High court orders government support of IESS to resume in 2019; Some demand retroactive repayment

Mar 24, 2018 | 0 comments

Ecuador’s high court ruled last week that a 2015 law ending government funding for the country’s Social Security (IESS) system was unconstitutional and ordered the contribution to resume in 2019.

Ecuador’s Constitutional Court

Not everyone is happy with the decision, however. “We are pleased that the court recognized the illegality of ending support since it guarantees the future solvency of the system,” says Francisco Ortiz, president of the National Front of Retirees of the IESS (Frenjubiess). “But we believe that the government should reimburse IESS all money it has owed since 2015. What [for president] Rafael Correa did to IESS amounted to a looting of tax payer money.”

The court’s ruling came as a result of a suit filed by Frenjubiess last year challenging a law that withdrew government funding to IESS except in times of “exceptional need.” The government contribution was 40% of the IESS budget.

In its judgment, the court said that the contribution “must be considered mandatory at the time of the 2019 national budget, in accordance with the provisions of Article 294 of the Constitution of the Republic.” The contribution is estimated to cost the government about $1.7 billion annually.

Frenjubiess said it would take its case to collect IESS arrears, amounting to about $4.4 billion, to the National Assembly. It says it will also petition the International Court of Justice in the Hague to order restitution.


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