AmbergrisCaye.com Home Forums Belize Life Living in Belize Social Security Board Will Increase Contributions By 1%

Since mid 2019, Social Security's rate of contributions for both workers and employers has been steadily increasing. This is a plan dubbed "Contribution Reform: to bring the rate of maximum insurable earnings up to $520 in three years - after it had been stuck at $320 for two decades.

Much needed modernization - but it comes at a cost to contributors - the bottom line of your paycheck and your boss's payroll. And, both parties got a break in 2020, when - with the economy in the grips of COVID, government suspended the increase slated for January.

But, the break is over, and now, Cabinet has given Social Security the green light to resume with the final 1% increase in the rate of SSB's contributions.

That will increase the total contribution to 10% of insurable earnings - a total of $52.00 - 28.60 from employers and 23.560 from employees, for all those making $500.00 or more per week.

But, there's been no public announcement, and no public sensitization, just letters quietly sent to employee and labour representatives.

The NTUCB got one of those letters last week Tuesday - and today, via Zoom, we asked President Luke Martinez for his reaction. He said more consultation was necessary:

Luke Martinez, President, NTUCB
"We would have expected that look, you have one, we were going to do this third one, but expected that by now you have your documents together and you would have consulted with the Belizean people, not only the unions, the Belizean people and so the consultation is important, reporting is important."

Jules Vasquez
"In that letter it refers to consultations that you all were a part of."

Luke Martinez, President, NTUCB
"I don't know who scribe that letter, Jules. I don't know if it was written to cause for people to believe as if though the national trade union congress was in consultation recently with social security. If that's the intention then its farthest from the truth."

Jules Vasquez
"What strikes me is the lack of sensitization. We knew it was delayed and we knew it could not have been delayed indefinitely, but circumstances have materially changed since these increase contributions were implemented and since those consultations were changed, because you all, a lot of your membership of the public service union and the teachers union, they are now making 10% less. How do you all feel about this 1% additional?"

Luke Martinez, President, NTUCB
"Public officers who can't afford to handle their disposable income will not be able to afford 1% increase. So you are right. Sensitization is very important, its very key. A lot has changed, and so it is important, I implore upon the management of social security to reach out to the Belizean people, reach out to the unions, reach out to stakeholders and lets have this discussion."

Jules Vasquez
"A lot of your members have been hit hard by the deduction in salaries and the reduced earnings. How much will this additional pain affect them?"

Luke Martinez, President, NTUCB
"The level of strain, you can't compare the level of strain, because remember that the working class in this country including the people who work for channel 7 and the people who work in the informal sector, the working class in this country are the marginalized people and so when we lose any percentage of our income, it affects us. It affects us mentally, affects us socially and of course the economic part of it."

"You know how many of them cannot pay their passage to and from work? You know how many people are working - lets got to the wider workforce, they are at work, they don't know what their children had for lunch this afternoon. Thats the reality."

According to the letter, the new rate of contribution goes into effect on January third, 2022.

Channel 7

PM Says Social Security Contributions Increase Inevitable

Last week, we told you that Cabinet has given the greenlight to the Social Security Board to resume with the final 1% increase in the rate of SSB's contributions.

That's after Government chose to defer the increase in contributions last year. That means that, come next month, your SSB contributions will increase to a total contribution to 10% of the $520.00 ceiling on insurable earnings - that's a total of $52.00 - 28.60 from employers and 23.40 from employees, for all those making $500.00 or more per week.

And with public officers already on a 10% cut, and everybody feeling the pinch from the COVID economic crunch, you might be wary of even less money in your wallet. But the PM says it's either 1% now, or a whole lot more later.

Hon. John Briceno, Prime Minister
"First of all, this decision was made way before we came into government, Social Security went through extensive consultations countrywide so it is only after consultations were made that the government of the day passed legislation to increase social security contributions. Last year, when we just got into government, we realized we were in a crisis in this country, we still are, but it was very bad so we decided to defer it for one year, so everyone knew it was coming one year from now, hoping to give a little settle for businesses in particular, more the businesses than the employees because it's an investment in your future when you pay monies into Social Security and we've been raising the bands from which you can insure your earnings and retirement that now it will help the very same public officers that are earning above $300 so that now they are going to be having a larger portion of their salaries insured so when they retire, they can get more in return. So it's just a continuation, something that had to be done. If we don't do it now, if don't do that 1% increase, the numbers have shown by the actuary of Social Security that by 2024, the fund will be in equilibrium, meaning that every dollar we're collecting we're paying out a dollar and that would mean we have to increase the contributions more than 1% so it's best we do it now to give the fund a chance to build up, so that's all we're doing."

Channel 7

Social Security Board Announces Approval of the 2022 Contribution Rate Increase

The Social Security Board hereby informs of the approval by the Cabinet for the final increase of the Contribution Rate of 1% effective January 3, 2022.

As part of the 2019 Contribution Reform, the increase of Contribution Rate from 9% to 10% and Wage Ceiling from $480 to $520, previously slated for implementation in 2021, was temporarily deferred. The Wage Ceiling increase to $520 weekly translates to higher weekly cash benefits in the sum of $416 for short term benefits and $312 for pensions. This final phase of increase aims to strengthen and expand the adequacy of future benefits paid to employees.

The Social Security Board renews its commitment in delivering a financially suitable program that will continue to provide lifetime coverage to you, our beneficiaries.

Stay connected with Social Security for further updates by visiting the SSB website or Facebook page.

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Social Security Breaks The Bad News

For the past week we've been reporting on the plan to increase social security contributions next year. It is part of an ongoing contribution reform - whose implementation was delayed last year due to COVID.

But, it will resume this year - for the final 1% increase in the rate of SSB's contributions. But that comes at a cost to employees and employers - who were not forewarned or sensitized abut the change which goes into effect in January.

In fact, it was not formally announced until today - in a matter of fact release from the Social security Board. The release simply says that Cabinet has approved the increase and it comes into effect on January third, 2022. It adds, quote "this final phase of increase aims to strengthen and expand the adequacy of future benefits paid to employees" end quote. So what's the bottom line of your paycheck and your boss's payroll? The total contribution will increase to 10% of insurable earnings - a total of $52.00 - 28.60 from employers and 23.40 from employees, for all those making $500.00 or more per week.

The Chamber of Commerce says it considered the increase and has taken a position which will be communicated in writing.

Channel 7

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Social Security Contributions Going Up in 2022

Social Security contributions will increase in 2022, by one percentage point from nine to ten percent. But the wage ceiling is also going up four hundred and eighty dollars to five hundred and twenty. According to the Social Security Board, these increases were deferred in 2019, but have been approved by Cabinet now. S.S.B. says the increase in the wage ceiling translates to higher weekly cash benefits for both short term benefits and pensions. The changes come into effect on January third, 2022 and were originally part of the 2019 Contribution Reform plan.

Channel 5