by Linda Straker
- 1% increase in contributions to NIS from 1 September 2019
- Currently, employees contribute 4% and employers 5%
- NIS legislation must be amended for changes go into effect
As of 1 September 2019, both employers and employees in Grenada will be required to pay a 1% increase in contributions to the National Insurance Scheme (NIS).
Addressing the weekly post-cabinet briefing on Tuesday, 23 July, Oliver Joseph, Minister for Trade, Industry, Cooperatives and Caricom Affairs announced that cabinet had approved the recommendation from the scheme’s board following months of intense consultations with a wide cross-section of the public.
“Cabinet at its meeting on Monday approved the recommendation of the Board of the National Insurance Scheme to increase the contribution rate from 9% to 11%. This is to be shared equally between employees and employers. The employer will be 1% additional, and the employee 1%,” he said.
The current formula is that employees contribute 4% and employers 5%.
Joseph said that under the new arrangement employees will contribute 5% and employers 6%. “The actuary report on the last 3 occasions advised, they recommended that government increase the contribution rate,” he said explaining that if government waits longer, that will result in the NIS dipping more and more into its reserved funds.
“If you wait until 2030 or 2035 it means that you will have to increase it by 22% then, so this is being done in an incremental rate in keeping with the recommendation,” Joseph said.
During the period of March to June 2019, the NIS engaged in 18 public consultations where the topic was to share light on the need to increase the contribution and at the same time to increase the age of retirement. Joseph said that a final decision is yet to be made to increase the age of retirement.
“Cabinet has asked for more consultations with stakeholders on the effective date for the age,” said Joseph who pointed that during the consultation there was a support to increase both the age of retirement and contribution.
Nickolas Steele, Minister with responsibility for the National Insurance Scheme said that before the changes go into effect, the NIS legislation must be amended. “That amendment will be taken up at the next sitting of the House of Representatives,” he promised.
The next sitting is scheduled for August.