JIS News

Director of the National Insurance Scheme (NIS), Denzil Thorpe, is reminding NIS contributors that effective August 2010, persons who earn more than $500,000 per annum will be required to contribute more to the scheme.
Speaking at a JIS ‘Think Tank’ on August 19, Mr. Thorpe said that the increase in contributions is one of the recommendations arising from an actuarial evaluation carried out last year on the National Insurance Fund (NIF).
The evaluation, he said, highlighted the need for reform of the scheme in order to ensure its long-term viability and sustainability.
“Based on the actuarial recommendations Cabinet approved an increase in the insurable wage ceiling from $500,000 to $1 million effective August 2, 2010. This means that employed persons, who earn more than $500,000 per annum will see an increase in their NIS deductions, while persons who earn $1 million or more will have their deductions doubled,” he informed.
Persons, who earn below the $500,000, will not see any changes in their contribution to the scheme. The contribution rate remains at 2.5 per cent by the employee, matched by a similar contribution by the employer.
On the other hand, domestic workers and self-employed persons, who use stamp cards to make their flat rate contribution, will see an increase from $20 per week to $50 per week.
Members of Parliament and Jamaica Defence Force soldiers, who currently make the $20 per week flat rate contribution, will now contribute to the scheme by way of payroll deductions up to the new $1 million insurable wage ceiling.
In addition to the increase in contributions, Mr. Thorpe outlined that the qualifying age for receiving the NIS retirement benefit will be unified for females and males at 65 years starting January 2011. Currently, the NIS retirement age is 60 years for females and 65 years for males.
Mr. Thorpe is however advising women, who will reach age 60 in 2011 that they will not have to wait until age 65 to access their benefits, as the retirement age will be raised in one-year increments over a five-year period.
“What will happen is that the female retirement age will gradually increase.so those women reaching age 60 in 2011, will have to wait a maximum of one year to receive the benefit, those reaching 60 in 2012, will have to wait a maximum two years to receive the benefit, and so on,” he explained.
He informed that the United Kingdom (UK) system, on which the NIS is modeled, is also in the process of unifying the retirement ages for females and males at age 65.
The reforms being introduced are intended to ensure the long-term viability and sustainability of the NIS, while maintaining realistic benefits for contributors. The actuaries have indicated that the adjustments in benefits are affordable.
The NIS is a compulsory, contributory-funded social security scheme covering all employed persons in Jamaica.

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