NIS to pay out $1.5b to beneficiaries this year
APPROXIMATELY $1.5 billion will be paid out to beneficiaries under the National Insurance Scheme (NIS), with new increases in both contributions and benefits, for 2013.
Acting director of the NIS Portia Magnus said the benefit increases include old age, sugar worker, invalidity, widow/widower's pension, and orphan and special child allowances.
She explained that benefits for old age, invalidity, and widow/widower's pension will be increased from $2,400 to $2,800 per week for full rate; from $1,800 to $2,100 for the three quarter rate, and from $1,200 to $1,400 for the half rate.
Speaking at a recent JIS Think Tank, Magnus added that both the special anniversary and sugar workers' pensions will be raised from $1,200 to $1,400 per week. The new weekly rate for the dependent spouse, payable to qualified old age and invalid pensioners, will now be $900 (up from $800), while the orphan and special child allowances will increase from $4,200 to $4,900 per week.
The NIS funeral grant will be increased by $10,000, moving from $70,000 to $80,000. Old Age, invalidity, and widow/widower's grants will also be raised by $10,000 to $50,000 (up from $40,000), while orphan and special child grants will move from $48,000 to $55,000.
The NIS director also explained that the flat rate contribution made by domestic workers, voluntary and self-employed persons will also be increased from $50 to $100 per week (using $100 NIS stamp cards).
"What is being deducted will be set aside for future benefits, because for every dollar that is contributed to the NIS, there is a liability for payments of benefits to the contributor later," Magnus explained.
With respect to the Insurable Wage Ceiling (IWC), which is the maximum income in which NIS and the National Health Fund (NHF) contributions are calculated, she said that the increase in the IWC is necessary to ensure the sustainability of the scheme, and will enable it to meet pension obligations.
"The increase in the IWC means that workers who currently earn over $1 million and up to $1.5 million per year, will begin to make more contributions, effective January 7, 2013," she informed.
The NIS director further added that workers earning below $1 million per year will not be affected by the increase, and persons earning above $1.5 million will not have any contributions deducted from their annual earnings in excess of $1.5 million.
She is appealing to non-contributors to start investing in the scheme, so that it can grow from strength to strength, and be of great benefit to them in the future.
"We are mandated to promote a culture of saving among the Jamaican people, especially the non-contributors, who are of the impression that the NIS is a tax, or just a pension plan," Magnus said.
She emphasised that the NIS will continue to target workers at the grass-root level, such as hairdressers, barbers, and dressmakers and construction workers, so that they will be encouraged to start investing in the scheme, in order to reap the benefits in the future.
Financed through the National Insurance Fund, the NIS is the main contributory component of the country's social protection system, providing a minimum guarantee for the majority of workers, especially those who are not participating in occupational pension schemes.