The Supreme court yesterday has declared itself ready to intervene in the argument between Córdoba and the national government in a row over pension payments. The provincial government claims it is owed $1,040 million from ANSeS, the public body in charge of pensions and social security.

However Anses and the national government claim Córdoba province has not adjusted its pension calculations in line with the agreement, rendering it incomplete.

The Court yesterday promised a conciliatory hearing for the second half of September.

The argument between José De La Sota’s government and ANSeS began at the end of last year, when the Nation suspended pension funds to Córdoba. De La Sota claims a debt of more than $1bn was accumulated but ANSeS denies these payments should be made. The social security programme claims that the funds were a part of the Armonizacion y Finanancimiento Previsional agreement, which, according to them remains incomplete.

The Supreme Court has historically intervened in economic disputes such as this between the national and provincial government. However a few days ago, tribunal judge, Eugenio Zaffaroni  publicly stated that Santa Fe and Cordoba judges should  “meet around a negotiating table” and not leave the decision to the Supreme Court.

This statement was derided by Hermes Binner, ex presidential candidate for the Frente Amplio Progresista who said “where else are the provinces going to go? To the moon?”

The Court will decide on a date for the hearing in a few days, after which it will confirm whether to proceed with the injunction against the national state requested by Córdoba.

According the Court sources, a payment had been agreed by both parties. However the Nation argues that the province has not amended its pension legislation, rendering the agreement incomplete. Córdoba claim the legislation was completed.

Head of the Ombudsman’s office, Anselmo Sella added his voice to claims surrounding incomplete pension legislation yesterday, claiming the issue was not with ANSeS.

“In 2009 the province agreed to converge with all the points of the contract, including the determination of the pension system,” he said yesterday.

“The agreement requires that pensions be based on the last ten years of work, as with the national plan, not the four years as is currently the norm in the province.”

Amidst this conflict, the provincial government almost unanimously agreed on a law proposed by José Manuel De la Sota to nullify the 1992 Fiscal Pact which allows the nation to retain pension funds from the provinces.

The pact allowed the National government to keep 15% of Coparticipation funds from Córdoba and 11 other provinces to finance pensions. Pension legislation was re-organised in 2008 but this 15% was never returned to the provinces. Now Cordoba argues it should have been.

Last week De La Sota called for a rejection of this pact and called for a “recuperation of what is owed to the provinces.”

Citizen requests are flooding the website of the National Administration of Social Security (ANSES), as the Procrear credit program opens up to funding queries for new housing construction and mortgage loans.

The program primarily targets owners of land seeking to finance construction on their properties. Yesterday, however, President Cristina Fernández de Kirchner decreed a new plan to address relocation and mortgage financing.

The government has published a list of 86 properties, totalling 1820 hectares throughout all provinces, which will be the sites of new housing developments. These include Rosario, Mendoza, La Plata, and Buenos Aires, each with areas set aside for new housing.

Following yesterday’s decree, query submissions on the ANSES web site have quadrupled, bringing in approximately 150 visits per second. Of the requests made so far, 56% have come from people who currently own land, while 43% have come from individuals without land, seeking mortgage loans or relocation.

The Procrear program is aimed at boosting economic activity, creating jobs, and providing solutions to the housing problems of low-income families. While acknowledging that there is a relatively large amount of credit available through major public and private banks, yesterday’s decree also cautioned “the conditions are highly restrictive for potential applicants of different income levels.”

Mortgage loans will be financed through a state-supported trust offering fixed interest rates between 2% and 14%, for plans up to 30 years. People of lower income will have access to smaller loans for which the monthly fee does not exceed 40% of their income.  The system will receive additional funding through bonds issued by the trust.

“[This project] is a safe investment for ANSES resources,” said ANSES chief Diego Bossio. “When a loan is designed with affordable terms, people pay.”

The president announced yesterday that pensioners earning less than $1,500 monthly will receive an extra $500 payment in December.

The benefit will reach over four million pensioners, which is 83.6 percent of the total, according to President Fernández. Previous extra-sum payments have been made to retirees, $200 in 2008, rising to $350 in 2009, President Fernández says is “30% more than they’ve received in 2009”, recognizing the real impact of inflation.

This measure will take $2.031 million in addition to the National Association of Social Security’s (ANSES) total of $137 billion allotted to retirement, pensions and Universal Allowance for Children. She also stated that payments for social security will reach $2.069 million.

With the announcements acceptance and criticisms she stated, “the state has been able to recover the administration of its economy,” which makes the additional $500 possible. President Christina mentioned that this measure was to continue progressing and “further implementing the task to redistribute income, which was begun by former president, Néstor Kirchner in 2003.”

President Fernández, commenting on the nine percent expansion of the national economy over the last 13 months, states that it is “higher than the entire planet.” She admitted that “we have continued to advance (since 2003), but this is not enough.”

She emphasized the importance of adding 2.6 million citizens who are eligible for retirement to the pension system through means of an extension. The benefit “is not only monetary” but also “covers health insurance,” explained the president, “Argentines are enjoying a moment of high social inclusion.”

The one-time addition of $500 does not include, for now, a one million non-contributory pension beneficiaries charge through ANSES.

A bill that is advancing through congressional committees with the support of opposition legislators would raise retirees’ monthly pension payouts to 82% of the minimum wage.  Current pension payouts are 50.6% of the minimum wage, or AR$895 per month.

Another measure demands the repayment of pension funds that were never distributed, according to a Supreme Court ruling.

In a press conference, Finance Minister Amadou Boudou and the chief of the National Social Security Administration (ANSeS), Diego Bossio, said the government does not have the resources to raise pension payouts to 82% and called the costs associated with the increase “impracticable”.

Boudou estimated the bill would cost ANSeS AR$30 million annually and cause a deficit equal to 2.5% of GDP. The proposals would cause “the bankruptcy of the provisional system, the fiscal deficit, the debt, and, quite frankly, a loss of jobs,” said Boudou.

Boudou also said that currently “there is only one country that pays 82% of the credits of active workers, and that’s Luxembourg.”

But opposition legislators said Boudou was “exaggerating” the cost of the proposal and presented evidence that higher payouts can be covered through an ANSeS surplus account and larger corporate contributions to the retirement system.

The government recently took AR$ 1.2 billion from ANSeS funds for the servicing of debt and current expenses, according to La Nación.

In pension payouts, Argentina finds itself above Brazil and Chile, which pay 46.1% and 48.5% respectively, but below Uruguay, which pays 60.1%, the highest in Latin America.