Mexico

Old Age, Disability, and Survivors

Regulatory Framework

First law: 1943 (social insurance).

Current laws: 1973 (social insurance); 1995 (individual account), implemented in 1997; and 2004 (social development).

Type of program: Mandatory individual account, social insurance, and social assistance system.

Coverage

Mandatory individual account: Private-sector employees and members of cooperatives.

At retirement or in case of disability, private-sector employees covered by the social insurance system before July 1, 1997, can choose to receive benefits from either the social insurance system or the mandatory individual account system.

Special system for certain public-sector employees entering the labor force on or after April 1, 2007.

Voluntary coverage for self-employed persons, household workers, employers, tenant and community farmers, small landowners, and public-sector employees who are not covered under any other scheme.

Special social insurance systems for petroleum workers, certain public-sector employees, and military personnel.

Social assistance: Legal residents of Mexico.

Source of Funds

Note: The government receives the account balances and pays benefits for workers who opt for social insurance benefits at retirement or in case of disability.

Insured person

Mandatory individual account and social insurance: 1.125% of covered earnings (old age) plus 0.625% (disability and survivors).

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 71.10 pesos.

The insured person's contributions also finance the marriage grant under Family Allowances.

Social assistance: None.

Self-employed person

Mandatory individual account and social insurance: 6.275% of the legal daily minimum wage (old age) plus 2.375% (disability and survivors).

The legal daily minimum wage is 71.10 pesos.

The self-employed person's contributions also finance the marriage grant under Family Allowances.

Social assistance: None.

Employer

Mandatory individual account and social insurance: 5.15% of covered payroll (old age) plus 1.75% (disability and survivors).

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 71.10 pesos.

The employer's contributions also finance the marriage grant under Family Allowances.

Social assistance: None.

Government

Mandatory individual account and social insurance: 0.225% of covered earnings plus an average flat-rate amount of 4.21 pesos (2013) to the individual account for each day insured persons with earnings up to 15 times the legal monthly minimum wage contribute (old age); 0.125% of covered earnings (disability and survivors); the total cost of the guaranteed minimum pension.

Social assistance: The total cost.

Qualifying Conditions

Old-age pension

Old-age pension (mandatory individual account): Age 65 with at least 1,250 weeks of contributions; with less than 1,250 weeks of contributions, the insured may continue contributing or receive a lump-sum benefit.

Early pension (mandatory individual account): At any age if the individual account balance is sufficient to provide a pension of at least 30% of the minimum pension set by law and any survivor pensions.

Unemployed worker's old-age pension (mandatory individual account): Age 60 with at least 1,250 weeks of contributions and unable to find suitable paid employment; with less than 1,250 weeks of contributions, the insured may receive a lump-sum benefit.

Guaranteed minimum pension (mandatory individual account): Aged 60 to 65 with at least 1,250 weeks of contributions, and the individual account balance is insufficient to finance the minimum pension set by law.

Dependent's supplement: Paid in addition to the old-age pension (mandatory individual account) and unemployed workers' old-age pension (mandatory individual account) for a spouse or partner, each child up to age 16 (age 25 if a student, no limit if disabled), or dependent parents (if the pensioner has no spouse, partner, or child).

The minimum monthly pension is 2,253.76 pesos.

Old-age pension (social insurance): Age 65 with at least 500 weeks of contributions. Employment must cease.

Unemployed worker's old-age pension (social insurance): Age 60 with at least 500 weeks of contributions and unable to find suitable paid employment.

Dependent's supplement: Paid in addition to the old-age pension (social insurance) and unemployed workers' old-age pension (social insurance) for a spouse or partner, each child up to age 16 (age 25 if a student, no limit if disabled), or dependent parents (if the pensioner has no spouse, partner, or child).

Constant attendance allowance (social insurance): The insured requires the constant attendance of others to perform daily functions.

Pensión para Adultos Mayores (social assistance): Age 65 and not receiving an old-age or disability pension (mandatory individual account or social insurance) or a Prospera cash grant (see Family Allowances).

Disability pension

Disability pension (mandatory individual account): Must be assessed with a loss of at least 75% of normal earning capacity and have at least 150 weeks of contributions; at least 250 weeks with an assessed loss of 50% to 74%.

Guaranteed minimum pension (mandatory individual account): Meets the contribution requirements for a disability pension, but the individual account balance is insufficient to finance the minimum pension set by law.

The minimum monthly pension is 2,253.76 pesos.

Dependent's supplement: Paid in addition to the disability pension (mandatory individual account) for a spouse or partner, each child up to age 16 (age 25 if a student, no limit if disabled), or dependent parents (if the pensioner has no spouse, partner, or child).

