Guide to Global Payroll Management - 2020 - B-11

Social Security Totalization Agreement Summaries
The request must include the same information as is required for a certificate of coverage from the U.S. (see page 7-3) except that the both the employee's Chilean Registration
Number for Social Insurance and the National Identification Number (RUT) must be provided.

Rules on combining work credits
An employee who does not have enough work credits to qualify for Chilean social security benefits may combine social security credits from the U.S. and Chile to meet eligibility
requirements for Chilean benefits.

Summary of social security benefits
Chile provides benefits under both an old and a new pension system. Under the old pension system, old-age, survivors, and disability insurance benefits are based on a worker's
average earnings and length of coverage. Under the new "privatized" system, employees
contribute to individual investment accounts and benefits depend on the investment yield of
the accounts.
Retirement/old age. Under all programs, men must be age 65 and women age 60.
Under the old system, the length of time for contributions depends on whether the worker
was salaried (both men and women salaried employees must have 10 years of contributions
and must have contributed within two years before reaching retirement age), a wage earner
(different contribution periods for males and females), or was a public employee or journalist.
Under the new system, no minimum contribution periods are required. There is a guaranteed minimum benefit with 20 years of contributions. Early retirement is possible if an individual's account balance is sufficient to fund a specified minimum level of benefit.
Disability. Under the old system, there are different impairment requirements and contribution levels depending on whether the worker was salaried (same for men and women), a
wage earner, or a public employee or journalist.
Under the new system, a worker must be under the normal retirement age and have an
impairment that permanently reduces working capacity by at least 50%. The worker must
have been contributing at time of the onset of disability or have had contributions in 6 out of
the 12 months immediately preceding disability onset.
Family. Chile has no provision for family benefits to the dependents of retired or disabled
persons under either the old or new system.
Survivor. Under the old system, a widow or disabled widower is eligible for benefits
based on different circumstances if the deceased was a salaried employee, a wage earner,
or a public employee or journalist. Children are eligible for survivor benefits based on whether the deceased was a salaried employee, a wage earner, or a public employee or journalist.
Under the new system, a widow or disabled widower can receive benefits if the worker
was paying contributions or receiving an old-age or disability pension at the time of death.
Survivor benefits for unmarried children are available up to age 18 (age 24 if the child is a
full-time student), or any age if the child is disabled.
Lump sum death benefit. Under all programs under the old system, the deceased must
have been contributing or receiving a pension at the date of death. The benefit is a one-time
payment equal to a maximum of three months of the minimum wage.

B-11
Guide to Global Payroll Management - 2020

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