A new law has established in Peru for unemployed people in the private pension program. It will target older workers who have not been in employment for one year and beyond. The Law got published in the Official Gazette known as El Peruano on 3rd May 2019 as Law 309309.
The Law provides that at the time of the benefits application, men must have attained 55 years, whereas women should attain 50 years to be eligible. To apply, one must have been in a state of unemployment for 12 months consecutively or more. The applicant will need to prove the date their employment ceased by providing a document that shows the specific time.
Beneficiaries will be able to redeem the Recognition Bonus
If the applicant was obtaining income from self-employment amid the 12 months of unemployment, the amount of the total income should not exceed or be equivalent to the cost of the seven Tax Reference Units. The distinctive regime provides beneficiaries the entitlement to use the Recognition Bonus.
This bonus is an allowance permitted to affiliates that made contributions to the Oficina de Normalizacion Provisional. The ONP is a public agency that manages the country’s pension system. It later transferred its pension capital to Administradora de Fondos de Pensiones (AFP) when it got established.
The waiting period increased from nine months to 2 years
The payments made by the partners to the AFP are cashed back via Recognition Bonus. Following the new Law, if a staff retires early due to lack of employment, he or she will stay for two years from when he applied for individual retirement to cash in the bonus soon.
Initially, the waiting period used to be nine months. If the employee retires at the standard legal age, he can redeem the Recognition Bonus by the time he reaches the age of 65.