Chile: Gov't Pension Fund Withdrawal Draft Advances in Senate

Chile's Senate approved on Thursday the second withdrawal of 10 percent of individual pension funds (AFPs), aiming to support the population during the economic crisis unleashed by the COVID-19 pandemic.

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Chile: Second Fund Withdrawal Bill Goes Into a Debate

The lawmakers approved the government's draft with 35 votes in favor, one against, and five abstentions, allowing the withdrawal and establishing that those who access it have to pay the corresponding income tax. The opposition tried to avoid having this economic rescue be considered as an income to prevent the population from later having to pay back an income tax, but the idea was not accepted.

The draft also points out that top government officials such as lawmakers and ministers won't be able to withdraw their share. People can also access the pension funds on two occasions, half of the pension within 15 days each. This will be considered a single exceptional withdrawal.

Opposition lawmakers criticized the draft pointing out that it lacks social inclusion as terminally ill patients cannot access the pensions. Nonetheless, the majority agreed on the urgency of the economic rescue. The draft will now pass to the lower house for further debate.