Venezuela: Gov’t Enacts Pension Protection Law, ‘Grandparents of the Homeland’ Mission

Caracas, May 9, 2024 (venezuelanalysis.com) – Venezuela’s National Assembly (AN) has approved legislation to increase pensioners’ income through a special fund financed by the private sector.

The “Law for the Protection of Social Security Pensions against the Imperialist Blockade” was introduced by Vice President Delcy Rodríguez and passed by parliament on Tuesday after its second discussion. 

“This is a healing law to tend to those who were the hardest hit by the brutal and criminal actions of US imperialism through the imposition of sanctions,” said AN President Jorge Rodríguez during the televised legislative session.

Venezuela’s working class and retirees have been the most affected by the country’s economic troubles due to US sanctions as well as corruption and disinvestment in the oil industry. The minimum wage has remained frozen at 130 bolívares since March 2022. At the time, it was worth US $30 but has since devalued to around $3.6. Pensions are pegged to the minimum wage.

The Maduro government has opted to slowly recover people’s income by increasing the public sector non-salary bonuses, which currently stand at $130 between the “Economic War Bonus” ($90) and the food bonus ($40) announced on May Day. The reliance on bonuses has drawn criticism from trade unions since labor benefits, including severance settlements, vacation pay, and social security contributions are based solely on workers’ salaries.

Private sector workers, who usually earn a higher salary than public sector ones, receive food bonuses from their employers as established by law. However, pensioners and public administration retirees only receive $70 and $25 per month in economic war bonuses, respectively, and have no food bonus equivalent. 

During Tuesday’s session, Rodríguez emphasized the crucial role of the Venezuelan state in supporting the private sector during the country’s economic crisis and called on businesses to now “step up and take responsibility” for increasing incomes for the elderly.

The new legislation establishes a special tax on private-sector earnings of up to 15 percent of their monthly payroll, including salary and non-salary bonuses. The contribution will be collected by the SENIAT tax authority and private entities who do not comply will be sanctioned. The government may exempt select companies at its discretion.

The bill did not establish a mechanism to supply additional income for retirees or clarify whether it would represent an increase in pension or an added bonus via the digital Homeland platform. Private employers are already required to pay contributions to the Venezuelan Social Security Institute (IVSS), computed as a percentage of worker salaries.

President Nicolás Maduro signed the pension protection law on Wednesday during the launch of the “Grandparents of the Homeland” social mission, which aims to enhance the overall living conditions of the senior population.

“This law is a step forward in the reconstruction of the protection and social security system established in the Constitution left to us by Chávez”, said Maduro in a live broadcast with pensioners and popular power organizations from the Simón Bolívar Park in Miranda State.

Maduro explained that the special tax on the private sector would contribute to a fund that would eventually “raise pensions and the integral income of grandfathers and grandmothers.” 

The Venezuelan leader added that the law was part of numerous initiatives to reach the grandparents’ mission’s goals, among them relaunching Misión Sonrisa (dental health), Oyendo Más (hearing aid program), Misión Milagro (eyesight recovery) as well as other healthcare, food and clothing programs.

The “Grandparents of the Homeland” mission will likewise see the creation of 335 retirement housing units and tourism programs to be launched in the next three months. 

Furthermore, Maduro proposed a national grandparents’ movement leading to a National Congress of Grandfathers and Grandmothers on May 29 to debate other needs and projects with this population sector.

During Wednesday’s broadcast, Maduro also announced additional funds for a second set of 4,500 local projects chosen by communities in a national consultation carried out on April 21. Each project will be assigned $10,000 and administered 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 create a system for those who advance and fully comply with their first project to carry out the second one as well,” the president explained.

Maduro went on to announce four annual consultations to approve communities’ local projects funded with state resources that would “go directly to the people without intermediaries.” All the projects chosen in the national vote varied from developing means of production to addressing public service shortcomings.