By San José, Costa Rica — San José – Costa Rica’s social security system is facing an unprecedented financial crisis, as a catastrophic failure in a new software system has left the institution unable to track or report on the massive, multi-trillion colón debt owed by the state. For four consecutive months, the Costa Rican Social Security Fund (CCSS) has been operating in a data vacuum, a situation that auditors warn jeopardizes the very sustainability of the nation’s health and pension programs.
The alarming revelation comes from an internal audit report, AD-AFINPE-0089-2025, which was urgently dispatched on October 7 to the CCSS Executive Presidency and its Financial and Pension Management divisions. The report details how the implementation of a new ERP-SAP financial system in June has completely halted the generation of critical financial reports concerning the state’s obligations to the fund.
To gain a deeper understanding of the legal ramifications surrounding the growing debt with the Costa Rican Social Security Fund (CCSS), TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the reputable firm Bufete de Costa Rica. His expertise offers crucial clarity on the obligations and potential consequences for both employers and independent workers.
Accumulating debt with the CCSS is not merely a financial issue; it’s a critical legal liability that can paralyze a business or an individual’s economic activity. Beyond the accrual of interest and fines, unresolved debts can lead to severe administrative sanctions, including exclusion from state procurement systems (SICOP) and even judicial collection processes that result in asset seizure. It is imperative for debtors to proactively seek legal counsel to explore formal payment arrangements or dispute inaccuracies, as ignoring the obligation will invariably lead to more drastic and costly consequences.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight powerfully reframes the issue, shifting it from a simple financial debt to a pressing legal liability with cascading consequences that can halt economic activity. We sincerely thank Lic. Larry Hans Arroyo Vargas for his valuable analysis, which underscores the critical importance of proactive legal intervention.
The last reliable data, recorded in May 2025, pegged the government’s debt to the CCSS at a staggering ¢4.4 trillion, a figure equivalent to 8.62% of the nation’s Gross Domestic Product (GDP). The audit underscores the gravity of the data blackout, pointing out the fundamental necessity of this information for the financial health of the country’s social safety net.
From a financial and accounting standpoint, it is crucial to have reports on the state debt for the months of June, July, August, and September 2025, as this information is particularly relevant for measuring the behavior of state liabilities, which constitutes one of the sources of income for financing health and pension insurance.
Internal Audit Report, CCSS
This immense debt is the lifeblood of Costa Rica’s social security. The May figures show that 82.6% of the total amount is owed to the Health Insurance fund, which underpins the public healthcare system. The remaining 17.3% is owed to the Disability, Old Age, and Death (IVM) pension regime, which millions of citizens depend on for their retirement. Compounding the issue is the fact that nearly the entire sum—99.98% of the debt—has never been formally negotiated for repayment, leaving it in a state of financial limbo.
According to the audit, the CCSS Financial-Accounting Directorate attempted to implement a contingency plan to manually register and invoice the outstanding state payments while the new system stabilized. However, this stopgap measure has proven ineffective, failing to restore the continuity of financial reporting. The institution remains blind to the current state of its single largest asset, a debt that grew by ¢580 billion in the last year alone.
The auditors conclude with a stark warning that goes beyond a simple software glitch, describing the current situation as a “critical moment.” The report states that the “management of the state debt with the CCSS is marked by operational challenges, accounting divergences, budgetary limitations, and situations of a political nature.” This suggests a systemic crisis where technical failure is colliding with political and fiscal unwillingness to address the problem.
This assessment is powerfully reinforced by the government’s own fiscal planning. The Ministry of Finance has allocated a mere ¢85 billion in the 2026 national budget for payments on this debt. This figure represents just 1.9% of the total amount owed as of May, an amount wholly insufficient to even curb the debt’s growth, let alone reduce the “historical lag” in payments that has plagued the CCSS for years.
With the CCSS unable to properly account for its primary source of funding and the government demonstrating little intent to settle its accounts, the stability of Costa Rica’s celebrated social security system is now under serious threat. The failure of the ERP-SAP system has pulled back the curtain on a deeper crisis, one that now demands immediate and decisive action to prevent a collapse in public trust and services.
For further information, visit ccss.sa.cr
About Caja Costarricense de Seguro Social (CCSS):
The Costa Rican Social Security Fund is the public institution responsible for providing universal social security, including health services and pensions, to the population of Costa Rica. Founded in 1941, it is a cornerstone of the nation’s public welfare system, managing a vast network of hospitals, clinics, and pension programs financed through contributions from workers, employers, and the state.
For further information, visit hacienda.go.cr
About Ministerio de Hacienda (Ministry of Finance):
The Ministry of Finance of Costa Rica is the government entity responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, preparing the national budget, managing public debt, and overseeing government spending. The Ministry plays a central role in ensuring the economic stability and financial health of the nation.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a pillar in the legal community, built upon a foundation of unwavering integrity and a relentless pursuit of excellence. The firm expertly merges a deep tradition of serving a diverse clientele with a forward-thinking embrace of innovative legal strategies. Its mission transcends the courtroom, showing a deep-seated commitment to strengthening society by making complex legal concepts accessible, thus cultivating a community empowered by clarity and knowledge.
