NIB contribution changes now in effect
The National Insurance Board(NIB)is hoping to increase its contributions and exceed the$167 million figure posted in 2010, with Director Algernon Cargill saying the fee changes in insurable wage ceilings will provide benefits for both the board and Bahamians.
Cargill toldGuardian Businessthat despite mixed reactions about the increase in fees, it will ultimately reap benefits for Bahamians in the long run.
“While Bahamians are paying more in their NIB fees, it’s equally important to focus on the fact that they are getting additional benefits,”Cargill said.”At the end of the day they will receive more when they claim.”
The modified insurable wage ceilings, which came into effect on January 1, has increased from$400 to$500 per week and$1,733 to$2,167 per month. NIB will receive$39.20 from businesses that have employees making$400 a week,$44.10 from those making$450, and$49 from those making$500.
NIB will make a combined$169.83 from employees and employers who are being paid$1,733 monthly,$196 from those making$2,000 and$212.37 from persons making more than$2,167. The deductions will be reflected in the first pay period of this month.
While most businesses and their employees will be feeling the effects of the increased wage ceiling, President of Superwash Dionisio D’Aguilar toldGuardian Businessthat it will work out to the benefit of workers.
“It doesn’t affect a great number of my staff because there are a number of people that make less than$400 per week, it’s fine to have a ceiling since we don’t have to pay an income tax,”D’Aguilar said, who is also the former president of the Bahamas Chamber of Commerce.”Some sort of forced savings is good as well.”
However, D’Aguilar also said one of his concerns with NIB is how often it requests increases. He suggested an oversight body should be established to monitor the expenses of the agency. Projections were made last July that the National insurance Fund would be depleted in 20 years if no action was taken, thus prompting the government to raise the contributions of civil servants by at least 50 percent and increasing the wage ceiling to$600 by 2012.
Prime Minister Hubert Ingraham said at the time that 74 percent of government workers make at least$400 a week and 15,000 people employed by government would be affected by the wage ceiling rise.
President of the Bahamas Chamber of Commerce Khaalis Rolle toldGuardian Businessrecently that the fees will not necessarily work in favor of businesses, especially the ones trying to stay afloat.
“You have to understand that the more taxes you pile on businesses you make it harder for them to survive,”Rolle said.
But Cargill said that Bahamian operations have sufficient time to adjust to the NIB changes.
“We gave the public more than enough notice and they should be well prepared for the changes,”he said.
After July 2012, the ceiling would be adjusted every two years in the month of July. The size of each increase would be determined by using The Bahamas Retail Price Index plus two percent.