In a move to add millions of dollars
annually to the Social Security Fund, The Social Security Board is
considering implementing a rate increase that will affect employees and
employers alike. Under the existing plan an employee earning $110 per
week or more is required to pay $1.30, with the employer contributing six
times that amount per employee for a total of $7.80, giving a grand total
paid to Social Security of $9.10.
At a sitting of the House of Representatives in
Belmopan, on May
19th, Hon. Ralph
Fonseca read a statement, which in part said "So far after much work with
the best actuaries available, the experts have determined that the
consultation with Belizeans should commence with a system expanded to
insure up to $320 per week. The existing proposal suggests contributions
for all stay as they are, up to $130 per week earnings. That is, for
every 6% paid by the employer, the employee would pay 1% on three
existing scales. Thereafter and up to $320 per week the employer would
pay 3.5% and the employee 3.5% on five new scales. An employee then
earning $130 per week would continue to pay $1.30 and the employer $7.80
per week. For the employee with insurable earnings of say $200 per week,
he or she would still pay 1% or $1.30 for the first $130 in earnings plus
on the remaining $70, 3.5% or $2.45 for a total of $3.75 per week. The
employer will pay the same 6% or $7.80 on the first $130 in earnings plus
on the remaining $70, 3.5% or $2.45 for a total of $10.25 per week."
According to Minister Fonseca since the inception of Social Security in
1981 the schedule of contributions has not been updated to reflect
changes in the level of earnings of the insured population. Minister
Fonseca further states that in the last actuarial valuation, it was
estimated that three out of every four insured persons were in a wage
class over the present $130 per week ceiling.
If the new rate is implemented, the
government will use the extra money to cover increased benefits and not
to accumulate additional savings in the fund. Some of the increased
benefits proposed are: 1) Increase the present minimum pension from
$1,820 to $2,444 per annum; 2) Increase the present maximum pension from
$4,056 to $9,984 per annum; 3) Increase the retirement grant from $400 to
$800, 4) Increase the invalidity grant from $400 to $800; 5) Increase the
survivors grant from $400 to $800; 6) Increase the minimum sickness
benefits from $20 to $44 per week and the maximum from $104 to $256 per
week; 7) Increase pay sickness benefits from the fourth day of incapacity
including public holidays, disregarding Sundays now proposed, by paying
the third day including public holidays
and Sundays; and pay from day one if
period of incapacity is not less than fourteen consecutive days; 8)
Increase injury benefits from a minimum of $20 to $44 per week, and the
maximum from $104 to $256 per week; 9) Increase pay injury benefit from
the fourth day of incapacity, including holidays, disregarding Sundays
now proposed, by paying from the third day including public holidays
and Sundays; and pay from day one if the
period of incapacity is not less than fourteen consecutive days; 10)
Increase provision for payment of injury benefits for job related
injuries arising out of and during the course of insurable employment now
proposed, by paying for injury benefits including those occurring at home
as well as to and from work; 11) Increase maternity allowance from a
minimum of $20 to $44 week and the maximum from $104 to $256 per week and
12) Increase maternity grants from $100 to $300 per child.
Businesses and employees contacted about
their opinion of the new rate hike expressed concern about the new rate
structure. Employees stated that it was already hard enough to stretch
their paychecks from week to week to make ends meet. Employers' concerns
are that they already pay large amounts to the Board giving six cents for
every one cent contributed by employees. Several have expressed that
their already struggling businesses will not be able to absorb the extra
cost. They feel the extra money they may be required to pay, added to
what they are expected to contribute to the new National Health
Insurance, will make it difficult to keep their businesses operating.
Others have also stated that if this happens it will force them to lay
off or reduce staff to part-time workers. Some employers see their only
option as cutting services or amenities offered which they feel will
negatively impact tourism on the island.
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