There are individuals who pass ownership of their homes or apartments to their children in an effort to qualify for National Insurance Assistance, said Mr. Derek Osborne, Thursday.
Mr. Osborne, who presented the 7th Actuarial Review of The National Insurance Fund at the British Colonial Hilton, said the National Insurance Board looks at the total income of all individuals seeking benefit assistance before a determination to grant any assistance is made.
“We also have situations where many people have worked and have dodged NIB for 29 years and this is going to stop. If you worked, and know you have worked, but have failed to contribute, we are going to deny you the assistance,” he warned, adding that many people also failed a properly administered means test.
According to Mr. Osborne, if a person’s portion of household income is less than $241 a week, then they are disqualified from getting assistance. He said a person who qualifies for a contributing pension is entitled to pay the minimum of $205 a month, while the benefit assistance paid out is $200 a month. He added however, that this is only a $5 difference.
“We have many, especially the self-employed, who say why contribute, as I can get $200 a month for free, but individuals should keep in mind that ‘assistance’ must mean that a person is in need.” He said the NIB pension scheme is not growing and there are at least 100 persons qualifying every year for old age pension. “We must assure that a proper assessment is made and only those who are truly in need qualify,” he said.
With respect to the contributions of civil servants, Mr. Osborne said there needs to be a review of the provisions, in addition to having long term projections performed, so they can see the true long term costs that NIB is promising civil servants. “The bill is rising every year and I am not sure if they really realize what is going to happen 50 years from now,” he said.
Since 1984, pensionable civil servants pay a different rate than non-pensionable civil servants, it was determined that if civil servants were pensionable and had the same insurable wage, their combined national insurance pension and the civil service pension would take them over their earnings.
“We wanted to ensure that civil servants could not take home more retirement benefits together than when they were sick, rather than when they were working. Therefore it still remains at $110 per week today,” he said.
According to Mr. Osborne, Civil Servants get full pay when they are sick or on maternity leave and claim national insurance. He noted that they are better off sick, than when they are working and therefore tend to be sick more often than anybody else. He mentioned that from numbers, the civil servant quota contribution income is about 18.5 per cent of what NIB collects and 27 per cent of all short term benefits is paid to civil servants. He said that is more than their fair share of what they have contributed.
Meanwhile, Mr. Osborne suggested that in an effort to sustain the NIB fund for upcoming years, income can either increase or expenditure can be reduced. Revenue, he said, can be increased through raising the rates of contributions, or by expanding the earnings base.
The NIB Actuary also said the NIB scheme needs to be modernized and it has to make current and future benefits adequate, equitable and affordable, in addition to reducing long-term costs. He recommended increasing the ceiling on insurable wages with subsequent increases occurring annually in line with wage increases and the rules governing such adjustments to be placed in Regulations.
By Tamara McKenzie, The Nassau Guardian
