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Original article: El “fraude social” que no apareció: Quiroz pidió recortar la PGU sin evidencia concreta, revela CIPER

The Unsubstantiated «Social Fraud»: Quiroz’s Request to Cut Universal Guaranteed Pension Without Evidence, Reveals CIPER

The Minister of Finance, Jorge Quiroz, submitted a written request on April 21 for a 15% reduction in the budget for the Universal Guaranteed Pension (PGU). This proposal, reviewed by the CIPER, lacked any technical justification and was based on claims of «social fraud» that no public entity has been able to substantiate.

This request, which could result in a fiscal saving of at least $800 million annually, directly threatened the income of 2.2 million beneficiaries since there is no legal or practical means to implement such a cut without affecting the amounts received by elderly individuals.

Indeed, former Pension Superintendent Álvaro Gallegos warned the investigative outlet that «if the cut were to be implemented, it is impossible not to harm the current rights of elderly individuals«, calling the measure an unprecedented blow to households since the era of Hernán Büchi in 1985.

Quiroz’s proposal, which was part of a broader directive to «discontinue» 142 programs and reduce another 260, was initially based on two arguments that collapsed when confronted with actual figures. The first appealed to the notion of «spending efficiency» and to trimming the «bureaucratic fat» from the system; however, the 2024 budget reports from the Budget Directorate (Dipres) show that the total administrative cost of the PGU is less than 1% of its budget.

This minuscule proportion means that, even if all spending on personnel and services of the Social Security Institute (IPS) were entirely eliminated—which is impractical—the requested cut would still leave a 14.9% unfinanced gap, necessitating a reduction in direct payments to the 2.2 million pensioners currently receiving benefits.

No Complaints or Evidence of «Social Fraud» Exist

The second pillar of the secretary of state’s justification was the prevention of «social fraud» or «wasteful spending», a suspicion that Quiroz delved into during a TV interview by questioning how the residency of foreigners applying for the PGU is verified.

However, when consulted by CIPER, all oversight entities dismissed the existence of any concrete evidence on this matter.

The IPS responded that «no reports of this kind have been received» regarding improperly awarded pensions, while the Superintendence of Pensions merely noted that it only oversees the concession processes. The pension entity itself detailed that each application is cross-referenced with databases from the SII, the PDI, the AFPs, and the Social Household Registry, a verification mechanism that makes the likelihood of significant fraud highly improbable, as confirmed by former superintendent Gallegos, who stated, «there is no evidence of any potential fraud«, emphasizing that «it is highly improbable for any fraud to exist«.

In this context of lacking evidence, Minister Quiroz’s request not only lacked supporting technical reports. When queried by CIPER, the Ministry of Finance indicated that the instructions signed by Quiroz «correspond to the initiation of the ordinary and annual budget formulation process for 2027» and that these are merely «preliminary technical evaluations regarding efficiency and efficacy,» adding that so far «no teams have been working» on how a potential reduction of the PGU would be structured.

PGU Cut Contradicts Kast’s Campaign Promises

In attempting to implement this measure, the secretary of state openly contradicted the campaign promise made by President José Antonio Kast, who repeatedly stated that he would not cut the PGU.

The political tension created by the revelation from CIPER forced the government to respond to criticisms, publicly confirming that the benefit will not be altered.

David Bravo, director of the UC Center for Surveys and Longitudinal Studies, questioned the carelessness of the proposal by stating, «the pertinent question would be on what basis it is established that there could be a possible 15% saving,» as such a modification requires a change in law approved by Congress.

With the Finance Ministry’s memo filed and without a single indication of fraud to justify the measure, the only certainty that has emerged is that the Universal Guaranteed Pension has withstood a challenge that could have left millions of elderly citizens in a situation of extreme vulnerability.

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