Constant attendance allowance (mandatory individual account): The insured requires the constant attendance of others to perform daily functions.

Disability pension (social insurance): Must be assessed with a 50% reduction in normal earning capacity with at least 150 weeks of contributions. The insured may continue to work in a different job and with a different employer after a six-month waiting period.

Dependent's supplement: Paid in addition to the disability pension (social insurance) for a spouse or partner, each child up to age 16 (age 25 if a student, no limit if disabled), or dependent parents (if the pensioner has no spouse, partner, or child).

Constant attendance allowance (social insurance): The insured requires the constant attendance of others to perform daily functions.

Mexican Social Security Institute assesses the level of reduced earning capacity.

Survivor pension

Survivor pension: The deceased received or was entitled to receive an old-age or disability pension or had at least 150 weeks of contributions at the time of death. The death must not be the result of an occupational injury.

Eligible survivors include a widow(er) or cohabiting partner with children; a widow(er) without children who was married to the deceased for at least six months if the deceased was younger than age 55 at the time of marriage; at least 12 months if the deceased was aged 55 or older at the time of marriage or if the deceased received or was entitled to receive an old-age or disability pension. Other eligible survivors include a cohabiting partner without children who lived with the deceased for at least five years; children up to age 16 (age 25 if a student; no limit if disabled); and parents if there are no other eligible survivors. All eligible survivors must have been dependent on the deceased.

Funeral grant: The deceased had at least 12 weeks of contributions in the last nine months or received or was entitled to receive an old-age or disability pension at the time of death.

Survivor settlement (social assistance): Paid to a beneficiary named by the deceased.

Old-Age Benefits

Old-age pension (mandatory individual account): The insured has two different options: make programmed withdrawals or purchase an annuity.

Early pension: The insured has two different options: make programmed withdrawals or purchase an annuity.

Unemployed worker's old-age pension (mandatory individual account): Calculated in the same way as the old-age pension (mandatory individual account).

Guaranteed minimum pension: The difference between the individual account balance and the minimum pension set by law is paid.

The minimum monthly pension is 2,253.76 pesos.

Dependent's supplement: 15% of the insured's pension is paid for a wife or partner; 10% for each child younger than age 16 (age 25 if a student, no limit if disabled); and 10% for each dependent parent.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of the pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Old-age pension (social insurance): A variable percentage (inversely proportional to earnings) of the insured's average earnings used to calculate the last 250 weeks of contributions is paid plus an increment for each year of contributions exceeding 500 weeks.

Constant attendance allowance (social insurance): 15% of the insured's old-age pension is paid.

Unemployed worker's pension (social insurance): Calculated in the same way as the old-age pension (social insurance).

The minimum monthly pension is 2,253.76 pesos.

Dependent's supplement: 15% of the insured's pension is paid for a wife or partner; 10% for each child younger than age 16 (age 25 if a student, no limit if disabled); and 10% for each dependent parent.

Christmas bonus: A month of the pension without supplements is paid.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of the pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Pensión para Adultos Mayores (social assistance): 1,160 pesos is paid every two months.

Permanent Disability Benefits

Disability pension (mandatory individual account): 35% of the insured's average adjusted earnings used to calculate the last 500 weeks of contributions is paid.

Constant attendance allowance: Up to 20% of the insured's disability pension is paid.

Dependent's supplement: 15% of the insured's pension is paid for a wife or partner; 10% for each child younger than age 16 (age 25 if a student, no limit if disabled); and 10% for each dependent parent.

Guaranteed minimum pension: The difference between the monthly disability pension the insured was entitled to receive and the minimum pension set by law is paid.

The minimum monthly pension 2,253.76 pesos.

Christmas bonus: A month of the pension without supplements is paid.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of the pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

If the insured is eligible for a disability pension and the individual account balance is greater than the minimum pension, the insured may withdraw the sum exceeding the amount needed for the minimum pension, purchase an annuity, or apply the excess amount to survivor benefits.

Disability pension (social insurance): A variable percentage (inversely proportional to earnings) of the insured's average earnings used to calculate the last 250 weeks of contributions is paid plus an increment for each year of contributions exceeding 500 weeks.

Dependent's supplement: 15% of the insured's pension is paid for a wife or partner; 10% for each child younger than age 16 (age 25 if a student, no limit if disabled); and 10% for each dependent parent.

The minimum monthly pension is 1,969.78 pesos.

Constant attendance allowance: Up to 20% of the insured's disability pension is paid.

