While weekly workers could have already experienced paying increased contributions to the National Insurance Scheme as of 1 January 2014, monthly workers will begin paying increased contribution as of the end of the month.
The National Insurance laws make provision for an Actuarial Review of the NIS operations to be conducted every three years. This is done by an Actuary who primarily assesses the financial and actuarial soundness of the Fund and makes recommendations as to the adequacy of contributions payable, and the relevance of benefits paid to ensure the long-term sustainability of the Fund.
Following the eighth review, the National Insurance (Collection of Contribution) Regulation was amended on 29 October 2010 (SRO 23 of 2010) resulting in increases in the ceiling on which National Insurance contributions are payable, effective 1 November 2010, 1 January 2012, and 1 January 2014.
“What this means is that effective 1 January 2014, the ceiling on which NIS contributions are payable has increased from $4,250.00 to $5,000.00 for monthly paid employees, and from $990.00 to $1,160.00 for weekly paid employees,” said Mrs Camille Gibbs-Douglas, Public Relations Officer at the NIS. On 1 November 2010 the ceiling became $3,500; on 1 January 2012 it moved to $4,250; and the last increase to $5,000 from 1 January 2014.
Mrs Douglas explained that the contribution rate remains at 9% of total insurable earnings with employees between the ages of 16 and 60 paying 4% and employers 5%, and the under the new structure it means that an employee who earns $5,000.00 or more per month as of 1 January 2014 will now have to contribute $200.00 and the employer $250.00, making the total National Insurance contribution payable $450.00.
Employees under the age of 16 and over the age of 60 do not pay contributions, but employers have to pay a 1% contribution for employment injury. “Each working person must be registered and be covered for employment injury,” Douglas said.
Since the commencement of its operations in 1983, nine Actuarial Reviews have been conducted, resulting in a number of significant changes to the NIS regulations. The Ninth Actuarial Review which was conducted in 2011 recommended an increase in the pension from 60 to 65 over a 20 year period.
The tenth review is scheduled to take place during 2014.
By Linda Straker
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