The State of Emergency declared in Peru in order to halt the spread of the coronavirus COVID-19 has delivered a blow to the Peruvian economy as production grinds to a halt, and workers are forced to quarantine in their homes. Both employers and workers have been affected.
In order to mitigate the impact, the Peruvian Government has passed Urgent Decree #033-2020. We have summarized the initiatives here:
- Access to CTS (Compensation for Time of Service) Funds: Workers can request to withdraw up to S./ 2,400 from their CTS account. The request can be made remotely, and the funds will be deposited into the account indicated by the worker.
- Temporary Suspension of Contributions to the Private Pension System (SPP): Employers are not required to withhold pension contributions for the month of April, which would have been collected in May.
- Disability Insurance (Seguridad de invalidez y sobrevivencia colectivo): During the suspension of contributions to the private pension fund (SPP), employers are still obliged to declare and pay disability insurance.
- Subsidy for Workers in the Private Sector: Employers can apply to receive a subsidy of 35% on gross salaries paid to workers earning S./1,500 or less under the following circumstances: a) The worker is of the fifth category (quinta categoria) b) the worker is registered in the sworn PDT 601 declaration (Declaración Jurada del PDT 601) of the electronic payroll (Planilla Electronica) corresponding to the period January 2020 and presented up to February 29, 2020, and whose employment period according to the T-Register (T-Registro) does not indicate an end prior do March 15, 2020.
Those who will not receive the subsidy: a) employers who owe the State civil reparation for cases of corruption and related crimes, b) employers who had tributary debt greater than 5 UITs up to December 31st, 2019, c) employers who are undergoing insolvency proceedings.
Thanks to RGB Avocats for providing supporting information for this article.