Outlier Legal Makes Expat Voices Heard

The CAJA fees have been reduced for residents under the pensionado category and other categories of residency with no income produced in Costa Rica.

The Costa Rican Social Security Fund (aka CAJA) has been a headache for residents during the past several months. With a recent change of rules that came into effect in March, CAJA has imposed to all the residents the obligation to pay a special insurance coverage specifically for disability, old age and death (IVM) which automatically increased to almost double the amount of fees foreign residents need to pay CAJA. Generally, this contribution will eventually grant the beneficiary the possibility to receive a pension in Costa Rica. However, this is contrary to the equal application of the law to foreigners, considering that Costa Ricans with no income, do not have to pay for the IVM to CAJA.

As part of our commitment to the expat community, we have filed numerous complaints in the Supreme Court against CAJA to no avail. We decided to change the course and continued to fight the system hoping to change the regulation and we have succeeded. On September 5th, 2022, our Regional Immigration Manager Mario Rodriguez filed a complaint with the National Council for Senior Citizens (CONAPAM) to inform of the violation to the rights of the residents that have applied as a retired person or pensionado. We explained to the CONAPAM that the regulations force foreign nationals to pay for a pension they will never be able to receive. The CONAPAM forwarded the complaint to the Financial Management Office of CAJA (Gerencia Financiera) for review.

As a consequence, the Financial Management Office has made an official statement, that according to the  CAJA pension fund regulations, the person that has been approved as a resident in Costa Rica under the retired person (pensionado) category is excluded from paying the fees for disability, old age and death (IVM). Therefore, the people who currently have residency in Costa Rica as retired person (pensionado) are no longer required to pay for the IVM insurance, and are only required to contribute to the system for sickness and maternity (health coverage). With this, the CAJA monthly fee, will be reduced. This exclusion should be done by the authorities at any moment. However, this can also be requested by any applicant to the CAJA officer processing a new registration.

Let’s review what this means. A pensionado with a monthly pension of $1,500 USD, is currently paying a monthly fee of approximate ₡123,000 colones ($200-$210 USD) which includes both the healthcare coverage as well as the retirement program. Now, with the reduced fees resulting from the rule modified by CAJA, the monthly fee will be approximately of ₡57,500 colones ( $95-$100 USD) which will cover for healthcare only.

The good news does not end there, in the response we received from the Financial Management Office, they expressly stated that this contribution can also be waived to other residents under different categories if they do not work or do not have an income-generating activity in Costa Rica. We want to highlight that even though the Financial Management Office has made the statement and has been very clear about it, it is possible that down the road we will find challenges with the application of this regulation by the officers at the CAJA, when it comes to other categories of residency.

In a related matter last week, the Costa Rican Congress filed a bill to change the current immigration law with the intention of attracting more residents to the country. The purpose of this bill is to contribute to the economy by attracting investors, retired people and rentistas to Costa Rica by eliminating the obligation to enroll in the CAJA system and make this a voluntary decision by residents, very similar as it currently works next door in Panama.

This bill is under review, the congress must read the proposal, accept and make a vote to turn this into a law. With all of the above, Costa Rica is looking for a more affordable and easier process for foreigners that are looking to settle here.

Outlier is committed to assisting foreign nationals in Costa Rica and to change the rules when they are a detriment to the immigrants in Costa Rica, we will keep fighting to make sure the laws are equally applied to every person.

We are here to help you navigate through the residency journey!

Below you can see the resolution we received from the Financial Management Office of CAJA.