Employers must withhold more social security contributions from employees’ paychecks according to a presidential decree of February 21, 2008. The decree also sets new maximum and minimum levels for retirement benefits paid by the government.
Key details
The main changes included in the decree are:
- As of March 1, 2008, the maximum monthly income subject to social security contributions increased. Until March 2008, employers withheld 11 percent of gross monthly salaries of up to ARS 6,750 (around USD 2,136). Under the new regulation, this cap was raised to ARS 7,256 (around USD 2,296) and will be further increased to ARS 7,800 (around USD 2,468) in July 1, 2008.
- Retirement pensions paid by the government are to increase by almost 16 percent in an effort to compensate pensioners for inflation. This will be accomplished in two steps: 9.9 percent as of March 2008 and 5.3 percent as of July 2008. As a result, minimum pensions increased from ARS 596 (around USD 189) to ARS 655 (around USD 207) as of March 1, 2008, while maximum pensions moved from ARS 4,374 (around USD 1,384) to ARS 4,702 (around USD 1,488). Another similar increase is planned to take place on July 1, 2008. It will raise pensions to ARS 690 (USD 218).
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