On Tuesday, President Sebastián Piñera announced new measures to support middle-class families impacted by the Covid-19 pandemic.
The measures include a bond of Ch$500,000, which does not need to be repaid and will be paid to all middle-class workers whose pre-pandemic formal monthly income was between Ch$500,000 and Ch$1.5 million, but has fallen significantly. Ten days after this law is enacted, this aid will be paid to middle-class workers whose formal income has fallen 30% or more, including those who are employed, on suspended contracts, unemployed, working on contract or self-employed.
The bonus will also be paid in decreasing amounts to workers with monthly income between Ch$1.5 and Ch$2 million who have experienced a reduction in their purchasing power.
“The middle class is the pride of our country. They have made progress based on their own merit and effort. Today, given these times of adversity, they are facing major threats and fears. We must and we can change this situation,” said the President at an event at the La Moneda Palace where he was accompanied by the First Lady, ministers, party leaders and parliamentarians.
The President also announced a government solidarity loan for the middle class. Three monthly disbursements, for a maximum of Ch$650,000 each and a maximum total of Ch$1.95 million, are available to offset up to 70% of the drop in income. The loan will have a year grace period and three-year repayment term, with payments capped at 5% of income.
“The State will forgive the loan if a family has been unable to repay the full amount by the end of that four-year period,” the President said.
To protect middle-class housing, the President signed the 6-month deferral of mortgage loans through a state guarantee, and increased the three-month rental subsidy to up to Ch$250,000 applicable to rents up to Ch$600,000, which will cover up to 70% of rent payments for families whose income has fallen 30% or more.
Furthermore, property tax payments for the second half of the year have been postponed for families whose income has fallen for all primary residences with a taxation value below 5,000 UF.
Likewise, the President announced a new deadline to give students in higher education the opportunity to apply for preferential State financing and deferral of up to three months of state-guaranteed loans.
“Our administration’s mission is to protect Chilean families in these times of adversity,” said the President.
These measures come in addition to the US$30 billion social protection network created by the administration to protect the income and employment of 12 million Chileans.
“It is only by acting very sensibly and urgently to address the shortfalls and needs of Chilean families and with great responsibility and vision in terms of solutions that we will be able to reconcile the protection that families need during this emergency with the equally necessary boost and ongoing protection that they require,” said the President.