National Insurance Office

1
UNDERSTANDING NIS BENEFITS

• National Insurance Office
• by Mr. Kevin Harris and
• Ms. Shelley Blades
• National InsuranceMore than a Contribution.
  Its your lifeline.

2
Establishment

• National Insurance was established in 1967 for
  the purpose of providing benefits as may be
  specified in the NISS Act to substitute for the
  Workmens Compensation Act, 1963, a system of
  insurance against personal injury caused by
  accident arising out of and in the course of a
  persons employment and against prescribed
  diseases and injuries due to the nature of a
  persons employment to establish for the
  administration thereof a National Insurance Board
  and a National Insurance Fund and for purposes
  connected with the matters aforesaid.

3
Objectives

• Contributors
• Benefits Payable -Short
• Pension Reform
• Benefits Payable-Long

4
CONTRIBUTORS

• WHO BENEFITS
• Persons between the age of 16 and 66(pensionable
  age), is self-employed, or employed under a
  contract of service, is covered under the Act.
• Insurable Earnings
• 91 to 4,270 per month or
• 21 to 985 per week.

5
SHORT TERM BENEFITS PAYABLE

• Sickness
• Maternity Benefit/Grant
• Unemployment
• Employment Injury- (Medical and Travel Expenses)

6
SHORT TERM

• To qualify for Sickness Benefit
• Have credited not less that 7 contributions in
  the relevant quarter.
• Have been engaged in employment immediately
  before becoming ill.
• How is the benefit computed?
• The daily rate is 66 2/3 of the insured
  persons average insurable weekly earnings
  divided by 6

7
SHORT TERM

• To qualify for Maternity Benefit
• Have been insured for 26 contribution weeks
• Have paid at least 16 contributions in the 2
  quarters but one before the contribution quarter
  in which the benefit could become payable.
• Self-employed- not less that 39 contributions
  paid or credited to her account.
• How is the benefit computed?
• The daily rate is 100 of the insured persons
  average insurable weekly earnings divided by 6

8
SHORT TERM

• To qualify for Maternity Grant
• Must not be an Insured person
• Must be an insured person who does not satisfy
  the contribution conditions for Maternity
  Benefit.
• The Spouse must have been an insured person and
  have paid contributions for the relevant period.
• How is the benefit computed?
• The amount payable is 1, 125.00.

9
SHORT TERM

• To qualify for Unemployment Benefit
• Have been insured for 52 contribution weeks
• Have paid at least 20 contributions in the 3
  quarters but one before the contribution quarter
  in which the benefit could become payable.
• Paid for a maximum period of 26 weeks.
• How is the benefit computed?
• The daily rate is 60 of the insured persons
  average insurable weekly earnings divided by 6

10
SHORT TERM

• To qualify for Injury Benefit
• Must be incapable of work as a result of an
  accident arising out of and in the course of
  insured employment,
• Must be incapable of work as a result of a
  prescribed disease.
• How is the benefit computed?
• The daily rate is 90 of the insured persons
  average insurable weekly earnings divided by 6

11
PENSION REFORM

• Increase in NIS contribution rates by 1 each
  year, for 4 years.
• Increase pensionable age by 6 months every 4
  years starting Jan 01, 2006 until age 67 is
  reached in 2018.
• Introduction of flexible NIS Retirement ages so
  that persons may retire on an NIS pension at any
  age from 60 to 70.
• (0.5 reduction/increase applies for early/late
  retirement respectively)

12
PENSION REFORM
Early Pension
Standard Pensionable Age
Time Line Pensionable Age
Up to Dec 2005 65 years
Jan 2006 to Dec 2009 65 ½
Jan 2010 to Dec 2013 66
Jan 2014 to Dec 2017 66 ½
From Jan 2018 67
Year Age
2003 64
2004 63
2005 62
2006 61
2007 60
Presently Old Age Contributory Pension may be
claimed as early as age 60 or as late as 70, with
a 0.5 per month reduction/increase for
early/late retirement respectively.
13
PENSION REFORM

• Pension Formula
• 2 Average Annual Insurable Earnings for first
  20 years
• Plus
• 1.25 AAIE for years thereafter subject to
  maximum of 60
• As of Dec 31 2002
• More than 10 years to retirement - no change
• Between 10 years to 20 years -50 old basis
• -50 new basis
• More than 20 years -new basis

14
LONG TERM BENEFITS PAYABLE

• RECIPROCAL PENSIONS
• INVALIDITY PENSION / GRANT
• DISABLEMENT PENSION / GRANT
• OLD AGE CONTRIBUTORY PENSION / GRANT
• NON-CONTRIBUTORY OLD AGE PENSION
• SURVIVORS PENSION / GRANT
• FUNERAL GRANT
• DEATH BENEFIT

15
RECIPROCAL PENSIONS

• If you do not qualify for a pension under the
  National Insurance regulations, the periods of
  contributions in both countries are combined.
  Each country then calculates the amount of
  pension it would have paid if the total combined
  contributions had been paid under its own Scheme.

