Guatemalan Institute of Social Security
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The Guatemalan Institute of Social Security (abbreviated as IGSS in Spanish) is the branch of the Guatemalan Ministry of Work and Social Provision that provides Hospital and Clinical services; pensions and income protection benefits, and employment counseling for salaried employees in Guatemala.
The Institute was created in 1946 under the administration of President Juan Jose Arevalo after the Guatemalan legislature passed Congressional Act 256 that ushered in a series of labor reforms, including the creation of a pension system and clinical services for employees.
Formation of the Institute
The Institute was a development of the labor reforms instituted by the government of Juan Jose Arevalo. In his efforts to mobilize the social protection infrastructure of Guatemala, the Arevalo administration brought two technocrats in the field of Social Security to help them design the Social Security system. Dr. Walter Dittel of Chile and Oscar Barahona Streber of Costa Rica. The technocrats made a socio-economic evaluation of the labor-capital landscape of the country.[1] After a year of study, and a published report named Basis of the Social Security System in Guatemala, the Guatemalan legislature created a Social Security Act No. 256 and President Juan Jose Arevalo signed the Institute of Social security into law October 30, 1946.[2]
Pension & Program Evolution
Work Injury Program
The work related incident pension and income protection for emergencies program was enacted in 1947 and rolled out at the national level between 1948 and 1949.[3] The Program covers all workers insured by the Institute. The work injury program covered 50% of individual earnings and after the 1994 it started covering 66% of earnings. The minimum daily benefit payment is eight Quetzales and the monthly maximum is two thousand four hundred Quetzales.[4]
Maternity Insurance
Instituted in 1953, the Guatemalan maternity insurance represented 50% of earnings and after 1968; 100% of earnings. After the 2005 reforms women would have to have contributed at least three months into their pension fund to receive the maternity benefits. To be a recipient of benefits, women have to contribute one percent of your gross earnings for the rest of your life.[4]
Sickness & Maternity Act (1968)
In 1968 the Institute pension programs were reformed and combined into one program, including the Maternity Insurance program. The reforms included a 2% gross income, for life contribution by individual earners and then employers contribute 40% of the 2% gross income premium, and the government pays 20% of the 2% gross income premium.[4] The initial program was limited to the department of Guatemala but the coverage was extended to 8 departments in 1979 and to the department of Escuintla in 1989.[3] After the 1994 reforms, the coverage of the pensions listed under the program got extended to the entire country.[5]
Old Age, Disability, & Survivors Program
The Old Age, Disability and Survivors pension structure was place into law in 1969 with the same department coverage as the coverage instituted in the Sickness & Maternity act of 1968.[5] The program saw reforms for national coverage much earlier than the Sickness and Maternity program with legislation to expand it across the 22 departments in 1977.[4] The fund for this program is funded by a 2% gross income contribution for life for salaried employees; 6% of declared earnings for self-employed individuals and 4% of the covered payroll. The state is mandated to pay 25% of the total of contributions to the program but it has never done so.[4]
Constitutional Reform (1985)
The right to Social Security coverage became a constitutional right in Guatemala in Article 100 of the Guatemalan constitution after the constitutional convention of May 1985.[5]