UNDERSTANDING NIS BENEFITS National Insurance Office by Mr. Kevin Harris and Ms. Shelley Blades “National Insurance…More than a Contribution. It’s your lifeline.”

Establishment National Insurance was established in 1967 for the purpose of providing benefits as may be specified in the NISS Act ; to substitute for the Workmen’s Compensation Act, 1963, a system of insurance against personal injury caused by accident arising out of and in the course of a person’s employment and against prescribed diseases and injuries due to the nature of a person’s employment; to establish for the administration thereof a National Insurance Board and a National Insurance Fund ; and for purposes connected with the matters aforesaid.

Objectives Contributors Benefits Payable -Short Pension Reform Benefits Payable-Long

CONTRIBUTORS WHO BENEFITS: Persons between the age of 16 and 66(pensionable age), is self-employed, or employed under a contract of service, is covered under the Act. Insurable Earnings $91 to $4,270 per month or $21 to $985 per week.

SHORT TERM BENEFITS PAYABLE Sickness Maternity Benefit/Grant Unemployment Employment Injury- (Medical and Travel Expenses)

SHORT TERM To qualify for Sickness Benefit Have credited not less that 7 contributions in the relevant quarter. Have been engaged in employment immediately before becoming ill. How is the benefit computed? The daily rate is 66 2/3 % of the insured person’s average insurable weekly earnings divided by 6

SHORT TERM To qualify for Maternity Benefit Have been insured for 26 contribution weeks Have paid at least 16 contributions in the 2 quarters but one before the contribution quarter in which the benefit could become payable. Self-employed- not less that 39 contributions paid or credited to her account. How is the benefit computed? The daily rate is 100% of the insured person’s average insurable weekly earnings divided by 6

SHORT TERM To qualify for Maternity Grant Must not be an Insured person Must be an insured person who does not satisfy the contribution conditions for Maternity Benefit. The Spouse must have been an insured person and have paid contributions for the relevant period. How is the benefit computed? The amount payable is $1, 125.00.

SHORT TERM To qualify for Unemployment Benefit Have been insured for 52 contribution weeks Have paid at least 20 contributions in the 3 quarters but one before the contribution quarter in which the benefit could become payable. Paid for a maximum period of 26 weeks. How is the benefit computed? The daily rate is 60% of the insured person’s average insurable weekly earnings divided by 6

SHORT TERM To qualify for Injury Benefit Must be incapable of work as a result of an accident arising out of and in the course of insured employment, Must be incapable of work as a result of a prescribed disease. How is the benefit computed? The daily rate is 90% of the insured person’s average insurable weekly earnings divided by 6

PENSION REFORM Increase in NIS contribution rates by 1% each year, for 4 years. Increase pensionable age by 6 months every 4 years starting Jan 01, 2006 until age 67 is reached in 2018. Introduction of flexible NIS Retirement ages so that persons may retire on an NIS pension at any age from 60 to 70. (0.5% reduction/increase applies for early/late retirement respectively)

PENSION REFORM Early Pension Standard Pensionable Age Year Age 64 63 Time Line Pensionable Age Up to Dec 2005 65 years Jan 2006 to Dec 2009 65 ½ Jan 2010 to Dec 2013 66 Jan 2014 to Dec 2017 66 ½ From Jan 2018 67 Year Age 2003 64 2004 63 2005 62 2006 61 2007 60 Presently Old Age Contributory Pension may be claimed as early as age 60 or as late as 70, with a 0.5% per month reduction/increase for early/late retirement respectively.

PENSION REFORM Pension Formula: 2 % Average Annual Insurable Earnings for first 20 years Plus 1.25% AAIE for years thereafter subject to maximum of 60% As of Dec 31 2002 More than 10 years to retirement - no change Between 10 years to 20 years -50% old basis -50% new basis More than 20 years -new basis The last actuarial review concluded that benefit costs of the NIS pension scheme will increase substantially in future years due to the projected changes in the age distribution of the Barbados population. Significant reform is therefore needed. The review showed that a relatively large group of persons born between 1950 -1955 and 1970 - 1975 will be entering their retirement years about 15 years from 2001. In addition, mortality has been improving so that a greater proportion of persons are surviving to reach retirement age and are living in retirement for longer periods than was the case before.

