Government is assuring Barbadians there is no crisis in the Unemployment Fund, even though it has admitted that higher than desirable joblessness has put it under financial pressure.
A day after reports surfaced that the Fund was in serious trouble, Minister of Finance Chris Sinckler told Barbados TODAY that the Government and the National Insurance Board (NIB) have agreed on a temporary and mid-term solution to ease the payment pressures of the Fund and are executing that plan.
While he did not give details, sources close to the NIB told Barbados TODAY that Government plans to inject $12 milion over the next year to aid the fund which has reached as low as $6 million to $7 million.
Additionally, the National Insurance Scheme has reached agreement with the Barbados Employers’ Confederation that money from the Severance Fund would be diverted to the Unemployment Fund. However, that would first require parliamentary approval.
“There is, therefore, no crisis at the Fund as is being touted,” Sinckler insisted, noting that Government has been in constant contact with the NIB on the matter through the Minister of Social Security and senior officials of the Ministry of Finance.
“All parties have been working on a solution to the existing pressures by examining all of the options available to the Fund Manager, including a direct injection from Government to ensure the continuation of payments to recipients as provided for in the laws of Barbados.”
He added that the financial pressures on the Fund were neither new nor insurmountable.
“Government is, and has been fully aware, that as is normal during periods of higher than desirable unemployment in the country, the [Fund] normally experiences pressures of keeping pace with claims if the unemployment situation persists,” the minister pointed out.
Yesterday, Opposition Leader Mia Mottley said her Barbados Labour Party was ready to do all that was necessary and legal to help replenish the Fund, which she claimed would not have any money to pay out by the end of this month.
“Regrettably, this Government has continued its habit of carrying institutions to crisis levels before acting,” Mottley suggested.
She said that in October, and then again at the end of November last year, she warned the country that the Fund was in peril.
“The Government has known about this crisis for months and that this situation had to be resolved as a matter of urgency before 2015, especially if confidence is to be maintained in the NIB and our social security scheme,” she argued.
But Minister Sinckler today accused the BLP of not supporting suggested changes to the Fund’s rules, to ensure its future viability, when it faced similar financial pressures in the early 1990s.
“These changes were vehemently opposed by some in the country, including the then Barbados Labour Party which incidentally did not reverse any of the adjustments on attaining office and being there for 15 years,” the Minister of Finance said.