Frequently Asked Questions: everything you need to know about the “Chile Apoya” Winter Bonus, Extension of Postnatal Leave and the new government benefits

In response to calls from various political and social sectors, the Government of Chile has decided to support those people most affected by the rise in the cost of living and utilities with vital new support as part of the Plan de Recuperación Inclusiva Paso a Paso (Step-by-step Inclusive Recovery Plan).

As was announced by President Gabriel Boric, the Government has decided to add two new benefits to the Plan: the “Chile Apoya” Winter Bonus and the Extension of Postnatal Leave. In addition to these, the Employment IFE (Emergency Family Income) and the Protege (Protect) Employment Subsidy have been extended. Below we respond to the most frequently asked questions about the new benefits.   

The “Chile Apoya” Winter Bonus

- What’s the difference between this bonus and the IFE?

- It is important to remember that the IFE was provided in a different type of scenario, one of strict lockdowns which led to two million people losing their jobs and income streams. Having said that, it is important to recognize that this bonus meets a similar objective, which is to cover families’ basic needs in the face of a rise in the cost of living. Even though the whole population is experiencing this same increase in inflation, it is a phenomenon which has the greatest impact on the poorest people, as most of their income goes towards food and heating. They therefore need more concrete support. In this case, we are aiming to reach the 7.5 million people most affected by the rise in the cost of living. 

How do the figures stack up when comparing the “Chile Apoya” Winter Bonus against the Universal IFE?

The Universal IFE benefited 17 million people over a six-month period, but at great cost, which in the current context is neither convenient nor justifiable. We are no longer in a situation in which people are unable to go out to work. To put things into context, the combined total of last year’s stimulus packages was over US$50 billion, whereas the cost of the Winter Bonus which we are proposing is US$1 billion.

-Will these new measures create more inflation?

-The scheme is focused on the sectors that most need it. This allows us to ensure that there will be no effect on inflation. The funds required to finance this scheme are modest compared to the wave of benefits and measures provided during the pandemic. Today, inflation is mainly responding to price increases at the international level, the rise in the cost of food and fuel, and to the price of the US dollar. In fact, the factor of internal demand has been leveling out, even falling slightly in recent months.

-Will eligible recipients receive the bonus per household or per person? And will it paid directly into their personal accounts?

-The benefit will be paid in the same way and through the same channels as other State benefits. For example, the Aporte Familiar Permanente (Permanent Family Assistance) is provided per household through the Social Security Institute (Instituto de Previsión Social, IPS). On the other hand, those who receive benefits like the Winter Bonus will receive it directly, just like other benefits they receive. For example, a household belonging to the most vulnerable 60%, made up of a mother, father, child under 18 and a senior citizen would receive 120,000 Chilean pesos for the child (paid to the mother) and 120,000 Chilean pesos for the senior citizen (paid to the senior citizen), totaling 240,000 Chilean pesos.

-When will the “Chile Apoya” Winter Bonus be paid?

-According to the bill, the “Chile Apoya” Winter Bonus will be paid in one installment in August 2022, although this depends on the time required to process the bill in Congress. It is important to emphasize that this bonus will not constitute pay or income in any legal sense, as a result of which, it will not be taxable, subject to any withholding or social security deductions.

-How are these measures being funded?

-Thanks to the fiscal discipline demonstrated this year, and increased funds from the annual income tax exercise, we are able to finance this bonus. This was explained in detail in the presentation on the Public Finance Report given on Monday by the Treasury Minister, Mario Marcel. It is also worth mentioning that these are one-off costs, which make it possible; otherwise, it would not be sustainable.

Postnatal Leave

-Until when will Postnatal Leave be extended? 

-Providing that the current bill is passed, our government will extend Postnatal Leave for UP TO 60 days for those people whose leave expired after May 1 and for those whose leave will expire before September 30.

For example:

1.- If a mother or father finishes their postnatal leave on July 20, providing the bill is approved, their leave would be extended for 60 days, until September 20.

2.- Meanwhile, if their postnatal leave ends on August 20, then the leave would be extended for 40 days, which is to say, for the days remaining until September 30.

September 30 was defined as the limit because that date marks the end of the current health alert that was declared so that additional measures could be implemented to address the COVID-19 health emergency.

-With respect to the postnatal leave extension, what will happen with regard to the mothers of children who are under 1 year old whose leave expired before the law comes into effect?

-Maternal working rights are inalienable, and as such, we have found a way to allow for retrospective receipt of the bonus. The government has entered an instruction to the bill to the effect that women who completed their postnatal leave between May 1 and the date on which the law comes into effect will be able to ask their employer to take advantage of the scheme by sending a certified letter to their employer and a copy to the Labor Directorate. 

For example: If a mother or father completed their postnatal leave on June 30 and already returned to work, they could ask their employer to retroactively use the scheme for up to 60 days, via the aforementioned certified letter and copy to the Labor Directorate.

Similarly, if necessary, mothers can obtain leave in the case of serious illness of a child under one year old, which consists of a cash benefit in order to finance the leave of absence granted to the sick child’s mother.

Likewise, for working women - whether they are in employment or self-employed - without the right to access daycare, there is the possibility of accessing the Protege (Protect) Subsidy for mothers with children under 5 years old. This provides a monthly stipend of 200,000 Chilean pesos for up to three months, which is intended to help care for children. We are looking to also extend this scheme’s application window until the end of the year.

The Employment IFE and Protege (Protect) Employment Subsidy

-The Employment IFE will be extended up until the end of the year. How long will the scheme’s benefits last for?

The objective of the Employment IFE is to foster participation and formal employment in the job market and to offer support for people to re-join the economy, especially in those groups who have struggled to do so, such as women, young people between 18 and 24 years old, men over 55 and persons with disabilities. Those who join the labor market and access the Employment IFE can continue to receive said benefits until December 2022, regardless of when they apply.

-The Protege Employment subsidy will be extended up until December 2022. How long will the scheme’s benefits last for?

-The Protege Laboral Subsidy is granted to working mothers caring for children under the age of 5, and who do not have access to daycare through their employer. It is a subsidy of 200,000 Chilean pesos for every child under the age of 5 that the worker/beneficiary has under their care. The Protege Laboral Subsidy will be extended to December this year and will issue payments until March 2023.

*For more information about the Chile Apoya Plan de Recuperación Inclusiva (Inclusive Recovery Plan), remember to visit www.gob.cl/chileapoya.