Unemployment insurance reached few people during 2020

For unemployment insurance, the Ecuadorian Institute of Social Security (IESS) paid USD 68.7 million for that benefit last year.

The Government assured that 570.000 people withdrew from the IESS, as a result of the loss of their formal job. That figure does not take into account re-entries, but only exits from the system.

Despite the situation triggered by the pandemic, 57.138 of these Ecuadorians accessed the benefits of the so-called unemployment insurance. That is, only one in ten was able to receive 70% of the Unified Basic Salary (SBU), or USD 280, for five months.

Until last year, this insurance was financed with 1% of the monthly contribution of each worker, but for this year the percentage was reduced to 0.5%.

For this benefit, the IESS disbursed USD 68.7 million in 2020 and the fund closed with a balance of USD 1.035 million. This means that only 6% of the available resources were distributed despite the serious crisis and the lack of liquidity of many families.

One of the main reasons for the low coverage is that many companies are in arrears with Social Security, so their workers have not been able to access for several months, although their contributions were deducted.

Another drawback occurred with the Humanitarian Law which, although it reduced the minimum time as unemployed to access the benefit from 60 to 10 days, this modification only became effective from mid-August. In addition, it was only applied to those affected by the crisis between April and July 2020.

The months in which the most applications were registered were: July with 14.232 beneficiaries, August with 10.196 and September with 6.960.

Former workers can also choose to withdraw their unemployment, which can be requested between the 61st and 106th day after losing their job.

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