Integrated Form for Contribution Settlement PILA

32 Colombia – Best practice in independent workers coverage The enactment of Law n. º 100, of 1993, and subsequently of Law n. º 797, of 2003, determined the framework guidelines for the social security system and its different subsystems. However, many such guidelines were not practicable, and the laws were rigid. In subsequent years, a number of decrees from the Colombian authorities have led to a series of regulatory changes which have significantly favoured independent workers. Firstly, it was found that the laws according to which independent workers declared their Basic Contribution Income IBC only allowed them to make such a declaration in January, preventing them from making any changes throughout the year. This rule was made flexible in order to take into account the productive cycles and variations the economic activity over the course of the year. This enables such workers to make changes to their IBC, and declare it at PILA, according to their individual economic situation. The greatest benefit of this measure lies in the fact that it allows independent workers to adjust their income. Due to the structural characteristics of their economic activity, they are prone to experience difficult economic situations which may result in the reduction of their income, and consequently of their contributory capacity. In this vein, we should also highlight another element of the social security registration law which benefits independent workers. The News Report, an information note which may be drafted by independent workers as well as by employers allows workers to describe any circumstances partially or permanently affecting the amount to be cancelled at the EPS. With this tool, independent workers have been given an important legal tool which allows them to conform to the law while taking into account any fluctuations which may occur in their economic activity, and which may affect the status of their registration in social security. Another noted change introduced in Colombian laws is the possibility given to independent workers to contribute to the health scheme with no mandatory requirement to contribute simultaneously to the pensions‘ scheme, according to their financial situation. This measure was adopted with the purpose of providing individuals lacking contributory capacity to make payments to both subsystems which are mandatory, as previously mentioned with the possibility of choosing at least the benefits of the health subsystem. In conclusion, it is remarkable that in recent years there has been a marked effort to implement legal changes, and that an extensive effort has been made to maintain and extend the contributory coverage of independent workers in the Colombian social security system. It is expected that such changes are reflected in future indicators for this area, and that they may enable significant improvement in the coverage of independent workers. Innovations in extending social insurance coverage to independent workers 33

7. Costa Rica

– Best practice in adapting social insurance to independent workers It is widely acknowledged that job insecurity, income irregularity, a high heterogeneity among groups, a low organization level, a low or null contributory capacity, competitive vulnerability, the permanent struggle for company survival, and mistrust regarding social security institutions are structural features of integrating independent workers into the labour market. Although being external to social security, such features historically hinder the registration of many of these workers in Latin Americas social security schemes. Nevertheless, there is a consensus in the region regarding the fact that the high percentage of independent work which is currently excluded from social security could be significantly lower should the administrative and programmatic configurations, internally established by social security institutions, be better adapted to the needs and characteristics of independent workers, and not respond only to the peculiarities of the modern urban sectors employed workers, which in Latin America are a decreasing minority of the workforce in relative terms. Given that within the Latin-American context Costa Rica has enjoyed relative success in increasing social security coverage levels for the self-employed population, the below described experience of the Costa Rican Social Insurance Fund, in spite of the challenges it still faces, provides a clear example that, with effort and an innovative spirit, a social security institution make significant progress in what is admittedly a complex procedure of adaptation and inclusion of the groups most in need of social protection. In the path to building socially inclusive societies, which are more cohesive and prosperous, we expect that the experience shared herein may be capitalized upon by other countries as a method to gauge appropriate solutions to respond to the challenge of integrating the large majorities excluded from social security institutions.

7.1. Genesis of best practices of independent workers social protection

In Costa Rica, independent work is the second most important way of entering the labour market. For every ten active workers, around three work independently 1 . According to the national survey made of family households in the year 2009, the population linked to this type of work reached 371,000 people, of which 70.4 per cent 267,000 people were covered by health social insurance, and enjoyed the same protection scheme applicable to employed workers. As described below, the lessons of the Costa Rican experience related to this significant level of coverage of independent workers are drawn from a study of the revision of the social security model designed between the 1940s and 2010. The stated intention of ensuring social protection to independent workers goes back to 1941, when the Costa Rican Social Insurance Fund CCSS was created under Law n. º 17, 1 This proportion has been relatively stable over the past three decades, a period in which the economy underwent a profound structural transformation, which was marked by the transition from a model based on agro exports and on focusing on few products, to a diversified model directed to the industry, tourist services, and trade, together with a growing participation of women in all professional categories.