by Linda Straker
- NIS contribution rates will be adjusted from February 2023
- NIS legislation to increase pension age to 65 by year 2031
- NIS Act to be amended to protect disadvantaged children, survivors’ and maternity benefits for common law relationships
The increase in National Insurance Scheme (NIS) contributions which was announced by Prime Minister Dickon Mitchell when he presented the 2023 budget statement in December 2022, is proposed to begin from February 2023.
“As per the start date of the increase in NIS contributions, it is proposed that the rates be adjusted from February 2023,” Press Secretary Tahira Carter replied when asked via an email letter of inquiry, the starting date for the 1% in contribution increase.
In December, Prime Minister Mitchell told the House of Representatives that in the current construct, the NIS will be bankrupt in the next 10-12 years if the Government does not take action to the social security institution which was established in 1983 by the People’s Revolutionary Government (PRG).
“This Government is prepared to make the tough decisions because we care about our people,” said Mitchell.
Not only will the Government give the National Insurance Board the authority to increase deductions, but it will also amend the NIS legislation to increase the pension age to 65 by the year 2031 and strengthen its protection for children of deceased insured people.
“We will implement the following recommendations of the Actuary next year: (i) Increase the pensionable age on a phased basis from 60 to 65, starting with a move to 61 by January 2024. (ii) Gradually increase the contribution rate for employers and employees from its current level of 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,” he said.
Section 28 of the NIS legislation provides for the Minister with responsibility for NIS to adjust the rate of contribution for both employer and employee. That change must first be gazetted as a cabinet of Minister SRO with a date of effect before it is enforced. The current minister is Phillip Telesford.
“The Minister may make regulations to provide for — (a) the fixing from time to time of the rates of contributions to be paid by insured persons and employers, including the rates of contributions to be paid by such different categories of insured persons and employers as prescribed: Provided that no variation of the total rate of contributions payable shall be made without prior consultation with an actuary,” said the legislation.
The Prime Minister told the House that Government will also 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.
