Government Senator Lambert Brown has suggested that a review of the National Insurance Act has become necessary in order to give more power to the Minister to increase the benefits to contributors when required.
He argued that it wasn’t necessary to ask Parliament for amendments to the Act to facilitate an increase as “these adjustments come very often given the movement of inflation overtime."
“Maybe it’s time through an amendment to the law to give the power to the minister to make an Order, adjusting essentially the numbers and whether that Order be subject to affirmative or negative resolution it certainly would be more efficient and a more efficient use of parliamentary time,” Senator Brown said.
He was speaking in the Upper House on Friday (Dec. 14), where amendments were approved to the National Insurance Act, resulting in increased benefits to contributors. The Bill was piloted by Minister of Justice, Senator the Hon Mark Golding.
Senator Lambert also noted that there should be a review of how the National Insurance Fund gets its funds and contributions.
The the scheme is not looking as healthy financially when you look at the long term. We need to do a review on the source from which we get funds and contributions,” he said.
In piloting the Bill Senator Golding, said the proposed changes to the Act are based on a recent actuarial review of the National Insurance Scheme (NIS).
“The amendments will ensure the long term sustainability of the National Insurance Fund, while continuing to provide meaningful benefits to pensioners and contributors,” Senator Golding said.
Opposition Senator Kavan Gayle while supporting the amendments noted that stiffer measures should be put in place to ensure that employers pay over the contributions made to the necessary authorities.
“That is a critical issue because from time to time you have employers making these deductions both National Insurance Scheme (NIS) and National Housing trust and they do not pay it over to the relevant authorities and it becomes perilous to the employees. It is a situation that must be stopped,” Senator Gayle said.
He also suggested that once a deduction has been made, evidence should be provided by the employers to the workers to state that “their deductions were in fact paid over the relevant authority.”
In his response, to the need for stricter measures to be implemented to ensure that employers pay over contributions, Senator Golding said an employee can sue his or her employer for 12. 5 times the benefit payable that would be lost by virtue of the deducted contributions not being submitted.
In terms of the suggestion of a Ministerial Order, Senator Golding said “it would make sense to amend the Act to allow the Minister to do it by order rather than have to go through the full parliamentary process time and time again.”
Effective January 7, 2013 the insurable wage contribution will be increased from $1 million to $1.5 million per annum.
There will also be an increase in the weekly contributions for domestic workers, self-employed and voluntary contributors. This will move from $50 to $100 a week and will take effect on January 7, 2013.
Pension and benefits payable to a special pensioner will move from $1,200 to $1,400 per week. This increase in pension and benefits will take effect on January 10, 2013.
Also the basic rate paid to old age, invalidity and widow or widower’s pension will be increased from $2,400 to $2,800. The basic rate paid to special children and orphan benefits will move from $4,200 to $4,900 per week. This will take effect on January 10, 2013.
As at March 31, 2012 the net assets of the NIS totalled $71.5 billion.