Christmas bonus: A month of the pension without supplements is paid.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of the pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Survivor Benefits

Spouse's pension: 90% of the old-age or disability pension the deceased received or was entitled to receive is paid.

The spouse's pension ceases if the widow(er) or partner remarries or cohabits with a new partner, and a lump sum is paid.

Remarriage settlement: A lump sum of three years of the pension is paid.

Constant attendance allowance: Up to 20% of the pension may be paid to a widow(er) or a partner.

Orphan's pension: 20% of the old-age or disability pension the deceased received or was entitled to receive is paid for each orphan younger than age 16 (age 25 if a student, no limit if disabled); 30% for a full orphan. When eligibility ceases, a final benefit of three months of the deceased's pension is paid to orphans.

Other eligible survivors: If there is no widow(er), partner, or child, 20% of the old-age or disability pension the deceased received or was entitled to receive is paid for each eligible survivor.

All survivor benefits combined must not exceed 100% of the disability pension the deceased received or was entitled to receive.

The amount paid may be recalculated if the number of eligible survivors changes.

Funeral grant: A lump sum of twice the legal monthly minimum wage is paid.

The legal daily minimum wage is 71.10 pesos.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of the pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Pensión para Adultos Mayores Survivor's grant (social assistance): A lump sum of 1,160 pesos is paid.

Administrative Organization

Mexican Social Security Institute (http://www.imss.gob.mx), managed by a general assembly, technical council, oversight commission, and director general, oversees the mandatory individual account scheme.

National Commission for the Retirement Savings System (http://www.consar.gob.mx) supervises the pension fund management companies.

Individual pension fund management companies administer the individual accounts.

Mexican Social Security Institute (http://www.imss.gob.mx), managed by a general assembly, technical council, oversight commission, and director general, administers the social insurance scheme through regional and local boards.

Secretariat for Social Development (http://www.sedesol.gob.mx) administers the Pensión para Adultos Mayores program.

Sickness and Maternity

Regulatory Framework

First law: 1943 (social insurance).

Current laws: 1995 (social insurance), implemented in 1997; 2004 (social development); and 2006 (social development).

Type of program: Social insurance and social assistance system.

Coverage

Cash and medical benefits (social insurance): Private-sector employees and members of cooperatives.

Voluntary coverage for public-sector employees who are not covered under other schemes, self-employed persons, household workers, employers, tenant and community farmers, and small landowners.

Medical benefits (social assistance): Needy residents of Mexico.

Source of Funds

Insured person

Cash benefits (social insurance): 0.25% of covered monthly earnings.

Medical benefits (social insurance): 0.40% of the difference between covered earnings and three times the legal monthly minimum wage plus 0.375% of covered monthly earnings (pensioners' medical benefits).

Voluntary contributors pay 20.40% of the legal monthly minimum wage (of covered earnings for public-sector and household workers).

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

Medical benefits (social assistance): None.

Self-employed person

Cash benefits (social insurance): 1.425% of the legal monthly minimum wage (pensioners' cash benefits).

Medical benefits (social insurance): 20.40% of the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

Medical benefits (social assistance): None.

Employer

Cash benefits (social insurance): 0.70% of covered monthly payroll, plus 1.425% of the legal monthly minimum wage (pensioners' cash benefits).

Medical benefits (social insurance): 20.40% of the legal monthly minimum wage per employee, plus 1.1% of covered earnings greater than three times the legal monthly minimum wage.

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

Medical benefits (social assistance): None.

Government

Cash benefits (social insurance): 0.05% of covered monthly earnings plus 0.075% of covered monthly earnings (pensioners' cash benefits).

Medical benefits (social insurance): A flat rate of 9.30 pesos a month per covered day per insured person.

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

Medical benefits (social assistance): The total cost.

Qualifying Conditions

Cash sickness benefits (social insurance): Must have at least four weeks of contributions immediately before the incapacity began; for casual workers, at least six weeks of contributions in the last four months.

Coverage for medical benefits only is extended for up to eight weeks after covered employment ceases if the insured had at least eight continuous weeks of contributions before the leave period began.

Cash maternity benefits (social insurance): Must have at least 30 weeks of contributions in the 12 months before the benefit is first paid; the Social Security Institute must confirm the expected date of childbirth; and the insured must not work for 42 days before and 42 days after childbirth.

Medical benefits (social insurance): Must be currently insured, a pensioner, or an eligible dependent.

Medical benefits (social assistance): Must live in a household with income below a legally defined threshold or in geographic areas covered by the Prospera program and with women of reproductive age or with children up to age 22. Families must register at designated health centers and attend scheduled health visits and community health education activities.