LONG TERM BENEFITS PAYABLE RECIPROCAL PENSIONS INVALIDITY PENSION / GRANT DISABLEMENT PENSION / GRANT OLD AGE CONTRIBUTORY PENSION / GRANT NON-CONTRIBUTORY OLD AGE PENSION SURVIVORS’ PENSION / GRANT FUNERAL GRANT DEATH BENEFIT

RECIPROCAL PENSIONS If you do not qualify for a pension under the National Insurance regulations, the periods of contributions in both countries are combined. Each country then calculates the amount of pension it would have paid if the total combined contributions had been paid under its own Scheme.

RECIPROCAL PENSIONS There is a Social Agreement between: There are: Barbados & United Kingdom, Canada, Quebec and some Caricom states. There are: Antigua and Barbuda , The Bahamas Barbados, Belize Dominica, Grenada Guyana ,Jamaica Montserrat, St. Kitts and Nevis Saint Lucia, St. Vincent and The Grenadines, and Trinidad and Tobago. The Agreement is not in effect in Suriname and Haiti.

CALCULATION The minimum pension is $175.00 per week. Requirement is at least 500 contributions in order to qualify for an OACP. If in Barbados you have only made 300 contributions and in Trinidad and Tobago, where you made 200 contributions. The portion of the pension to which you are entitled in Barbados will therefore be calculated based on your contribution to the Barbados Scheme: 300/500 x $175.00 = $105.00

INVALIDITY PENSION For N.I.S purposes the term “invalid” means a person incapable of work, as a result of a specific disease or bodily or mental disablement, which is likely to remain permanent. An insured person who is under pensionable age is entitled to an invalidity pension as long as the invalidity continues.

INVALIDITY PENSION To qualify for an Invalidity Pension must have at least 150 contributions paid. The pension is 40% of avg. annual insurable earnings over the best 3 years, plus 1% of total insurable earnings after 150 contributions. To qualify for Invalidity Grant must have at least 50 contributions paid or credited . This is paid as a lump sum. It is equal to 6 weeks avg. insurable weekly earnings for each 50 contributions paid.

CALCULATION Best 3 years: 2008 - 52 weeks - $28,800 2009 – 52 weeks - $29,600 2011 – 52 weeks - $30,400 Total - $88,800 Average annual insurable earning $88, 800/3 - $29,600 40% of the Avg. Ins. Earnings 0.4*$29,600 - $11,800 Total earnings after 150 contributions $145,500*0.01 - $1, 455 Total weekly pension is $11800+$1,455.00/52 weeks - $255.67 This amount should not exceed the maximum, which is 60% of the average insurable earnings.) e.g. 60% of Avg. Ins. Earnings 0.60* $29,600 - $17,760 Weekly pension $17, 760/52 - $341.54 Since $255.67 is less than $341.54 the weekly rate will be $255.67.

DISABLEMENT PENSION An insured person is entitled to a disablement benefit if he suffers from the loss of physical or mental faculty, as a result of an employment related accident . Conditions-: The disablement must be assessed at, at least 1 %. 1 – 29 % assessment is paid as a grant. More than 30% assessment is paid as a pension. Benefit is payable from the 3rd day following 52 weeks after the date of accident. The assessment must be conducted by a certified medical practitioner

DISABLEMENT PENSION The benefit is calculated on the Injury Benefit rate The benefit is duplicated with all other benefits except Invalidity benefit The pension may be payable for life (if assessment is final and greater than 30%) The claimant may continue to work while in receipt of a disablement benefit.

OLD AGE CONTRIBUTORY PENSION This pension is based on the insured earnings of the individual, on which contributions were made to the NIS. Early pensionable age ( 60 to 65 years) Pensionable age 66 years Late pensionable age (67 to 70 years) This is a pension payable to an eligible person upon attainment either

CALCULATION An insured person contributed to NIS for 1,850 weeks. His best earnings were in the last 5 years, the annual average of which was $30,000. His aggregate earnings after the first 500 were $550,800. To compute their pension: Basic pension: $30,000 x 40% = $12,000 Supplementary $550,800 x 1% = $5,508 Annual pension $12,000 + $5,508 $17,508 Weekly pension $17,508/52 $336.69

OLD AGE CONTRIBUTORY PENSION There are three bases for calculating NIS pension which is dependent on the year you reached retirement age. Persons 56 years or over at December 31, 2002 may use the old basis of calculation. Person under 47 years in December 31, 2002 will use the new basis. All other pensions will be calculated using the 50% new plus 50% old basis also known as the 50/50 basis. NOTE: Under NIS rules 50 weeks equals one year

