by Linda Straker
- NIS contribution rate increases by 0.5% for employers and employees in 2023
- Increase in pensionable age starting with a move to 61 by January 2024
- NIS Act to be amended and strengthened
3 years after the National Insurance Board (NIB) adjusted the contribution rate for employees and employers, an adjustment will be made from January 2023. There will be periodic adjustments until the rate reaches 16% in 2031.
The adjustment to the National Insurance Scheme (NIS) contribution rate is one of 2 adjustments that will go into effect in the coming months. The other is an increase in the pension age which currently stands at 60, but will move to 61 in 2024 and sporadically increase annually until 2031 when it is capped at 65.
Finance Minister and Prime Minister Dickon Mitchell announced the adjustments on Monday, 5 December 2022, when he presented the 2023 Budget or the Annual Estimate of Revenue and Expenditure.
“The current National Insurance Scheme is an important pillar in the social protection architecture in this country… in the current construct, the NIS will be bankrupt in the next 10–12 years. This is the harsh reality that we face. This Government is prepared to make the tough decisions because we care about our people,” he said before outlining the changes.
The first change will be an increase in the pensionable age on a phased basis from 60 to 65, starting with a move to 61 by January 2024. For the years 2025 and 2026, it will be 62. For the years 2027 and 2028, the new pensionable age will be 63; for the years 2029 and 2030 it will be 64. The adjustment will stop in 2031 when the pension age reaches 65.
The contribution rate for employers and employees will move from 11% to 16% by 2031. “Starting with an increase in 2023 to 6.5% and 5.5%, a 0.5% increase for employers and employees, respectively,” said the Finance Minister before informing the Parliament of other legislative changes for the NIS.
“Furthermore, Government will amend the NIS Act and strengthen the existing system to include protection for children of a deceased insured who are disadvantaged due to the negligence of a parent, and the inclusion of survivors’ and maternity benefits for persons who are in common law relationships,” he said.
In January 2020, the contribution rate increased from 9% to 11%. This was the first of the 2 recommendations made in the 11th Actuarial Review. However, the then-ruling Dr Keith Mitchell-led New National Party government, as part of its Covid-19 stimulus measures, reverted the rate to 9% in April. It returned to 11% on 1 August 2020.
The cause for increase in NIS is a lack of economic activities. Currently, NIS rely on one pool of folks for contributions. According to reports, there is 30% unemployment in Grenada. Get those unemployed jn good paying jobs. However, this requires significant economic activities.
To add, over the years government has been using NIS as a piggy bank and should be illegal. NIS finance should be beyond government access.
Was NIS able to recover funds borrowed by the government through the sale lands which the government provided as payment?
15-25 one hundred rooms hotel for starters. While CBI seems to be easy money hotel investments requires a lot more work..evident the government is lazy and lacks the will power…
NIS taking out their tithe and offering. My genes dont live long so ill have to take mines while im living