Employment followed a basic pattern 50 years ago. People left school, went into a company or the public service and stayed in their chosen profession until retirement. Sometimes they stayed in the same position, but on occasion they got a chance to move up the corporate ladder, all with the calm reassurance that owing to their National Insurance contributions over the years, they would receive a pension that would help them meet their everyday needs after leaving the workforce. Beyond that, while they were working, they received comfort in the knowledge that they would receive some financial compensation if they became ill, had children, became unemployed at some point in their career, or had to pay for a funeral in their family.
Now the climate has changed. People hardly ever stay in the same job from the time they leave school till they retire. Several factors contribute to this, including opportunities to pursue further education which encourages them to “hang their hats a little higher” by assuming higher posts in another company if they reach a glass ceiling in their current workplace. There is also greater competition in the job market, with many different companies operating in the same field where there were previously monopolies, so some offer incentives such as higher pay and more benefits for their workers, which encourages people to move on if they are not comfortable in their current space.
Apart from a higher worker turnover for personal reasons, companies have also found different ways to reduce some of the overheads associated with human resources management. So more private and public sector firms are employing people on a contractual rather than full time basis. These contracts, which are usually one year long in the first instance, pay the worker a fixed salary, but he or she is expected to “pay their own way” when it comes to National Insurance contributions and Income Tax, therefore falling into the self-employed category.
We are also hearing a lot about entrepreneurship these days, and several organisations have sprung up that are willing to help people get business ventures started. But let us face it; like everybody else, those entrepreneurs will one day fall ill, have children, may have to pay for a funeral, and of course they will want to retire at some point in their lives. Along the way, they might face the unfortunate situation of having an accident on the job, which may result in a permanent disability. If they have not been able to invest in a personal life insurance policy, what help is available for them?
Like everyone else, their income has to meet a wide range of personal expenses and usually leaves back very little, and the 16% of it that NIS requires can be an additional burden on someone who is barely managing to make ends meet. Yes, the office allows self-employed people to make “short payments” if they cannot meet the full requirement for the quarter at one time, but in a contractual arrangement where income may vary based on the amount of work the self-employed person gets according to their chosen profession, or when someone is starting a new business and has lots of expenses to cover, it can be difficult. There is also the fact that certain benefits, such as maternity grants, can only be paid once a certain level of contributions has been reached over a given period, which once again is not always possible or practical.
To our knowledge, no statistics have been given on the number of self-employed people in Barbados. But most likely the numbers have increased over the past decade with the above-mentioned changes in the job market. We are also unaware of the number of NIS defaulters in the self-employed category. Nevertheless, we are certain that many of them do recognise the importance of receiving the benefits available to them under the social security scheme (especially if they previously received the benefits) and are quite willing to pay but simply cannot afford to do so. It might be helpful for the National Insurance Scheme to meet with these workers, find out some of their concerns, and make payment arrangements with them that are more manageable, even if it means changing the percentage contribution they make now to something smaller.
As we seek to encourage greater entrepreneurship, we need to look not only at ensuring they get the capital they require to establish themselves and for future growth of their businesses, we must also ensure that the owners of those businesses and their families will be well looked after in the event that life’s circumstances intervene, impacting on their wellbeing.
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