The CAJA Headache – Updated
We have updated our CAJA blog to highlight current issues we believe are vital to discuss.
The CAJA Fees
Please note that the description of these fees is applicable for independent workers or voluntary contributors; it is not applicable for registered employees as a different set of rules apply to them. I only elaborate on the subject for independent workers or voluntary contributions as a significant number of foreigners are registered with CAJA under either of these two categories.
The Purpose of CAJA.
First and foremost, lets understand CAJA. CAJA or CCSS stands for Costa Rican Social Security Fund. Its goal is to create and administrate a fund to pay for medical services for people living in Costa Rica. It also serves as a retirement fund for people to receive a pension upon completion of a number of requirements, such as age and number of years contributing to the system. There are some exceptions for disability and extremely poor people, but for the most part, the system is designed to be financed by worker/employer contributions. Everybody has to contribute to the system, otherwise it will not work. By everybody, the law meant the workers, the employers and the government. Now that there is a significant number of foreigners living in Costa Rica, the system wants them to contribute as well. Whether we like it or, whether we use it or not, whether it is efficient or not, we all have to pay into it.
The CAJA was an initial successful attempt for Costa Rica to develop the welfare state system that had been developed in North America and Europe in years past. Read more about the welfare state.
How the fees are determined.
Generally, CAJA fees are to be paid by the employees and the employers. However, Section 3 of the CCSS Law from 1943 allows the CAJA to determine by decree the fee amount to be paid by independent workers and voluntary members.
Unfortunately, the law and regulations are very vague in developing or establishing the fee contributions by independent workers and voluntary members. You have to dig a little to figure it out. Read the Caja Regulations.
The rates are determined by the Executive Board of CAJA. As in any institution, the board meets every week to make decisions in a number of issues. Every once in a while, they meet to reassess the rates for the fees related to the voluntary members and independent workers.
So, on November 28th, 2013, they established the rate for these fees. It was published in the Gaceta on January 14th, 2014, page 50.
For these purposes, MS means minimum salary or minimum wage. Your fees will be based on your income in relation to the minimum wage. So now, you have to go figure out what the minimum salary is in order to find out how much you have to pay.
Currently, the minimum salary (2018) is ¢300.255,79 (link http://www.mtss.go.cr/temas-laborales/salarios/decretos/decreto_salarios_2018.pdf) for a non-specialized worker. Below is the table with a breakdown of the sliding scale for contributions as determined by the CCSS based on current minimum wage.
This is the rate for the fees in a way that you can understand it.
*These are approximates.
The income level in colones is the amount of money as determined by the CCSS based on the minimum wage increments. The income level in colones is based on the actual minimum wage for 2018. The income level in dollars is self-explanatory, and it is based on an exchange rate of 609 colones per dollar. You can do your own calculations based on the current exchange rate. The contribution rate is the percentage of your income based on the income level that you will need to pay for CAJA.
The possible fees are an approximate of actual money that you will need to pay based on your income level. For instance, if you make between $986 and $1972, then you will need to pay somewhere between $70 and $140 in CCSS fees. Again, this is for illustration purposes, and the figures are rounded up. These fees are only applicable to a family unit, which means that the same fee applies to a single person or to a family of four.
Income is also based on the sort of Residency you may have. For example, for Pensionado, the basic income would be around $1000. For Rentista, $2500.
The information for this post was obtained from the CCSS regulations and memos issued by the Board of Directors for CAJA. If you believe that you are not being charged correctly, you may then request a review by CAJA or file a complaint with the CAJA customer service and complaint desk. This is easier for certain Residency categories that others.
Direct Beneficiary and Dependent Beneficiary
The Registration Handbook which establishes the basic rules for CAJA registration, establishes who is a direct beneficiary and who a dependent beneficiary. Section 14 of the Handbook defines the direct beneficiary as the person who registers as an employee, as self employed, as a voluntary contributor, or a member of any other special regime designed by law. Section 16 establishes the dependent as the spouse, child, partner, parents, and siblings. There are specific requirements for partners, parents, children and siblings, which refers to the financial dependability on the direct beneficiary.
