Government is making moves to rebuild the multi-billion-dollar National Insurance Scheme (NIS) to ensure it can survive the next crisis, after successfully coming out of the COVID-19 pandemic.
At the same time, former Deputy Chairman of the NIS, Professor Avinash Persaud who said the agency had overcome “the biggest test in its entire history”, told Barbados TODAY it must also find ways to rein in approximately 35 per cent of the Barbadian workforce that is not currently covered.
His analysis follows a three-year stint at the social security agency which concluded at the end of June and included periods where unemployment surged to almost 40 per cent.
Persaud said the over $150 million in unemployment claims paid out have allowed the economy to “stay upright” over the “very intense” periods of the pandemic. In fact, at one stage, he revealed the scheme was providing benefits to as many as 35 000 individuals every two to four weeks.
“It’s a $4 billion-dollar fund, it’s a large fund, it is certainly able to manage a crisis of this order, but it would not be able to manage a crisis of this order happening every year, and so the Government is working on plans to ensure we can rebuild the NIS so it is ready for the next crisis like this,” he told Barbados TODAY.
“The NIS has had no trouble meeting its commitments to date, but it will come as no surprise to people that the Government wants to make sure it is stronger when we rebuild it as much as we can, and we are discussing it at the moment.
“How do we strengthen the capital of the NIS in a world in which we may have more of these crises coming so that it is fit for the next one? It has certainly passed the financial test of this one, but we have to make sure our institutions are ready to be even better dealing with the next one,” Persaud emphasized.
As part of the push toward long-term sustainability, the distinguished economist contended that the NIS, which covers just 65 per cent of the Barbadian workforce, must expand its reach.
“The NIS would have a much stronger future if we could raise that number from 65 to 75 or 80 per cent,” Persaud declared.
“Now we know that one of the reasons why the NIS became less relevant is because the NIS is based around the traditional field of employment that assumes that each person has one employer, one job where you work for five days a week, but nowadays there is a lot more flexibility.
“People have more than one job, they work a few days here and a few days there, and they work different hours and more flexible hours,” he added.
One of the highly touted innovations that emerged in the middle of the pandemic was the Self Employed Business Interruption Benefit that provided payments of $1 500 to small business owners who otherwise could not benefit from the NIS.
“So, we are looking at new benefits like that, that will increase the relevancy of the NIS, that will ensure that their coverage can be even greater. If we end up with 80 per cent of members of the NIS system, then the system will actually be much stronger. So, that is a goal we are trying to move towards,” he concluded. ([email protected])