The purpose of Bill S-1123-2020 is to promote and enhance the use of unpaid work time carried out in households. The Bill proposes the creation of a special category called “Category AA” in the Simplified Regime for Small Taxpayers, exclusively for individuals who perform household chores and only covers the contribution to Social Security and Health Insurance Plan.
The registration of individuals in the regime may generate budgetary impacts in several aspects:
For every 100,000 individuals registered in the new category, the monthly revenue for social security purposes would be ARS101 million, and ARS141 million in contributions for health insurance plan. The latter would be paid to the Social Security/Union-run health insurance chosen by the registered persons, and therefore would not increase the public coffers.
If there are individuals who are currently eligible and contributing to category A of the Simplified Regime for Small Taxpayers and wish to change to the new AA provided for in the Bill, ARS23 million would be lost per month for every 100,000 individuals.
Finally, if the provisions of the Bill are analyzed as a closed pay-as-you-go pension system, 29 active category AA contributors would be needed for each one who retires to guarantee the internal sustainability of the proposed regime.