Needs-based Money Distribution Scheme

How do we distribute the profits we produce?

When we talk about cooperativism, what usually gets a lot of attention is the way we distribute the money generated by our work

We do not have a regular salary, since we are not employees but members of the cooperative, so for the work done we generate (or not) surpluses at the end of the year, that we distribute among the members monthly as economic compensations, in advance, to cover our needs.

The way in which these compensations are distributed is decided on the Assembly, it can vary a lot from cooperative to cooperative.

Until 2019, we had an egalitarian compensation scheme that consisted of a monthly amount, adjusted quarterly by the CPI index and with 1% per year of seniority, which allowed us to cover our monthly expenses. When we say egalitarian, we mean that except for that 1%, we would all withdraw the same amount.

New compensation scheme

Seeing that this scheme did not guarantee that all the members of the cooperative could cover all their needs, we decided to start the debate on a new compensation scheme.

For this, we looked for texts, articles, experiences from other cooperatives and structured a debate that would allow us to make a decision.

We held two meetings in small groups (of 5 or 6 members each) and two round tables in order to be able to:

  • Identify criteria and their corresponding pros and cons.
  • Prepare a proposal for each group according to the chosen criteria.
  • Make a shared proposal to see similarities and differences between the approaches.
  • Carry out a meeting where, besides raising our individual visions on the proposals, we could give form to the new compensation scheme together.

We emphasize this earlier instance of the conformation of small groups, since it was what enabled us to have the greatest amount of voices possible, and to have a final decision corresponding to our democratic and participative spirit.

Then, we set up a specific commission in charge of materializing the new scheme, researching, investigating, comparing and evaluating if our base compensation was adequate to cover all the needs that we identified.

Why by ‘difference in needs’?

The base compensation with which we counted covered the particular needs of the majority of the associates of the group. There were very few people that manifested in the quarterly reviews not to manage to cover theirs.

These particular cases occur, and demonstrate a difference in the needs to be covered. Knowing that for the cooperative it can be very onerous to accommodate in all the member’s compensations these particular facts, and visualizing the difference in needs, it is that we began to investigate other possibilities.

We came to the conclusion that it is much more accurate to think of an equitable retreat and not an egalitarian one as we had. Now, the question is: equitable based on what parameters?

Then, in order to understand why we chose to do it by difference in the needs, we think it is appropriate to make some reservations and clarifications before explaining each one of the points of the scheme:

We envisioned that it would be more just if we took into account certain differences in needs, since we don’t believe that other types of considerations build a better and more humane society. We do not subscribe to the criteria that brings competition and meritocracy into play. Nor do we credit the idea of giving recognition through money. For these same reasons, we believe that it is not necessary to continue considering seniority as a parameter, since it does not reflect our concept of compensation.

We see compensation, not as an end in itself, but as the means to guarantee us a dignified life, which allows us to cover certain needs: housing, food, health, education, clothing and recreation. Here is where we understand that there are needs that are different within the collective and that must be addressed.

In order to realize this, we decided to add to the basic retreat some additional needs that we believe reveal these differences: dependents, housing, health programmes, travel expenses, and menstruation management.

This debate as a whole is impacted by our values and principles. The scheme is not viable if they don’t come into play: trust and solidarity on the part of the group, and responsibility towards the collective by each associate.


Below is the compensation scheme, and a brief explanation of each of the points that make it up:

Base compensation:

  • Reviewed every 3 months.
  • Tied to the CPI index.

-We start at the compensation we had previously. First of all, it continues to be revised quarterly, tied to the CPI, as this allows us to keep it from losing its acquisitive power. Each of the items that make it up (housing, food, health, education, clothing and leisure) were analysed, and we understand that the amount allocated to each of them covers our monthly expenditure.


For different needs, we set up 5 additional compensation types:

Dependants: 5% per person

  • Children: The coop member has to obtain the government’s child allowance, and we provide the same value as an extra child allowance.
  • Others: For other dependant situations.

Housing: 4%

  • Rent Lease Renewal
  • Essential repairs or improvements to inhabit the space.

In this item, we visualize that people who rent have that extra expense every 2 years. We also consider that if someone who owns their home has an essential expense to live in it that is not covered by the base compensation, we must also guarantee it.

Exceptional travel expenses: 2%

  • If and when you spend more than 3% of your base compensation to get to Cambá.

This percentage is the current price of 4 non-differential transport tickets per day, 2 tickets to arrive to work and 2 return tickets.

Health programmes in case of Chronic conditions: 4%

  • In cases of chronic illness that require a higher amount of health coverage to be paid.
  • We have also established that the need to pay this may arise after members reach a certain age.

Menstruation management: fixed amount at the beginning of the year.

  • For all the menstruating members of the cooperative
  • For menstruating dependents

A fixed amount is established to be paid in January, determined by the amount of expenses reported by the partners in December. We think it’s important to start making room for these invisible gender issues.


  • We set a 25% gap between the base compensation and the maximum additional applied.
  • We concluded that 25% is a considerable percentage to cover the different needs but, at the same time, it doesn’t have a great impact on the cooperative’s general economic situation.
  • We set the maximum at 25% taking into account that the member with the largest number of dependents, at present time, does not exceed 3 dependents.

To be taken into account for its application

The use of the additionals is optional, leaving each member to consider whether or not the basic compensation covers their monthly needs.

We think that the compensation covers those expenses month by month, so it is not a topic on the surpluses debate. We believe that the surpluses, if they exist, should continue being calculated as until now, in proportion to the months worked.

Another issue to take into account is that there are colleagues who do not work full time. Within the cooperative there is the possibility of working ½ or ¾  part time. In these cases, it seems fair that as the compensations, the additionals should be calculated in proportion to the time worked.

In conclusion

The idea behind this paper is to show one of the many alternatives that there are to think about work and its retribution.

We know that it may have shortcomings but, at the same time, it was thought, structured and executed by the same people who are its recipients.

Many times we talked about another economy, and about centering what we believe is important.

As a self-managed collective, we have the possibility of generating these new priorities and, at the same time, we also have the duty to contribute other views.

Every time we allow ourselves debates of this kind, we visualize the potential of belonging to a space where everything is about to be created, and the only limit is the will of those of us who are part of it.

Information Sources

Several texts have been shared by the members of the coop over time, in order to take into account different points of view and to enrich the debate.

Below are some of the texts and articles we refer to -in spanish-:

Para que las diferencias no se transformen en desigualdad

Saberes Recuperados – Herramientas para la autogestión» el capitulo 3 Distribuir retiros

Factores de producción y valoración I

Factores de producción y valoración II

La teoría del valor en la Economía clásica y en la teoría de Marx

La Conquista del pan: – Kropotkin

El sistema de trabajo asalariado – Engels

De cada cual según sus capacidades, a cada cual según sus necesidades

Deja una respuesta