A week after Minister of Finance Chris Sinckler assured Barbadians that the National Insurance Scheme (NIS) was safe, Minister of Labour Dr Esther Byer-Suckoo is raising doubt about its viability.
Speaking in the Senate Wednesday morning during debate on the National Insurance and Social Security Amendment Bill, Byer-Suckoo said the country’s ageing population and falling birth rate were posing a risk to the social security scheme.
“It’s not unique to Barbados; it is something that we’re seeing around the world, this phenomenon of an ageing population. Fewer people to put into the pool, more people taking out of the pool for longer periods,” the senator said.
The minister said while the situation was being addressed through pension reform, it would require further attention in the future, “because the situation is not getting any less intense”.
“There’s been talk about the fact that our birth rate is also down, so we know that in terms of the level of contributions, at the current rate, with fewer people, we’re not going to see [as much] . . . .This ageing population affects the social security needs, it affects our income and it affects our expenditure.”
In addition, the Government spokesman said, the level of youth unemployment presented a challenge to the programme.
“Not only are we an ageing population, but we have youth unemployment, so the young people who should be working and contributing to the scheme, are not being able to do this.
“This is a challenge around the world. In fact we are advised that 40 per cent of the world’s youth are unemployed,” Byer-Suckoo said.
It was just last week while speaking on the same bill in the Lower House that a fiery Sinckler, armed with documents to support his arguments, sought to debunk any notion that the fund was in danger of being depleted.
He said at the time the fund was raking in hundreds of millions of dollars in investment income and contributions each year, despite the hundreds of millions it was also paying out.
The total benefits paid out by the social security scheme reached $637.8 million at the end of 2016, up from the $49,227 when the fund started in 1967, and the $238.8 million reached in the year 2000, the minister said.
He also said investment income to the fund moved from $24,905 when it first started to $87 million by the year 2000, up to $289.6 million by the end of last year.
However, the Minister of Labour Wednesday said while expenditure costs had not risen significantly in the past five years, controlling expenses remained a challenge, as was managing the scheme’s investments.
“Right now in the climate locally, as well as globally, investments are not yielding as once they would have. Hopefully this is cyclical and we will see the time come once again when investments would actually yield a little bit more. But there is a challenge in terms of where do you invest; where is it safe to invest; where are you going to get the returns on the investment that you would like,” she noted.
The minister also spoke of “quite a backlog on processing of claims, especially the sickness claims.
“From time to time what would happen is the relevant department would just put other areas on hold and focus specifically on the claim that is backed up a lot whether it is sickness or whatever the area is, to try to clear up that backlog,” she stated.
She also pointed to the challenge of providing social security for self-employed individuals and those in the informal sector, as well as the need to revise the provisions for disabled.
“Right now if a person is deemed as being disabled, they get an amount and they’re expected not to work or else they lose that amount. We’re trying to include disabled persons and include more disabled persons in our workplaces. We’re passing legislation . . . to ensure that workplaces do not discriminate against persons with disability. So what that will mean is that we will have to adjust national insurance for persons with disability to be reintegrated into work, even if it is not for a full 40 hours to allow for them to come back into the workplace and maybe to supplement what they’re getting from national insurance and not risk losing it,” Byer-Suckoo stated.