OLD AGE CONTRIBUTORY PENSION (56 on December 31, 2002) OLD BASIS 40% of Average Annual Insurable Earnings (AAIE) Plus 1% of Total Insurable Earnings after the first 500 150 contributions paid and 500 contributions paid or credited. Subject to a maximum pension of 60% of AAIE and a minimum of $175 per week. The AAIE is based on best 5 calendar years

OLD AGE CONTRIBUTORY PENSION NEW BASIS 2% for ever 50 contributions per year of Average Annual Insurable Earnings (AAIE) for the first 1000 years Plus 1 1/4% for every 50 contributions of the remaining years

Persons <47 on 31 Dec 2002 Annual average over the best five years 2% for each year for first 1000 years and 11/4% for all subsequent years 1850 weeks = 37 years 20 x 2% x $37,416 = $14,966.40 17 x 11/4% x $37,416 = $7,950.90 $14,966.40+$7,950.90=$22,917.30 Annual pension capped at 60% = $22,449.60

OLD AGE CONTRIBUTORY PENSION 50/50 BASIS ½ of the old basis plus ½ of the new basis ½ of $336.69 + ½ of $336.69 = $336.70

OLD AGE CONTRIBUTORY GRANT This is a lump sum payment to an individual who falls short of the contribution requirements for an OACP. To qualify the individual must have attained pensionable age and must have at least 50 contributions paid and less than 500 (paid and credited).

NON-CONTRIBUTORY OLD AGE PENSION Eligibility: Must be a citizen or permanent resident of Barbados. The claimant may be blind or deaf-mute 18 years or older Not paid to persons in receipt of a Gov’t or Social Security Pension that is higher The pension payable is $142.00 per week This is payable to eligible persons who have not contributed or have not met the qualifying conditions for old age contributory pensions. This pension is not automatic.

SURVIVORS’ PENSION This pension is paid to the surviving spouse and/or children of the deceased who was in receipt of or would have been entitled to an Invalidity Pension or Old Age Contributory Pension. The deceased must have had at least 150 contributions paid.

SURVIVORS’ PENSION Spouse’s Benefit Spouse 50 years or over and married for at least 3 years is entitled to 1/2 of Pension payable for life but ceases upon remarriage or co-habitation Spouse 45 to 49 and married for at least 3 years is entitled to 1/3 of pension payable for life but ceases upon remarriage or co-habitation Where the spouse qualify for a pension in their own right that is higher than the survivors’ pension, the other pension is paid. Spouse under 45 and married for at least 3 years is entitled to ½ of pension payable for one year only. In any event if married for less than 3 years the pension payable is ½ of pension for 1 year only.

SURVIVORS’ PENSION Children’s Benefit Eligibility: Each child is entitled to 1/6 of the benefit up to age 16 or age 25 if in full time education. An Orphan is entitled to 1/3 of the benefit An Invalid child is entitled to 1/3 of the benefit for life. An eligible child is any child, step child , or adopted child who was maintained by deceased.

SURVIVORS’ GRANT The deceased must have had at least 50 contributions paid but less than 150 contributions The grant is apportioned in the same way as the survivors pension This benefit is a lump sum payment made to the surviving spouse and/or children of the deceased who would have been entitled to an Invalidity grant or Old Age Contributory grant.

DEATH BENEFIT This is paid in the case of a death, due to employment injury The benefit is paid to the dependants of the deceased spouse – wholly or mainly maintained by deceased at the time of death is entitled to ½ the benefit for life but ceases upon remarriage or co-habitation. In event of remarriage or co-habitation a gratuity of 1 years’ pension is payable Each child is entitled to 1/6 of the benefit up to age 16 or age 25, if in full time education. An orphan is entitled to 1/3 of the benefit An invalid child is entitled to 1/3 of the benefit for life. Other dependant are paid 1/6 of the pension for 1 year

FUNERAL GRANT A Funeral Grant is payable in respect of the death of an insured person who at the time of death was in receipt of (or had entitlement to) Sickness, Maternity, Unemployment, Invalidity or Old Age Contributory benefits. Payable to the person who has met ,or is likely to meet the cost of the funeral Note: an undrawn Benefit is also paid after the death of the insured person to the spouse or executor of the affairs of the person.

FUNERAL GRANT A Funeral Grant is also payable in respect of the death of the spouse of an insured person in respect of whom a grant would have been payable whether or not the spouse had predeceased the insured person. Lump Sum - $1,950.00

NATIONAL INSURANCE ? THANK YOU ANY QUESTIONS??? Website – www.nis.gov.bb ?