According to section 15, a foreign principal beneficiary needs to provide the following to complete the registration:
- For foreigners who are already residents, they will need to provide the DIMEX.
- Foreigners who are registering for the first time and have just been notified with the approval from the Immigration Department, must provide the following:
- Approval notice from the Immigration Department
- Proof of payment of the government fees
- Valid passport
- Address confirmation.
Section 15 is applicable to all foreign principal beneficiaries. However, there is an exception to the DIMEX requirement, and is applicable to foreigners who are employees and are on a company payroll and do not have a valid immigration status. In these cases, the principal beneficiary is only required to produce a passport, and there is no need for the DIMEX.
Needless to say, there are additional requirements when registering the dependent beneficiaries. According to section 19, the principal needs to provide the following documents:
- Valid ID. The valid forms of ID for foreigners are DIMEX or passport.
- Application form.
- Receipt for the payment of the CCSS fees, or orden patronal which is available only to employees.
In addition, section 20 requires the dependent spouse to provide the following:
- Valid ID.
- Marriage certificate in order to demonstrate the relationship to the principal. The marriage certificate must be recent, meaning no older that a month old.
- Address confirmation.
For dependent minors, section 22 requires the following documents:
- Valid ID.
- Birth certificate to demonstrate the relationship to the principal.
- Address confirmation.
The following sections of the handbook outlines the requirements for children out of wedlock, handicapped children over 18 years of age, handicapped siblings and dependent parents, as well as some other special regimes.
According to the foregoing, and as far as foreigners is concerned, the handbook provides the following requirements:
- Marriage certificate and birth certificate when applicable.
Section 11.2 sets forth the methods to demonstrate the address for the place of residence of the beneficiary as follows:
- Utility bill.
- A lease agreement.
- Payment receipt for the lease.
- Affidavits from two witnesses indicating the address.
The requirement to register dependents separately.
As previously announced back in October 2014, the Gerencia Médica (medical management) of CAJA, issued the updated version of the rules governing the registration of beneficiaries under the system. Since then dependents are required to register separately, which means that the cost for couples or families is not only higher, but the process takes a bit more time. Dependents are required to register before the applicable EBAIS (Equipos Básicos de Atención Integral en Salud) or health center closest to the place of residence, in accordance to where the principal registers.
Process dictates that a series of documents must be filed, as reviewed a few lines back. Once all requirements are filed, the EBAIS or health center takes approximately 10 business days to approve what is known as the family benefit (beneficio familiar). Family benefit is automatically approved until the age of 18 years old for minor children. For adults, it is granted initially for 15 days. Upon issuance of the DIMEX, it is necessary to return to request its extension. Once extended, dependents will be covered until the date of expiration of their DIMEX.
Normally, in the vast majority of cases we handle, at the very beginning of the process we ask our clients to sign a series of Powers of Attorney, including one for CAJA.
Upon issuance of the approval notice from the Immigration Department, we request our clients to fill out a mandatory CAJA form. With the POA, form and additional documents mentioned above, we attempt to register on our client´s behalf, thus saving them a trip to CAJA.
If, for any reason, later on the client wishes to change or update their CAJA location to a new address, that is entirely possible by showing the DIMEX and proof of this new address. However, for the initial CAJA registration following approval, we rather process it via POA to make things easier.
Upon registration of the principal beneficiary, we also coordinate registration of the dependents.
Not everything tends to run smoothly. Even though CAJA has a Handbook and one would expect every office to follow the same rules, that is not how it works. Some CAJA offices accept POAs, others do not. Some requests additional documents per discretional powers. The same office may change requirements without previous notice. In summary, each office has its own set of rules meaning we are left with the additional duty of tying to figure them out!
Consequently, we always ask our clients to please bear with us during the CAJA registration process. Our intention is to make a cumbersome and inconsistent process as orderly and friendly as possible. However, this may take a bit of time.
Irene Brenes collaborated drafting this article.