Sickness and Maternity Benefits

Sickness benefit (social insurance): 60% of the insured's covered monthly earnings when the incapacity began is paid after a three-day waiting period for up to 52 weeks; may be extended in some cases to 78 weeks.

Maternity benefit (social insurance): 100% of the insured's covered monthly earnings is paid for 42 days before and 42 days after the expected date of childbirth.

Nursing allowance: In-kind assistance is provided for up to six months after childbirth. A layette is also provided.

Workers' Medical Benefits

Medical benefits (social insurance): The health facilities of the Social Security Institute (IMSS) normally provide medical services directly to patients; IMSS reimburses the cost of services when it cannot provide them directly. Benefits include general, maternity, dental, and specialist care; surgery; hospitalization or care in a convalescent home; medicine; laboratory services; and dental care. Benefits are paid for 52 weeks; may be extended for an additional 52 weeks.

Medical benefits (social assistance): The IMSS-Prospera program provides medical services to needy persons without access to other social security services, especially in rural and underserved urban areas. Benefits are provided through rural hospitals and medical units and include reproductive health, gynecology, and chronic disease care; medical services for infants and youths; nutritional support and vaccinations.

Dependents' Medical Benefits

Medical benefits for dependents (social insurance): Medical benefits for dependents are the same as those for the insured.

Eligible dependents include a wife, a dependent husband, a cohabiting partner who has lived with the insured for the five years immediately before the illness began or who has children with the insured (as long as both partners are unmarried), children younger than age 16 (age 25 if a student, no limit if disabled or chronically ill and unable to work), and dependent parents.

Medical benefits for dependents (social assistance): Medical benefits for dependents are the same as those for the insured.

Administrative Organization

Mexican Social Security Institute (http://www.imss.gob.mx/), managed by a general assembly, technical council, oversight commission, and director general, administers the program through regional and local boards.

Mexican Social Security Institute operates its own hospitals, clinics, pharmacies, and other medical facilities and also contracts for the use of some facilities.

Secretariat of Social Development (http://sedesol.gob.mx/), through its office for the National Coordination of the Prospera Program, coordinates the administration of the IMSS-Prospera program.

Work Injury

Regulatory Framework

First law: 1943.

Current law: 1995 (social insurance), implemented in 1997.

Type of program: Social insurance system.

Coverage

Private-sector employees, members of cooperatives, and certain members of the federal executive.

Voluntary coverage for public-sector employees who are not covered under other schemes, self-employed persons, household workers (social insurance medical benefits only), and employers.

Source of Funds

Insured person: None.

Self-employed person: None.

Employer: 0.5% to 15% of payroll, according to the assessed degree of risk.

The minimum earnings used to calculate contributions are the legal monthly minimum wage in the insured's geographic area.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage in Mexico City.

The legal daily minimum wage in Mexico City is 70.10 pesos.

Government: None.

Qualifying Conditions

Work injury benefits: There is no minimum qualifying period. Accidents that occur while commuting to and from work are covered.

Temporary Disability Benefits

100% of the insured's average monthly earnings in the last 52 weeks (or over the whole contribution period, if shorter) is paid from the first day of the disability until certification of permanent disability (which should take place within 52 weeks).

Permanent Disability Benefits

Permanent disability pension: For a total (100%) disability, 70% of the insured's earnings before the disability began is paid.

Partial disability: For an assessed degree of disability of more than 50%, a percentage of the full pension is paid according to the assessed degree of disability. For an assessed degree of 26% to 50%, a percentage of the full pension is paid according to the assessed degree of disability or a lump sum of five years of the insured's pension is paid. For an assessed degree of 25% or less, a lump sum of five years of the insured's pension is paid.

Christmas bonus: A supplement of 15 days of the insured's pension is paid for an assessed degree of disability of more than 50%.

The degree of disability may be assessed and revised during the first two years; thereafter, a permanent pension is paid according to the assessed the degree of disability.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Workers' Medical Benefits

Benefits include preventive, general, surgical, and hospital care; medicine; rehabilitation; transportation; appliances; and orthopedics.

Survivor Benefits

Survivor pension: 40% of the permanent disability pension the deceased received or was entitled to receive is paid to a widow(er) or surviving partner.

The pension ceases if the widow(er) or partner remarries or cohabits with a new partner, and a lump sum is paid.

Remarriage settlement: A lump sum of three years of the pension is paid.

Orphan's pension: 20% of the permanent disability pension the deceased received or was entitled to receive is paid for each orphan younger than age 16 (age 25 if a student, no limit if disabled); 30% for a full orphan. When eligibility ceases, a final lump-sum benefit of three months of the permanent disability pension the deceased received or was entitled to receive is paid to orphans.

