Charging that some of the country’s most vulnerable citizens, pensioners, are now simply “existing” thanks to the National Social Responsibility Levy (NSRL), the Barbados Association of Retired Persons (BARP) is pleading with Government to give its members an ease from the dreaded tax.
BARP President Edward Bushell told Barbados TODAY that three-and-a-half months after its implementation, pensioners were finding it increasingly difficult to keep up with the rising cost of living forced upon them by the levy.
Bushell said with prices already high even before the NSRL climbed from two per cent to ten per cent of the customs value of imported and locally produced goods, and with the economy “going downhill”, BARP had been doing all it could to help its 40,000 members cope.
However, he said the levy, along with other tax measures announced in the Budget in May, made it “tougher and tougher” for pensioners to survive.
“They are coping. That is the best word, but coping doesn’t mean they are having a good time. It means that they are existing and things are getting tougher and tougher. The cost of living is always going up and as a result of the NSRL the cost of living has gone up again. And according to all the wise men we hear in Barbados it is going to be worse next year. You can plan as best as you can but if you don’t have the resources to plan with it can be difficult,” Bushell explained.
The organization, which advocates on behalf of Barbadians over the age of 50, said as much to Minister of Finance Chris Sinckler at a meeting about three weeks ago.
Bushell did not disclose details of the talks, but told Barbados TODAY the minister seemed receptive.
“We did meet with the minister regarding the NSRL and we got the impression that we were favourably received. But we await the outcome of that meeting,” he said.
Sinckler had announced in his May 30 Budget presentation that effective July 1, the NSRL, which was introduced last September to fund health care and sanitation, including the purchase of garbage trucks for the Sanitation Service Authority, would rise from two per cent to ten per cent.
In addition, as part of a $542 million austerity package, Sinckler had announced a two per cent tax on all foreign exchange transactions and a hike in the duties on fuel.
Bushell’s comments come against the background of an announcement yesterday by the National Insurance Scheme (NIS) that effective January 1, 2018, the new pensionable age would be 67, up from the current 66-and-a-half years.
People who have reached the current pensionable age of 66-and-a-half, who have paid national insurance contributions and have not yet claimed their NIS pension were also advised to submit their applications for Old Age Contributory Pension before the end of this year.
Bushell said this news should come as no surprise since it was already made public several years ago that the change was coming.
However, he emphasized, what was more disconcerting was the impact of the NSRL on retired Barbadians.
“This should be no surprise to anyone. People should have been preparing for this a long time . . . but the problem is that the economy is going downhill at a fairly rapid pace. So things that you are doing now are being eliminated by the NSRL that caught everybody off guard.
“So whereas you might be getting savings for members by various methods and so on, that is being eliminated almost overnight by the NSRL. So it is a constant battle. It is just a constant battle all the time.”
As a result of pension reform which started 2003, the pensionable age has increased by six months every four years effective January 1, 2006, until it reaches 67 in January 2018, for un-reduced pension.
Other reforms included the introduction of a flexible retirement or pensionable age, making it possible for individuals to retire at any age between 60 and 70 years, and receive a reduced early pension from age 60.
The decisions were primarily taken due to changes in the demographics, including the fact that Barbadians are living longer and having fewer children.
During a news conference last month NIS Director Ian Carrington had said he was awaiting information from the Central Bank to decide if a recommendation should be made for an increase in pension come next year.
However, he said for such a decision to be taken it would have to be proven that it would not impact negatively on the fund.
Bushell told Barbados TODAY his organization would welcome any increase in pension as it would go a long way in helping retirees cope with the rising cost of living.
During last month’s news conference Minister of Labour Dr Esther Byer-Suckoo had also announced that while there were no immediate plans to increase contribution, it could not be ruled out in the future if the prevailing conditions did not improve.