By EARYEL BOWLEG
Tribune Staff Reporter
MONEY owed by delinquent businesses will not save the National Insurance Board fund, Minister of State with responsibility for NIB Myles Laroda said yesterday, adding that many companies that are behind on contributions are small businesses.
He told reporters there is a “misconception” that many businesses that owe NIB money are mega companies.
“The reality is the board has been placing individuals before the courts for many years and those affected most are those who are mostly delinquent, small businesses or individuals who have people in their employ. It isn’t the megastructures,” he stated.
He said NIB has seen revenue increase recently, but added that its payouts to pensioners and other people collecting benefits still cannot be sustained without a contribution increase.
“Over the past year plus, we’ve seen revenue increases. The board is budgeted to collect some $300m in revenue. The problem ain’t, and I keep on stressing this, the problem is we have 43,000 people collecting National Insurance benefits. The contribution rate now just cannot adequately address that.
“We have millions and millions and millions of dollars off per month. The National Insurance Board is not subsidised by The Bahamas government, it will be able to sustain itself on contributions, investments, or rentals.”
He also said: “We’ve had one rate increase going on 50 years. It’s just not sustainable and some of the things are not attributed to anybody being wrong. Are we going to say that we don’t want our pensioners to live longer? No.
“Now, some of these things just are not controlled or within the control of the government. So to those who say, well if we collect this amount of money here all leakage that is plugged... but we are just at this point and I invite the public, don’t just listen to me go and read the report.
“It’s there for the public to see and you will see what has been said over the past decades as it relates to the fund and the income that’s been taken in and monies that have been paid out.”
NIB’s board has recommended several increases to bolster the social security safety net.
“Well, the recommendation that was made by the board and the recommendation that was made for in the report is for multiple increases every two years,” he expressed.
“Because like I said, one increase is not going to save the fund and I don’t want to appear to be cold, but that is just the reality of the hands that we have been dealt.
“And so if the fund is going to be there for the next 50 years then measures are going to have to be put in place. I don’t think there’ll be any appetite in this country now to cut the benefits that are paid to our pensioners.
“A lot of them that is the only source of income that they may have. And so we’re gonna have to find, you know, other ways to keep the fund going. And the one mechanism that the board has. . .that would be to increase the rates over the next few years.”
The Tribune exclusively reported in April 2022 an actuarial review of the National Insurance Board predicted that the fund could be depleted by 2028 should officials neglect to take urgent action.
Last month, The Nassau Guardian reported that Cabinet had greenlit a rate increase which is believed to take effect July 1, however government officials have not confirmed this.
Mr Laroda has previously said details will be forthcoming at a later date.
Sickened 2 months, 2 weeks ago
Why isn't there ever any discussion about creating additional tiers so that the wealthier people contribute more?
Flyingfish 2 months, 2 weeks ago
That would be income tax which is a tax system we don't use unfortunately. Additionally, its uncommon to collect income tax on National Insurance.
Countries tend to have different/higher rates for Business taxes, property taxes, or by having a wealth tax. I've never seen it be placed on national insurance So they could follow your suggestion however, it would just make more sense at that point to switch from sales taxes (VAT) to income taxes on the whole.
Sickened 2 months, 2 weeks ago
But NIB is a 2 tiered system now - granted the lower tier is well below our minimum wage. They just need to add another 1 or 2 tiers.
moncurcool 2 months, 2 weeks ago
I'm wondering why they don't have a discussion about decreasing the expenses and the slush fund use of NIB by governments for these projects that give no return.
stillwaters 2 months, 2 weeks ago
A big part of it is that the Baby Boomers are all retiring and since they were the most prolific and consistent contributors....most since NIB's inception.... a deficiency is inevitable.
DEDDIE 2 months, 2 weeks ago
NIB would have been viable if governments would stop using it as a go-to fund. The more NIB collects the more the government takes. No amount of money will help NIB if it is constantly been used to fund hospitals and clinics.
Commenting has been disabled for this item.