Chile Senate approves municipal compensation mechanism in national megareforma

The Senate of Chile voted 27‑22 to approve the final article of the National Reconstruction plan, establishing a compensation mechanism for municipalities that will lose revenue from the exemption of contributions for senior citizens. The measure allocates roughly 110 billion Chilean pesos to the Common Municipal Fund and 80 billion pesos directly to municipalities, ensuring local budgets are not reduced.

The vote cleared the last hurdle for the megareforma, allowing the bill to be dispatched to the executive for final signing. Support came from senators such as Alejandro Kusanovic, Paulina Núñez and members of the UDI, while opposition legislators warned that the funds should flow through the Common Municipal Fund rather than directly to local governments. The government, represented by Finance Minister Jorge Quiroz, negotiated with key senators to secure the necessary backing.