On November 7 th , 2020, Law No. 21.283 was published in the Official Gazette, Which readjusts the amount of the minimum monthly income, the maternal family and assignment and the family allowance. This Law will be retroactively in force since September 1 st , 2020.
Changes to Minimum Income Requirments
The Law increases the minimum monthly income to the following amounts:
- For employees over 18 years old and up to 65 years old: Increases to $ 326,500
- For employees under 18 years old or over 65 years old: Changes to $ 243,561
- For non-remuneration purposes: Increases to $ 210,458 .
Additionally, the Law readjusts the maternal and familiar assignment of the National Family Allowance System and increases the allowance outlined in article 1 ° of law No.18,020 which creates a family allowance for low-resources individuals.
Retroactive effect of the Law
The Law will be applied retroactively starting from September 1 st , 2020. Therefore, companies must settle any income discrepancies from the months of September and October as well as reassess their social security contributions.
Furthermore, as of December 31 st , 2020, companies must address how the Past Increase of the minimum monthly income will Affect the amount the employees are Entitled to as legal profit-sharing.
Next readjustment to the minimum monthly income
The Law establishes that, no later than April 2021, the Chilean President must present to the Congress, a bill that proposes a new readjustment for these minimums, to come into force on May 1 st , 2021.
If you have any questions regarding the matters discussed in this news alert, please contact the following attorneys or call your regular Carey contact.
This news alert is provided by Carey y Cía. Ltda. For educational and informational purposes only and is not intended and should not be construed as legal advice.