16
RECIPROCAL PENSIONS

• There is a Social Agreement between
• Barbados United Kingdom, Canada, Quebec and
  some Caricom states.
• There are
• Antigua and Barbuda , The Bahamas
• Barbados, Belize
• Dominica, Grenada
• Guyana ,Jamaica
• Montserrat, St. Kitts and Nevis
• Saint Lucia, St. Vincent and The Grenadines,
• and Trinidad and Tobago.
• The Agreement is not in effect in Suriname and
  Haiti.

17
CALCULATION

• The minimum pension is 175.00 per week.
• Requirement is at least 500 contributions in
  order to qualify for an OACP.
• If in Barbados you have only made 300
  contributions and in Trinidad and Tobago, where
  you made 200 contributions.
• The portion of the pension to which you are
  entitled in Barbados will therefore be calculated
  based on your contribution to the Barbados
  Scheme 300/500 x 175.00 105.00

18
INVALIDITY PENSION

• For N.I.S purposes the term invalid means a
  person incapable of work, as a result of a
  specific disease or bodily or mental disablement,
  which is likely to remain permanent.
• An insured person who is under pensionable age is
  entitled to an invalidity pension as long as the
  invalidity continues.

19
INVALIDITY PENSION

• To qualify for an Invalidity Pension
• must have at least 150 contributions paid.
• The pension is 40 of avg. annual insurable
  earnings over the best 3 years, plus 1 of total
  insurable earnings after 150 contributions.
• To qualify for Invalidity Grant
• must have at least 50 contributions paid or
  credited .
• This is paid as a lump sum. It is equal to 6
  weeks avg. insurable weekly earnings for each 50
  contributions paid.

20
CALCULATION

• Best 3 years 2008 - 52 weeks - 28,800
• 2009 52 weeks - 29,600
• 2011 52 weeks - 30,400
• Total - 88,800
• Average annual insurable earning
  88, 800/3 - 29,600
• 40 of the Avg. Ins. Earnings
  0.429,600 - 11,800
• Total earnings after 150 contributions
  145,5000.01 - 1, 455
• Total weekly pension is
  118001,455.00/52 weeks - 255.67
• This amount should not exceed the maximum, which
  is 60 of the average insurable earnings.) e.g.
  60 of Avg. Ins. Earnings
  0.60
  29,600 - 17,760
• Weekly pension 17, 760/52 - 341.54
• Since 255.67 is less than 341.54 the weekly
  rate will be 255.67.

21
DISABLEMENT PENSION

• An insured person is entitled to a disablement
  benefit if he suffers from the loss of physical
  or mental faculty, as a result of an employment
  related accident .
• Conditions-
• The disablement must be assessed at, at least 1
  .
• 1 29 assessment is paid as a grant.
• More than 30 assessment is paid as a pension.
• Benefit is payable from the 3rd day following 52
  weeks after the date of accident.
• The assessment must be conducted by a certified
  medical practitioner

22
DISABLEMENT PENSION

• The benefit is calculated on the Injury Benefit
  rate
• The benefit is duplicated with all other benefits
  except Invalidity benefit
• The pension may be payable for life (if
  assessment is final and greater than 30)
• The claimant may continue to work while in
  receipt of a disablement benefit.

23
OLD AGE CONTRIBUTORY PENSION

• This pension is based on the insured earnings of
  the individual, on which contributions were made
  to the NIS.
• Early pensionable age ( 60 to 65 years)
• Pensionable age 66 years
• Late pensionable age (67 to 70 years)

24
CALCULATION

• An insured person contributed to NIS for 1,850
  weeks. His best earnings were in the last 5
  years, the annual average of which was 30,000.
  His aggregate earnings after the first 500 were
  550,800. To compute their pension

Basic pension 30,000 x 40 12,000
Supplementary 550,800 x 1 5,508
Annual pension 12,000 5,508 17,508
Weekly pension 17,508/52 336.69
25
OLD AGE CONTRIBUTORY PENSION

• There are three bases for calculating NIS pension
  which is dependent on the year you reached
  retirement age.
• Persons 56 years or over at December 31, 2002 may
  use the old basis of calculation.
• Person under 47 years in December 31, 2002 will
  use the new basis.
• All other pensions will be calculated using the
  50 new plus 50 old basis also known as the
  50/50 basis.

