Characterization of the Colombian Social Security System

28 Colombia – Best practice in independent workers coverage

6.3. Social security coverage of independent workers

The registration of independent workers in the social security system has elements in common with the registration of employed workers, such as the requirement for mandatory health and pensions schemes, and the specific contents of the benefit package, among others. However, it also shows some peculiarities. Table 6 describes the characteristics of the contributory scheme for independent workers in the three main social security systems. Table 7. Colombia: Registration characteristics by contributory scheme, independent workers Subsystem Registration Basic Contribution Income RBCa Contribution rate Health Mandatory Calculated on the basis of declared income and no lower than one national minimum salary b. 12.5 Pensions Mandatory 16.0 Professional hazards Voluntary Calculated on the basis of declared income and no lower than two national minimum salaries. The rate varies depending on the economic activity, on a disabling injuries index, on accidents, and on the occupational health programme. Source: Drawn up by the author on the basis of current laws. Note: a The RBC must be declared in advance, in order to settle contributions in February each year. b Health promoters take reference from a presumed income as a minimum basis calculated according to the level of education, working experience, economic activity, area, and declared assets. Should income supersede such presumed income, contributions are based on the real income. Regarding the levels of coverage of independent workers and their characteristics, it is important to review the conclusions presented by Farné et al. 2008 in their study on independent workers and social insurance in Colombia in 2007. Among the main observations as regards the structure of independent work and its relation to social insurance, it was found that, in the period under review, around 80 per cent of own-account workers were registered in the health system, whereas in the employers group this percentage rose to 85.6 per cent. Regarding pensions, the former represented 6.4 per cent of total registrants and the latter 16.4 per cent. Registration in the professional hazards system was lower in both cases, at only 4.6 per cent for own-account workers, and 14.5 per cent for employers. Obviously, independent workers social coverage indicators are relatively optimistic. However, it is important to mention that many people who declared to be registered in the social security system are in fact registered in the subsidized scheme, as beneficiaries ―contributors insured relatives‖ 2 . 2 Those registered as beneficiaries include those who in spite of not making any contribution, are nevertheless covered by the General System of Social Security in Health as members of a family household, and due to their kinship to andor economic dependence on a registered contributor.