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Third
This week the government presented a 10% AFP withdrawal project quite different from the three that have been previously approved. The current project is more limited, it is not universal and its focus is mainly restricted to the payment of debts. But what kind of debts do you have to have to access? What are the deadlines that will govern? Is there a tax to withdraw? What other differences are there with previous retreats?
Here are 10 questions to understand in simple terms, how the new withdrawal proposed by the government will work, if this project is approved. And what comes for processing.
Who can access?
All affiliates who have pension funds in their AFP individual capitalization account and who decide to request withdrawal for any of the five causes defined by the project can request withdrawal. In addition, those who want to demand the payment of alimony debts can make the request, a cause that will have priority over any of the other five.
How much can be withdrawn?
As in previous withdrawal projects, 10% can be withdrawn, with a maximum limit of UF150 ($4.7 million) and a minimum of UF35. In case someone has only UF35 or less, they can withdraw it all.
What are the types of debt to access?
There are five categories of debt for which the withdrawal of pension funds may be required. And the withdrawal can be requested for one, or several of them, depending on what the project proposes so far, but other causes might also be incorporated along the way, since some deputies have requested this from the government. In the Executive they are evaluating it.
First, there are the current debts that a person has with health institutions and that have been contracted until March 31, 2022. This applies both to debts with a health insurance plan (such as isapres or Fonasa), whether public or private, and with institutional providers (such as hospitals, clinics, outpatient centers and laboratories). The Superintendence of Health will have to accredit them prior to transfer. Only debts that the member has contracted in a personal capacity can be paid.
Second, the draft may be required to increase savings to apply for subsidies for the purchase of a first home. If the saver for any reason stops applying for or renounces the subsidy, the receiving entity must replenish the withdrawal resources to the member’s AFP within a period not exceeding 15 days.
Third, to pay first home mortgage debts of up to UF4,000 ($127.5 million) and that have been contracted before March 31, 2022. Only debts that the member has contracted in a personal capacity can be paid.
Fourth, for the payment of debts for basic services that are due as of March 31, 2022, that is, to pay debts for sanitation services (water), electricity and gas. Only debts that the member has contracted in a personal capacity can be paid.
As the fifth and last point are other financial debts, whether bank and non-bank, and that have been contracted until March 31, 2022 in the personal capacity of the withdrawing member. Here are mortgage and consumer loans with banks, for example. It is also allowed to pay the credit card quota, either in pesos or dollars.
And among the non-banking institutions that fall into this category, from the government they assure that they can be all non-banking entities, such as, for example, mutual societies, but as long as they are creditable debts, since to request the money order you have to accompany the background that accredit debt and the data of the creditor entity.
How should the debt be accredited?
That is not established by the bill. However, he points out that once the law is published, the regulators will have to issue regulations establishing the guidelines for accrediting the debt. These regulators are: the Commission for the Financial Market, the Superintendence of Electricity and Fuels, the Superintendence of Sanitary Services and the Superintendence of Health.
Do you have to be in arrears or only debts to access?
It is not necessary to prove default, only have debts.
Is the withdrawal taxed?
This draft is not taxed, as are all the withdrawals that have been approved, with the exception of the second, where taxes were paid when withdrawing.
Can I pay a single account or several?
You can choose all the debts that the member wishes to pay, as long as they do not exceed the amount that can be withdrawn. In addition, there is no order of priority: that is, each one chooses the accounts that he considers to be a priority. Here the only exception is the debt for alimony, which will always have priority.
Is the money passed to me and then I pay it to the institution that I owe?
No, the money never passes through the hands or the member’s personal account, since the AFPs will transfer the funds directly to the financial institution. This, with the exception of alimony debts, where the money goes into the claimant’s pocket.
Do I have to pay anything for this process?
No. The withdrawals, payments and other procedures that must be carried out by the AFPs and the creditor entities must be carried out without any charge for the affiliates. When paying the debt, the delinquency, interest, or readjustments, if any, must be paid. But no criminal interest, fines or other associated expenses can be applied.
Do I have to return the withdrawn funds?
No. But the project does establish on a voluntary basis that members who so wish can repay all or part of the funds used through an additional voluntary contribution equivalent to 5% per month. Until now, only the third withdrawal has proposed something similar: there it was stipulated that people might contribute an additional 1% if they wished, but it has not been very successful, since, as of February, only 213 more affiliates had requested it. of 7 million who had made the third withdrawal.
What comes in the project
First, it must be clear that this project is just being processed in Congress. It has already been approved by the Treasury and Labor commissions of the Chamber of Deputies and on Monday it will be voted on in the room. If it is approved there, then it must continue its process in the Senate.
In any case, if it manages to be approved in its entirety by Congress, the project will enter into force the month following the law is published. Once that month is over, people will be able to request this withdrawal in their AFP.
From that moment, there will be a period of one year to make the request, as has happened with previous transfers. But in this period there is an exception: the request for alimony debts will not have a time limit and will be something that from now on can be requested permanently.
For the rest of the causes, the following applies: once the request has been submitted, the AFP must inform the creditor institutions within the following 15 business days regarding the request for this withdrawal to pay debts. Then, the creditor entity will have a period of 10 business days to inform the AFP of the amount of the debt to which the withdrawal can be allocated. You must also inform each member regarding it.
In the event that the institution does not have a debt record in the name of the affiliate in question, it must report it to the AFP. In turn, the administrator, within the following five business days, must inform the member of this situation, giving him a period of 15 business days to rectify his request or information. In that case, the affiliate can indicate new purposes for the amounts withdrawn.
