Private sector entities and self-employed individuals owe the National Insurance Fund in excess of $300 million, and Minister of Labour Dr Esther Byer-Suckoo is urging the defaulters to pay up.
She said while Government was in the process of implementing another waiver on interest programme to encourage those who owe to clear their debt, her ministry was also exploring the possibility of giving the National Insurance Scheme (NIS) more teeth to go after those who refuse to meet their obligations to the fund.
Byer-Suckoo made the disclosure today during a news conference to release the findings and recommendations contained in the 15th actuarial review of the fund.
Together, Government and the private sector owe the NIS approximately $650 million.
“Persons who owe the National Insurance need to come and address those arrears. The Government of Barbados is in discussion with the National Insurance as to how they can do this,” the minister said.
“From our end, we are trying to ensure that the National Insurance is empowered legislatively and with the administrative support it needs to be able to go after those agencies and individuals that owe the National Insurance to ensure that we can collect on those monies.”
Pointing to the success of the last interest waiver programme which saw the NIS collecting $11.9 million from about 147 employers, and waiving $7.8 million in interest between October 2016 and March 2017, Byer-Suckoo said another one was being contemplated for this year.
This, she said, was expected to be approved by Parliament when it convenes later this month.
“We are encouraging persons who are in arrears to take advantage of this waiver programme because, as we see, that contribution is very necessary to the sustainability of the National Insurance,” Byer-Suckoo said, adding that self-employed individuals were not willingly coming forward to pay their contributions yet were expecting benefits.
It is estimated that only between 20 and 25 per cent of self-employed individuals make NIS contributions.
Byer-Suckoo said besides the interest waiver and legislative changes, the NIS was also looking at various “arrangements and packages” to encourage self-employed individuals to make payments.
These, she said, included offering online payment options, flexibility in payment schedules, the option of lump sum payments, and the possibility of self-employed individuals paying only “for what they need.
“They may not need to have sickness benefit, for example. So, they can pay for a package of what they need. All of these are being explored at this moment . . . . While the fund is not currently experiencing a cash flow challenge, a proactive move would be to ensure that we do all of these things so we don’t have these challenges in the future. So I urge the private sector and the public sector to make their contributions on time and also to come in to the National Insurance to deal with any arrears,” she pleaded.
NIS Director Ian Carrington said he expected a new interest waiver to produce similar results to that which was achieved the last time round, adding that most of those coming forward at that time were small businesses.
In relation to what public sector entities owe the NIS, Minister of Finance Chris Sinckler had announced that Government was in the process of embarking on a swap programme with the fund to offer Government paper for the equivalent of the close to $300 million it owes through statutory corporations.