26
OLD AGE CONTRIBUTORY PENSION(56 on December 31,
2002)

• OLD BASIS
• 40 of Average Annual Insurable Earnings (AAIE)
• Plus
• 1 of Total Insurable Earnings after the first
  500
• 150 contributions paid and 500 contributions paid
  or credited.
• Subject to a maximum pension of 60 of AAIE and a
  minimum of 175 per week.
• The AAIE is based on best 5 calendar years

27
OLD AGE CONTRIBUTORY PENSION

• NEW BASIS
• 2 for ever 50 contributions per year of Average
  Annual Insurable Earnings (AAIE) for the first
  1000 years
• Plus
• 1 1/4 for every 50 contributions of the
  remaining years

28
Persons lt47 on 31 Dec 2002

• Annual average over the best five years
• 2 for each year for first 1000 years and 11/4
  for all subsequent years
• 1850 weeks 37 years
• 20 x 2 x 37,416 14,966.40
• 17 x 11/4 x 37,416 7,950.90
• 14,966.407,950.9022,917.30
• Annual pension capped at 60 22,449.60

29
OLD AGE CONTRIBUTORY PENSION

• 50/50 BASIS
• ½ of the old basis plus
• ½ of the new basis
• ½ of 336.69 ½ of 336.69 336.70

30
OLD AGE CONTRIBUTORY GRANT

• This is a lump sum payment to an individual who
  falls short of the contribution requirements for
  an OACP.
• To qualify the individual must have attained
  pensionable age and must have at least 50
  contributions paid and less than 500 (paid and
  credited).

31
NON-CONTRIBUTORY OLD AGE PENSION

• Eligibility
• Must be a citizen or permanent resident of
  Barbados.
• The claimant may be blind or deaf-mute 18 years
  or older
• Not paid to persons in receipt of a Govt or
  Social Security Pension that is higher
• The pension payable is 142.00 per week

32
SURVIVORS PENSION

• This pension is paid to the surviving spouse
  and/or children of the deceased who was in
  receipt of or would have been entitled to an
  Invalidity Pension or Old Age Contributory
  Pension.
• The deceased must have had at least 150
  contributions paid.

33
SURVIVORS PENSIONSpouses Benefit

• Spouse 50 years or over and married for at least
  3 years is entitled to 1/2 of Pension payable for
  life but ceases upon remarriage or co-habitation
• Spouse 45 to 49 and married for at least 3 years
  is entitled to 1/3 of pension payable for life
  but ceases upon remarriage or co-habitation
• Where the spouse qualify for a pension in their
  own right that is higher than the survivors
  pension, the other pension is paid.
• Spouse under 45 and married for at least 3 years
  is entitled to ½ of pension payable for one year
  only.
• In any event if married for less than 3 years the
  pension payable is
• ½ of pension for 1 year only.

34
SURVIVORS PENSIONChildrens Benefit

• Eligibility
• Each child is entitled to 1/6 of the benefit up
  to age 16 or age 25 if in full time education.
• An Orphan is entitled to 1/3 of the benefit
• An Invalid child is entitled to 1/3 of the
  benefit for life.

35
SURVIVORS GRANT

• The deceased must have had at least 50
  contributions paid but less than 150
  contributions
• The grant is apportioned in the same way as the
  survivors pension
• This benefit is a lump sum payment made to the
  surviving spouse and/or children of the deceased
  who would have been entitled to an Invalidity
  grant or Old Age Contributory grant.

36
DEATH BENEFIT

• This is paid in the case of a death, due to
  employment injury
• The benefit is paid to the dependants of the
  deceased
• spouse wholly or mainly maintained by deceased
  at the time of death is entitled to ½ the benefit
  for life but ceases upon remarriage or
  co-habitation.
• In event of remarriage or co-habitation a
  gratuity of 1 years pension is payable
• Each child is entitled to 1/6 of the benefit up
  to age 16 or age 25, if in full time education.
• An orphan is entitled to 1/3 of the benefit
• An invalid child is entitled to 1/3 of the
  benefit for life.

37
FUNERAL GRANT

• A Funeral Grant is payable in respect of the
  death of an insured person who at the time of
  death was in receipt of (or had entitlement to)
  Sickness, Maternity, Unemployment, Invalidity or
  Old Age Contributory benefits.
• Payable to the person who has met ,or is likely
  to meet the cost of the funeral
• Note an undrawn Benefit is also paid after the
  death of the insured person to the spouse or
  executor of the affairs of the person.

38
FUNERAL GRANT

• A Funeral Grant is also payable in respect of the
  death of the spouse of an insured person in
  respect of whom a grant would have been payable
  whether or not the spouse had predeceased the
  insured person.
• Lump Sum - 1,950.00

39
NATIONAL INSURANCE

• THANK YOU
• ANY QUESTIONS???
• Website www.nis.gov.bb

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