Venezuela Implements Pension Safeguard Legislation, Launches 'Grandparents of the Nation' Program

Title: Shoring Up Social Security for Venezuela's Elderly: The New Pension Protection Law

May 9, 2024 | Our Website

In the thick of Venezuela's economic strife, the National Assembly (AN) has taken a step toward alleviating the hardships facing pensioners by approving a new law to beef up social security pension protection.

The law, colloquially dubbed the "Law for the Protection of Social Security Pensions against the Imperialist Blockade," was championed by Vice President Delcy Rodríguez and passed in parliament on Tuesday following its second round of deliberations.

"This is a healing balm to care for those who have suffered the most from the brutal and criminal actions of US imperialism through the imposition of sanctions," AN President Jorge Rodríguez announced during the televised legislative session.

Pensioners and the working class have felt the brunt of the country's economic woes, compounded by US sanctions, corruption, and disinvestment in the oil sector. Since March 2022, the minimum wage has remained stagnant at a pittance of 130 bolívares. Originally worth about US $30, it has since dwindled to around $3.6—a reflection of the soaring inflation ravaging the nation. Pensions are tied to the minimum wage.

The Maduro government has responded to this predicament by gradually raising citizens' income levels, including bolstering the public sector's non-salary bonuses, which currently stand at $130, consisting of the "Economic War Bonus" ($90) and the food bonus ($40) revealed on May Day. However, this reliance on bonuses has drawn scorn from labor unions, complaining that labor benefits, including final settlements, vacations, and social security contributions, are wholly based on workers' salaries.

While private-sector employees generally earn a higher salary than their public counterparts, they receive food bonuses from their employers, as mandated by law. On the other hand, pensioners and public administration retirees only reap $70 and $25 per month in economic war bonuses, respectively, and lack a food bonus counterpart.

Throughout Tuesday's session, Rodríguez underscored the critical role of the Venezuelan state in supporting the private sector during the economic crisis and called upon businesses to embrace their responsibilities in elevating the elderly's income.

Effective immediately, the new legislation imposes a special tax on private-sector earnings of up to 15 percent of their monthly payroll, encompassing salary and non-salary bonuses. The levy will be colected by the SENIAT tax authority, and companies that fail to comply will face penalties. The government retains discretion to exempt certain enterprises.

The bill fails to elucidate a mechanism for provisioning additional income for retirees nor clarify whether it represents an increase in pensions or a supplementary bonus via the digital Homeland platform. Private employers are already obligated to contribute to the Venezuelan Social Security Institute (IVSS), computed as a percentage of employee salaries.

President Nicolás Maduro inscribed the pension protection law on Wednesday at the launch of the "Grandparents of the Homeland" social mission, an initiative aimed at augmenting the living conditions of senior citizens. "This law represents progress in the reconstruction of the protection and social security system established in the Constitution bequeathed to us by Chávez," Maduro commented during a live broadcast with pensioners and popular power organizations from the Simón Bolívar Park in Miranda State.

Maduro illuminated that the special tax on the private sector would supply a fund destined to boost pensions and the overall income of grandparents. The Venezuelan leader emphasized that this law was part of numerous initiatives aimed at achieving the "Grandparents of the Homeland" mission's objectives. Additional measures underscored the relaunch of smile-based dental health, hearing aid, and eyesight recovery programs as well healthcare, food, and clothing initiatives.

The "Grandparents of the Homeland" mission will also foster the creation of 335 retirement housing units and tourism programs scheduled for the next three months. Moreover, Maduro proposed a national grandparents' movement leading to a National Congress of Grandfathers and Grandmothers on May 29 to debate other necessities and projects geared toward this demographic sector.

Wednesday's broadcast also witnessed Maduro announcing additional funds for a second set of 4,500 locally elected projects chosen in a national consultation held on April 21. Each project will receive $10,000 and be overseen by 4,500 communes (assembly-driven popular power organizations) across the country.

"In the consultation, there was a winning project and one that came in second place. We are going to establish a system to enable those who excel in and fully complete their first project to execute the second one as well," Maduro explained.

During Maduro's broadcast, he also revealed plans for four annual consultations to approve communities' local projects funded with state resources that "will flow directly to the people without intermediaries." These projects adopted during the national vote encompassed diverse objectives spanning the production sector to addressing public service shortcomings.

Restoring pensioners' financial security may prove challenging in the face of Venezuela's ongoing economic instability. However, this new piece of legislation signals the government's commitment to supporting the country's elderly population.

The General-News sector reported that the Venezuelan government, in an effort to aid the elderly population, enacted a new law to bolster social security pension protection, dubbed the "Law for the Protection of Social Security Pensions against the Imperialist Blockade".
The new law, approved by the National Assembly, includes a special tax on private-sector earnings of up to 15 percent of their monthly payroll, a move intended to provide funds for boosting pensions and the overall income of grandparents.
The politics surrounding this move have been contentious, with labor unions critical of the reliance on bonuses and the lack of clarity on whether the law represents an increase in pensions or a supplementary bonus for retirees.