National Government regulated the access and operation of the Social Protection Floor – PPS

Through Decree 1174 of 2020, the National Government regulated the access and operation of the Social Protection Floor (“PPS”) included in article 193 of Law 1955 of 2019 (National Development Plan 2018-2022). Next, we include the main news.

 

Social Protection Floor.

The Social Protection Floor (PPS) is made up of: (i) the Subsidized Health Scheme; (ii) an Inclusive Insurance that covers the risks derived from work activity; and (iii) the Periodic Economic Benefits (BEPS). The latter constitute a complementary old-age protection mechanism.

* In no case will economic benefits be recognized in the General System of Social Security in Health when belonging to the Subsidized Regime.

Scope of application.

1. The following will be required to be bound to the PPS: (i) workers or contractors who receive a total monthly consideration of less than one (1) current legal monthly minimum wage (“smlmv”); and (ii) people who have different employment or service provision ties whose monthly sum of income does not exceed one smlmv.
2. Those who meet the following conditions will be linked volunteers to the PPS:

• Not having a labor relationship.
• Not having a contract for the provision of services.
• Not having the ability to pay to cover the amount of the contribution to the Comprehensive Social Security System.
• Have a total monthly income of less than 1 smlmv.

* The PPS does not apply to those who have a monthly income of more than one (1) smlmv.

Stages

The PPS will be developed in accordance with the following stages:

1. Registration of the employer / contractor with the BEPS administrator.
2. Link of the worker / contractor to the PPS.
3. Payment of contributions.

Register of Employers and Contractors

Employers and contractors who have at their service people with a monthly income of less than 1 smlmv must register with the Administrative Entity of the BEPS. Said registration must be made at the time of making the first contribution to the PPS.

Contributions

Contributions will be classified according to the type of person linked to the PPS, as explained below:

 

Mandatory linker contributions	Contributions of linked volunteers
Responsible party: employer or contractor. Periodicity: monthly (it can be done at any time during the month). Value: 15% of the monthly income obtained by the worker / contractor (mandatory linked). * It must be an additional value to the one agreed for the activity to be carried out. This value cannot be attributed to the worker / contractor.	Responsible : linked volunteers. Periodicity: monthly. Value: 15% of monthly income.

 

* Associates may make additional voluntary contributions, depositing them directly in the individual savings account of the BEPS.

Contribution limit

The value of the maximum annual contribution to the PPS may not exceed the value set for the BEPS, which for 2020 is COP $ 1,260,000. In case of exceeding it, they will be counted for the following year.

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Inspection

The UGPP will be in charge of carrying out the respective control of the contributions.

Compliance with obligations

The registration of a worker / contractor to the PPS does exempts:

1. To the employer for the payment of social benefits and other claims arising from the employment relationship.
2. To the contractor of the fulfillment of the other obligations of the nature of the contract.

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Possibility of voluntary affiliation to the Comprehensive Social Security System (SISS)

On a voluntary basis, the worker or contractor (earning less than 1 smlmv) may be affiliated with the SISS. For this, the contribution must be made on an IBC equivalent to 1 smlmv.

Entry into operation of the PPS

The PPS will take effect from February 1, 2021.