Unemployment Fund restocked with millions – Straughn

Ministers have approved a plan to pump $143 million into the Unemployment Fund after a record run on unemployment benefits triggered by the coronavirus pandemic, Government said Friday.        

The recapitalisation is still $12 million short of the claims paid out to jobless Barbadians in 2020 and the first four months of 2021.

Minister of Finance Ryan Straughn said the plan was accepted during Cabinet’s Thursday meeting and involved talks with the National Insurance Board.

The Unemployment Fund has had to borrow money from the National Insurance Fund to pay out claims, he said.

Straughn said: “The amount required to recapitalise the Fund is $143 million, which is a lot of money. But you would appreciate that the Fund did pay out $155 million last year.  In a normal year, the Unemployment Fund would take in roughly $50 million and pay out about $37 million or so on average.

“But obviously with the extraordinary claims last year, the fund was completely exhausted, and obviously with lower levels of employment, it meant contributions going into the Fund were lower during 2020.

“Over the next few fiscal years, we will see that fund being replenished, but as it stands at the moment, we will give to the National Insurance enough money to be able to ensure that persons can continue to receive benefits.”

Straughn said  that about 11,000 unemployment claims were made because of the lockdown earlier this year but on a significantly lower level than last year.

The finance minister indicated he is banking on more Barbadians returning to work soon, which would also help replenish the fund.

He also noted the World Bank’s approval of a $200 million loan on Thursday to support the response to the COVID-19 pandemic, which he said came while the International Monetary Fund recognised that Barbados had met its targets under its homegrown revised austerity plan, the Barbados Economic Recovery and Transformation (BERT) programme.

Straughn hinted the Government was buoyed by recent developments that augur for the country’s economic recovery from the pandemic. This includes the lifting of travel restrictions from the country’s main tourism source market, the United Kingdom.

He declared that public health was being managed very well and urged Barbadians to continue following the protocols.

“Things look positive for the country as we further accelerate Government’s capital works programme until such time as we can get the tourists to come back,” said the finance minister.

“With Barbados now on the green list for UK travel, I think we are in a good place right now…knock on wood; everything appears to be coming together for us to be able to accelerate the recovery.” (SD/BGIS)