Uruguay pays social security Benefits to people who meet the applicable eligibility standards, including minimum length-of-work and other requirements. Under Article 8, Uruguay will add a person's U.S. coverage to his or her periods of Uruguayan coverage, if necessary, to meet eligibility rules. If the person meets the requirements based on combined U.S. and Uruguayan credits, Uruguay will pay a Benefit in accordance with its Laws (see Article 2.1(b)) on national old-age, disability, and survivors Benefits.
URUGUAYAN SOCIAL SECURITY BENEFITS
GENERAL
The Uruguayan social security system is a three-pillar structure. The first pillar consists of a non-contributory, means-tested social assistance payment for low-income workers, financed through general government revenues. The first pillar is a flat rate, means tested benefit that is adjusted downward as a person's retirement income increases. First pillar Benefits are not included under the scope of this Agreement. The second pillar is a traditional defined benefit system that provides Benefits on the basis of old-age, disability, and death via pay-as-you-go financing. The third pillar is a mandatory, fully funded system invested in individual pension funds (mandatory for all wage earners and self-employed persons in Uruguay who earn more than a statutorily defined threshold). Third pillar benefit amounts vary somewhat according to the performance of the fund in which the employee elects to invest. Article 8.3 of this Agreement permits a person to receive such a Benefit under the third pillar if he or she qualifies for such Benefit.
This Article applies to the second pillar system, which is a work based program that covers all economically active people in Uruguay. Uruguay pays Benefits under the second pillar in amounts that it bases on the worker's average earnings, number of years of contributions, and age of retirement.
OLD-AGE BENEFITS
Retirement age in Uruguay is age 60. The Uruguayan system requires a minimum of 30 years of covered work in Uruguay for entitlement to an old-age Benefit. Certain activities modify this 30 year requirement, including child care (a mother receives 1 year of credit for each child or adopted child in her care, with a maximum of 5) and teaching (teachers are credited with 4 years for each 3 years of services performed). Additional rules apply for more favorable retirement conditions for pilots, miners, and people who work in strenuous conditions. A person may elect to defer receipt of his or her Benefit until age 70, at which point he or she will be eligible for a higher Benefit amount.
DISABILITY BENEFITS
Uruguay pays two types of disability Benefits - total disability Benefits and a temporary allowance for partial disability.
In order to receive a total disability Benefit, a person aged 26 or older must have performed at least 2 years of covered work, at least 6 months of which must have occurred in the period immediately preceding the disability onset. The worker must further be completely incapable of any type of work, and cannot be in receipt of a retirement Benefit. If the worker first became disabled under the age of 26, the 2-year minimum contribution period is waived, but the 6-month requirement remains, along with all the other requirements. Further, if a worker's disability onset was directly linked to his or her work activity, both coverage requirements are waived.
The requirements for receipt of the temporary allowance for partial disability are somewhat less stringent. Like the total disability Benefit, a person aged 26 or older must have performed at least 2 years of covered work, at least 6 months of which must have occurred in the period immediately preceding the disability onset, and also cannot be entitled to a retirement Benefit. However, the worker must only be incapable of performing the same work that he or she was performing at the time the disability occurred. The same coverage exemptions for workers under age 26 and workers whose disability is directly connected to his or her work activity apply to this allowance as apply to the total disability Benefit. This allowance is only payable for a maximum period of 3 years.
SURVIVORS' BENEFITS
Under the Uruguayan system, survivors' Benefits are available to widow(er)s, unmarried children under age 21, children of the worker who were disabled prior to age 21, divorced spouses entitled to alimony at the time of the worker's death, registered partners in a consensual union, and disabled parents of the worker who were dependent on the worker at the time of his or her death. In order for any survivors to be eligible for a Benefit, the deceased must have been working, receiving, or eligible to receive an old-age or disability Benefit or sickness, maternity, work injury, or unemployment benefits (or have died within the 12-month period after unemployment benefits terminated). While Benefits for most children terminate upon attainment of 21 years of age, children who were disabled prior to age 21 can continue to receive Benefits so long as they remain unmarried and disabled. Benefits terminate upon the marriage of any entitled surviving spouse or child.
Survivors' Benefit amounts are based on the amount of the Benefit the worker was receiving, or would have been entitled to, at the time of his or her death. Category I survivors include widows and children, who are entitled to receive 75% of this amount. Category II beneficiaries, including widowers, registered partners, and divorced spouses, are entitled to receive 66% of this amount. Disabled parents of the worker are entitled to receive 50% of this amount.
If there is only one Category I survivor entitled on the worker's record, his or her share is 75%. However, if there is more than one Category I survivor entitled to a Benefit, all survivors split 70% equally, except those with children in care, who get a 14% increase. If there is only one Category II survivor beneficiary, his or her share is 66%. However, if there is more than one Category II survivor entitled to a Benefit, all survivors split 60% equally. In all other cases, the Benefit is split equally among other eligible survivors.
COST-OF-LIVING ADJUSTMENTS
Uruguay provides cost of living adjustments on an annual basis. Benefits increase according to increases in the average wage index for the prior year. This adjustment generally occurs at the beginning of the year, when the prior year's average wage statistics are published.