The Government is still debating what will be the update of the salary cap that gives the right to collect the family salary, which is between $283,220 and $404,062
By iProfessional
02/12/2023 – 9:31 p.m.
The ceiling is still under discussion and if the figure of $283,220 is reached, the improvement is 78.8%, less than inflation. That cap is updated in March and is always once a year. Currently it is $158,366.
The update of the salary cap that gives the right to collect the family salary is under debate in the Government, between $283,220 and $404,062. The difference determines that more or fewer registered workers can collect the family allowance.
It is because in the next few days, the salary cap that entitles dependent and independent workers to receive the family salary should be raised. By law, this ceiling is adjusted once a year – in March – according to the annual evolution of the RIPTE (Taxable Remuneration of Stable Workers) as of the previous October.
Thus, as of March, the individual income ceiling should rise to $283,220, compared to the current $158,366. A rise of 78.84% lower than the evolution of wages and inflation.
An annual adjustment with inflation of around 100% led to hundreds of thousands of parents each month not receiving the family salary.
The cap is currently $158,366 and is updated in March, once a year.
For this reason, this adjustment would allow the parents of 1.5 million boys and girls – data as of January – to return to collect the family salary per child that they have been losing in the last 12 months as a result of inflation and the evolution of salaries that They left the ceiling of $158,366 far behind, even more so with the lag that represents adjusting the values in March with interannual indices to October.
Then, as of April 2023, the loss would be repeated again because we would have to wait until March 2024 for the cap to be adjusted again.
Family salary: what is discussed in the Government?
Meanwhile, among the specialists and in the Government itself, a double discussion was opened because it is proposed that the cap adjustment be applied on a quarterly basis and be equal to the salary floor of the Income Tax, which is $404,062. This would imply concretizing this modification through a DNU.
It is that given this gap between the ceiling of the family salary and the floor of Profits, despite the rise in March, there would be boys and girls who would be left without any coverage because their parents will not receive the allowance per child because their income will exceed the new ceiling, nor will they be able to deduct it from Earnings because they will not be covered by that tax.
If the individual income ceiling for the collection of family allowances ($283,220) were unified with the floor from which the Income Tax is taxed ($404,062), around 590,000 parents of 945,000 boys and girls could join the allowance system relatives, according to Social Security data.
Another distortion covers the amount of Family Allowances that is adjusted for quarterly mobility. With 17.04%, the amount of the family salary per child has an increase -March 2022/March 2023- of 79.8%, also below inflation and the evolution of wages.
