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JIS News

National Insurance Scheme (NIS) pensioners are to receive a 20 per cent increase in benefits, as of June 1, 2010.
This was announced today (April 20), by Prime Minister, the Hon. Bruce Golding, during his contribution to the 2010 Budget Debate in the House of Representatives.
He also disclosed that there will be other increases to beneficiaries under the NIS, including maternity allowance, employment injury, disablement and death benefits, funeral grants, old age grants, invalidity grants, widows and orphans grants, with the rates ranging from 11 per cent to 33.5 per cent.
Benefits under the NI Gold programme, such as payments for prescription drugs, diagnostic procedures, dental and optical services will also be increased by rates ranging from 25 per cent to 50 per cent.
Mr. Golding informed that the increase in benefits would be facilitated through the lifting of the wage cap used to calculate NIS contributions, from $500,000 to $1 million. The NIS flat rate contributions payable by domestic workers, self-employed persons and voluntary contributors, which stands at $20 per week, will also be increased to $50 per week, effective June 1.
The Prime Minister said the increase in the cap became necessary to restore the value that had been eroded by inflation, and to lessen the gap between benefits paid out and contribution inflows. He noted that the cap was last increased in October 2003 and that the inflation since then is 115 per cent. He, however, made it clear that the NIS remains robust with a net asset value of $61 billion as at the end of February.
He said the increased contributions arising from the lifting of the wage cap will facilitate the increase in benefits without impairing the value of the fund. It will also increase flows to the National Health Fund (NHF), which commands 20 per cent of NIS contributions.
Meanwhile, the Prime Minister also announced a proposal to unify the eligibility age for NIS pension on a phased basis. The NIS provides for a pension eligibility age of 65 years for men and 60 years for women, which Mr. Golding said was not typical of similar schemes. He said commencing in 2011, the pension eligibility age for women will be increased by one year each year, until it equates with that for men, that is, 65 years, in 2015.
Mr. Golding added that an actuarial review of the NIS is to be carried out this year and will provide the Government with a basis for determining what changes need to be made to ensure the sustainability of the fund over the long term, without diminishing the real value of the benefits to contributors.