A Government backbencher today lashed out at what he said was the “scandalous” practice by unscrupulous employers who deduct National Insurance Scheme (NIS) contributions from their workers but fail to pass on those funds.
As Democratic Labour Party (DLP) parliamentarians, led by Prime Minister Freundel Stuart, appealed to private sector employers and the self-employed to pay their contributions to the social security fund, it was Member of Parliament for St Michael West Central James Paul who was most strident in his criticism of the defaulters.
“Do you know that in some cases we have employers in this country that still deduct national insurances from people’s wages and still fail to pay them in? This is scandalous and ridiculous,” Paul said during debate on an amendment to the National Insurance and Social Security Act, which allows for the waiver of 100 per cent of the interest on arrears and contributions for the payment period of October 15, 2017 to January 15, 2018.
“You need to have a situation where people recognize that those deductions are like paying the light bill. The good thing about the light bill is that if you don’t pay it they will cut it off,” he added.
It is estimated that only between 20 and 25 per cent of self-employed Barbadians pay NIS contributions, a situation Stuart described as “dangerous”.
Warning that the days of automatic old-age pensions were long gone, Stuart said it was unfortunate that some people could not qualify for a pension after they retire because they did not contribute to the fund during their working years.
“I just want to appeal to these self-employed persons – coconut vendors, the ones who sell pig tails and so on by the side of the road and so many others, the hairdressers, cosmetologists and all these other people who do that kind of work, who are earning – I urge them to see the wisdom of contributing to the NIS.
“Artisans, people who use these lawnmowers and other implements they use to clean people’s lawns, these are all self-employed persons who earn but who do not contribute anything to the NIS and then when the time comes they expect that they would get an old age pension. We no longer have a noncontributory old-age pension as a matter of right. Those days have long past,” the Prime Minister said.
Stuart argued that “significant sums of money” were passing through the hands of self-employed individuals who found time to “spend it on everything else but making preparation for the time when they will no longer be able to work and would need a source of income to help them to meet their very basic needs”.
“So I would like to send that appeal out once again. I know it is a great concern, not only to the scheme itself but to agencies like the Welfare Department and other such Government agencies when these dejected persons come and have to appeal for some kind of contribution to help them to meet very basic needs. We can do better than this,” he stressed.
During his introduction of the amended legislation, Minister of Finance Chris Sinckler did not disclose how much was owed to the NIS in outstanding contributions, nor did he say how much was paid during the three-month amnesty period.
However, he told his parliamentary colleagues that because of the measure “the NIS has been able to bring in some considerable amount . . . from self-employed individuals and businesses”.
Up to September last year it was estimated that private sector entities and self-employed individuals owed the NIS in excess of $300 million.
Minister of Health John Boyce also reminded the self-employed, including contractors and part-time workers that “quoting cash flow” as the reason for non-payment was not an excuse.