Social Protection

Building social protection floors
and comprehensive social security systems

Paraguay

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Situation and Priorities

Social protection situation

Paraguay's social protection system is fragmented with low coverage. Non-contributory programmes such as Tekoporá and Tenonderá offer support to vulnerable families with children and youth, while the Pension Alimentaria serves as a basic pension for the elderly in extreme poverty. Coverage remains limited, and benefits do not necessarily lift beneficiaries out of poverty. Contributory social security covers dependent workers in the formal economy, but many schemes face financial sustainability and equity challenges. Paraguay also lacks an unemployment insurance scheme.

Although access to healthcare is free and guaranteed through public institutions since 2007, households that contribute to the social security system generally use services provided by social security agencies or those in the private sector, financed through private insurance schemes. The low formalization of the labour market, at around 30%, limits individual and household’s access to social security.

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COVID-19 and other crises

Paraguay responded quickly and efficiently to the pandemic with social protection measures. These showcased Paraguay’s capacity to deliver solutions for a large part of the population, but the measures subsided as the crisis receded::

  • Pytyvõ: The cash transfer programme was extended to workers in the informal economy who lost their jobs.
  • Tekoporá: The coverage and benefit levels of the programme were increased, first on a temporary basis, and then permanently following the decision by the Ministry of Finance in August 2020.
  • The level of benefits for non-contributory pensions was increased.
  • The government implemented and financed a furlough scheme for workers suspended by employers in the formal economy. The ILO provided advice and support to the Ministry of Labour, which was involved in the establishment of the scheme.

Finally, COVID-19 highlighted the need for a statutory unemployment insurance system, with the ILO providing extensive support in the design of a social insurance.

Paraguay is also exposed to climate risks: droughts, floods, wildfires, and extreme heat limit households’ capacity to generate income (especially in the rural sector) and threaten livelihoods tied to two industries critical to Paraguay’s economic structure (e.g., cattle and soybean).

Visit the Social Protection COVID-19 Monitor
Government and social partner priorities

Aside from developing an unemployment insurance system, the government has begun implementing its Sistema de Protección Social “Vamos!” in four selected territories. Launched in the second half of 2018, it is centered around three pillars –social assistance, economic inclusion and social security – and fully considers a life cycle and rights-based approach to social protection. The system aims to integrate existing social protection initiatives and create new ones if needed.

  • Social assistance further develops the non-contributory component of the system.
  • Economic inclusion promotes the entry of individuals into the labour market and, in particular, to the formal economy.
  • Social security offers a space to improve the contributory component of the social protection system, including pensions.
     
Contributory pensions face financial sustainability and equity challenges. The government and social partners have committed to advancing the debate in line with the recently ratified Convention on Social Security (Minimum Standards), 1952 (No. 102).

ILO Projects and Programmes

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Results

The ILO has been a close partner of the Ministry of Labour since its creation in 2014, assisting with capacity-building activities related to the implementation of social protection programmes according to international norms, statistical collection and analysis, and expanding effective access and coverage. The ILO also supported the development of the Social Protection System ("Vamos!") framework, which was adopted by the government in 2018.

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Funding gaps / Support the ILO

US$ 200,000

Implement an unemployment insurance scheme

Impact: 600,000 workers in the formal economy
US$ 100,000

Strengthen and mainstream social dialogue instruments through capacity building & participation of workers' & employers' organizations

US$ 400,000

Assist the social security agency in reforming is pension fund, improving its health insurance and the management of the affiliation, collection and control systems to ensure its long-term sustainability

US$ 100,000

Develop the emergency social protection schemes to support regions afflicted by slow and fast onset disasters (e.g. droughts, floods, forest fires)

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