Other eligible survivors: If there is no widow(er) or orphan, 20% of the permanent disability pension the deceased received or was entitled to receive is paid to each eligible parent.

The amount paid may be recalculated if the number of eligible survivors changes.

Christmas bonus: A supplement of 15 days of the pension is paid.

Funeral grant: A lump sum of twice the legal monthly minimum wage is paid.

The legal daily minimum wage is 70.10 pesos.

Benefits are payable abroad according to reciprocal agreements. The insured must pay the corresponding administrative costs. If leaving Mexico permanently, the pensioner may request a lump sum of two years of pension.

Benefit adjustment: Benefits are adjusted annually in February according to changes in the price index.

Administrative Organization

Mexican Social Security Institute (http://www.imss.gob.mx), managed by a general assembly, technical council, oversight commission, and director general, administers the program through regional and local boards.

Unemployment

Regulatory Framework

Labor law requires employers to pay dismissed employees a lump sum of three months plus 20 days of pay for each year of service, up to 12 months.

Unemployed persons with at least five years of contributions to an individual account may withdraw an amount equal to 90 days of their average earnings used to calculate the last 250 weeks of contributions or 11% of the individual account balance (see Old Age, Disability, and Survivors), whichever is lower.

Unemployed persons with three to five years of contributions and at least 12 bimonthly contributions may withdraw an amount equal to 30 days of their covered earnings used to calculate contributions, up to 10 times the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

One withdrawal is permitted every five years.

After the insured returns to work, he or she may replace the amount withdrawn from the individual account during unemployment and the number of paid contribution weeks will be restored. If the amount is not replaced, the number of paid contribution weeks will be reduced.

Family Allowances

Regulatory Framework

First law: 1973.

Current laws: 1995 (social security), implemented in 1997; 2004 (social developments); and 2006 (social development).

Type of program: Social insurance, mandatory individual account, and social assistance system.

Coverage

Day care center (social insurance): Insured mothers who are employed, widowers or divorced fathers who have not remarried and who have legal custody of children, and legal guardians.

Exclusions: Self-employed persons.

Marriage grant (mandatory individual account): Individual account holders (see Old Age, Disability, and Survivors).

Prospera cash grant (social assistance): Needy residents of Mexico.

Source of Funds

Insured person

Social insurance: None.

Mandatory individual account: See source of funds under Old Age, Disability, and Survivors.

Social assistance: None.

Self-employed person

Social insurance: Not applicable.

Mandatory individual account: See source of funds under Old Age, Disability, and Survivors.

Social assistance: None.

Employer

Social insurance: 1% of covered payroll.

The minimum earnings used to calculate contributions are the legal monthly minimum wage.

The maximum earnings used to calculate contributions are 25 times the legal monthly minimum wage.

The legal daily minimum wage is 70.10 pesos.

Mandatory individual account: See source of funds under Old Age, Disability, and Survivors.

Social assistance: None.

Government

Social insurance: None.

Mandatory individual account: None.

Social assistance: The total cost.

Qualifying Conditions

Day care center (social insurance): The mother, widow(er), divorced father or guardian of the child is in covered employment.

Marriage grant (mandatory individual account): Not previously married and has at least 150 weeks of contributions to the individual account.

Prospera cash grant (social assistance): Paid to households with income below a legally defined threshold or in geographical areas covered by the program and with women of reproductive age or with children up to age 22. Children must be enrolled in and regularly attend school. Families must register at designated health centers and attend scheduled health visits and community health education activities.

Family Allowance Benefits

Day care center (social insurance): Child day care facilities are provided for children aged 43 days to 4 years.

Marriage grant (mandatory individual account): A lump sum of 30 days of the legal daily minimum wage is financed by the individual account.

The legal daily minimum wage is 70.10 pesos.

Prospera cash grant (social assistance): The amount varies according to the composition of the household (number of children younger than age 9, number and grade of school-aged children, and number of older persons).

Administrative Organization

Mexican Social Security Institute (http://www.imss.gob.mx/), managed by a general assembly, technical council, oversight commission, and director general, administers the day care program through contracted day care providers.

Mexican Social Security Institute (http://www.imss.gob.mx), managed by a general assembly, technical council, oversight commission, and director general, oversees the mandatory individual account scheme.

National Commission for the Retirement Savings System (http://www.consar.gob.mx) supervises the pension fund management companies.

Individual pension fund management companies administer the individual accounts.

Secretariat of Social Development (http://sedesol.gob.mx/), through its office for the National Coordination of the Prospera Program, coordinates the administration of the Prospera cash grant.