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Original article: Sala cuna con tijera al Seguro de Cesantía: Kast promete el beneficio, pero recorta aportes para el desempleo

The administration of José Antonio Kast announced on Monday the guidelines for the Universal Childcare Project, one of its cornerstone labor proposals, though the announcement was met with a controversial funding formula that will reduce employer contributions for unemployment.

According to the far-right president, this initiative aims to extend benefits to all working mothers in the country through a phased implementation system. However, the chosen method for funding this expansion—a 0.35% additional contribution by employers that will be offset by a corresponding reduction in contributions to the Unemployment Insurance—has raised questions about the true impact of the measure on the social safety net.

Specifically, there will be two reductions: on one hand, the percentage going to individual accounts for Unemployment Insurance will decrease from 2.4% to 2.2% (a reduction of 0.2 percentage points); on the other hand, the contribution to the Solidarity Fund will drop from 0.8% to 0.65%, representing a decrease of 0.15 percentage points.

For self-employed workers, this payment will be made similarly to other Social Security contributions, reported Bio Bío Chile.

Labor Minister Tomás Rau defended the decision, claiming that «there will be no increase in labor costs, and there is no tax on work», backing the measure with projections from the Superintendence of Pensions indicating that this redistribution of resources «does not jeopardize the long-term sustainability of the unemployment system».

In addition to the contributions, the guidelines include a fiscal contribution of 11,631 UTM, equivalent to approximately $10 million, over the first two years following the law’s enactment, along with an explicit state guarantee that, should the fund’s resources be insufficient, the shortfall will be covered by the Treasury.

According to a financial report prepared by the Budget Office (Dipres), the Childcare Fund is expected to raise around $268 billion during its first year of operation thanks to the new 0.35% contribution offset by the reduction in unemployment contributions, while the expenses for financing private childcare facilities are projected to reach about $28 billion during the same period.

Phased Implementation

The schedule for implementing this measure is designed to be phased over four years.

Initially, in the first year, the benefit will cover the children of employees protected under the Labor Code, including those working in small businesses with fewer than 20 employees—a group that has so far been excluded from this right.

In the second year, the coverage will extend to include the children of self-employed women and domestic workers. The third year will broaden the protection to involve the children of working fathers, in cases where the mother, despite being unemployed, is actively seeking work or pursuing studies. Finally, in the fourth year, the implementation will complete by including the children of working parents whose mothers are not engaged in any employment, academic, or job-seeking activities, as well as parents working in the public sector.

Flexible Model for Businesses

According to the initiative, there will be flexibility for businesses, as if a childcare facility is not available in the area, the employer will not be required to build or provide one.

Moreover, they will not be obligated to make an extra co-payment for workers to access the benefit.

The government estimates that during the first year, just over 15,000 children will benefit from the initiative, a figure expected to gradually increase to over 67,000 beneficiaries by the fourth year of implementation.

The project also includes the establishment of a Technical Commission on Financing and Sustainability to continuously assess the system’s viability and mechanisms for oversight and control led by the Superintendence of Pensions. For projection purposes, Dipres based its calculations on an average monthly contribution of 5.2 UTM per beneficiary child (approximately $371,831), although the final amount will be determined later by the technical commission.

According to La Moneda, the total fiscal cost of the initiative will reach $11,044 million during the first year of implementation, and afterward will be around $6,176 million annually, as reported by Diario Financiero.

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