regulations
National Constitution, Article 95: “The compulsory comprehensive social security system for employees and their families will be established by law. Its extension to all sectors of the population will be promoted.” Social security system services may be public, private, or mixed; in all cases, they will be supervised by the State. The financial resources of social insurance will not be diverted from their specific purposes and will be available for that purpose, notwithstanding the lucrative investments that can increase their patrimony. Since the enactment of the 1992 Constitution, not only have its clear provisions not been fulfilled, but the constitutional precepts have been constantly violated.
Retirement
Retirement is the right for workers to receive a lifetime monthly allowance in money when, for reasons of age, disability caused by accident or occupational disease, or disability resulting from common illness, they are permanently removed from labor service. The institute grants the insured the following retirements:
- Ordinary
- Disability due to common illness
- Disability due to occupational accident or occupational disease
Regular Retirement
An insured individual who is 60 years old and has at least 25 years of qualifying service will have a pension equivalent to 100% of the average salary of the last 36 months prior to the last contribution. Alternatively, having 55 years of age and 30 years of contributions or services identified will result in a pension of 80% of the average wages in the last 36 months preceding the last contribution.
Extraordinary Retirement
Extraordinary retirement was abolished by law in 1992 when Retirement and Pensions, which coexisted with the old age pension, were unified. At the same time, voluntary retirement and disability retirement by exoneration were eliminated.
Retirement Due to Accident or Occupational Disease
This will be determined according to the Disabilities Valuation Table, the Board of Retirement Rates, and the average salary of the 36 months prior to the initiation of disability.
Pension for Retiree’s Death
If the insured asset has 750 weeks of contributions (15 years), without the minimum age for retirement (55-60 years), or dies as a result of an accident or occupational disease, the family will receive a pension equal to 60% of the allowance. If the insured dies with less than 750 weeks of contributions (15 years), the heirs or beneficiaries will be awarded a cash benefit for a single payment equivalent to one month’s salary for each year of age the insured had.