Dana Malcolm
Staff Writer
#TurksandCaicos, April 4, 2024 – The final increase in a staggered three-part hike on National Insurance Board contributions has officially been instituted as of April 1 2024 which means higher fees for workers across the country, but higher payouts as well.
The current fees mandate that private sector workers will pay 12 percent; employers pay 6.5 percent and their employees 5.5 percent. Public sector employers will pay 11.15 percent; 6.075 percent from TCIG and 5.075 percent out of pocket. Finally, Self-employed persons will pay 10 percent.
In 2023, the second year of the increase, taxes were as follows: 11 percent at the private sector. Public sector rates were increased to 10.15 percent and 9 percent for self-employed individuals.
Before that, In 2022 when the increases were instituted, taxes were 10 percent at the private sector, 9.15 percent at the public sector and for self-employed individuals the rate moved to 8 percent of taxable income.
This three-part boost puts NIB contributions into the range needed to fund the plan without dipping into its reserves, which is in the tens of millions of dollars. That was the point of the increase, the NIB had said that since its inception in the 90s, collection rates had stayed the same but payouts had increased.
A 2019 actuarial review, which recommended the hike, had warned that without the extra cash, by 2027 the NIB would have to start dipping into its reserves to make payments. This was deemed unsustainable because reserve funds are to be used in periods of economic downturn so that those depending on their NIB payments can still benefit.
Thus the rate hikes were granted, with collections beginning in 2022.
That same year, another review was done, as is mandatory every three years. It found that residents needed more money to get by, resulting in across the board increases in payments from January 1st 2022 onward.
Areas that saw payment boosts included Minimum Pensions; Non-Contributory Old Age Pension (NCOAP); Maternity Grants; Funeral Grants; Death Grants; and NIB weekly allowance. Pensions in particular saw additions of up to 13 percent.
Even with higher payouts, the agency is projected to easily stay afloat.
NIB executives during a meeting of the Appropriations Committee on May 2nd, 2023 had revealed that the projected income for the fiscal year 23/24 was $63 million with a projected surplus of $31 million.