New NIB rates take effect today

Amendments made to the National Insurance Act pursuant to Finance (No. 2) Act, 2016, introduce a new earnings class and contribution table; increases the maximum insurable earnings from $12,000 to $13,600 monthly; increases the contribution rate from 12 to 13.2 percent; introduces new sickness and maternity benefits rates and new basic retirement and invalidity pension rates.

The NIBTT said the increase in the maximum insurable earnings will effect in an equivalent increase of 13.5 percent in all contribution classes of insured persons. Once in effect, the increases will result in a greater number of the NIBTT’s customers being able to qualify, in their own right, for a retirement pension in excess of the minimum pension of $3,000 over time, with simultaneous increases in other short term benefits. There will be no change to pensions in payment or fixed rate benefits in payment.

However, where qualification to benefit arises on or after September 5, 2016, the new benefit rates will apply.

NIBTT Executive Director Niala Persad-Poliah said, “The NIBTT’s decision to increase the contribution rates and the maximum insurable earnings was in keeping with the conclusions of the 9th Actuarial Review which recommended a robust mix of short-term and long-term reform measures to fortify the strength of the national insurance fund in coming decades.” She added, “ It was also one of the best short-term measures to adopt to ensure fund sustainability.” Persad-Poliah said the NIBTT will continue to engage the public through a national sensitisation campaign for employers and employees to ensure there’s awareness of the new rates and an understanding of the importance of employers paying the correct rates for employees.