Buchanan
Balford Henry, Senior Staff Reporter
NATIONAL Insurance contributions paid by over half a million Jamaicans could be increased this year.
Although Minister of Labour and Social Security, Donald Buchanan, insists that a final decision has not been made yet, information obtained since last week suggests that the contributions will have to be increased, at least to meet the National Insurance Fund's (NIF) support for the new National Health Fund (NHF) which should become effective by July.
The NIF is the fund which finances the National Insurance Scheme (NIS) and the NHF will finance the proposed National Health Programme.
The NHF will need nearly $2 billion annually from the NIF, which is approximately the same amount that the NIF is growing by annually, since moving into commercial investments. These investments have increased the Fund's total from $1.5 billion in 1990 to $17 billion today.
The Jamaica Employers Federation (JEF) expressed its concern about the proposals to increase the contributions, in a meeting with Mr. Buchanan on February 27. JEF told the Minister that its concerns were being raised against the background that there has been no consultation with employers on the issue.
Vice-president of the Jamaica Confederation of Trade Unions (JCTU), Dwight Nelson, said Friday that the Confederation was not aware of any proposals to vary either the tax or the benefits. He felt that the Fund had generated enough capital over the past few years to avoid an increase in contributions.
Permanent Secretary in the Ministry of Labour and Social Security, Alvin McIntosh, said Thursday that his Ministry was not just looking at increasing NIS contributions to finance the Health Fund, but to introduce a wider range of benefits to the contributors, as well.
He said that an actuarial review was currently being done to inform decisions, such as to the possible level of increase in contributions and the additional benefits which could be facilitated.
A contract for the provider of the computerised NHF system was signed this month. But, Permanent Secretary in the Ministry of Health, Grace Allen Young, said that the actual benefits will not come into effect until July. These benefits will be to persons suffering from chronic diseases such as arthritis, asthma, cancer and mental illnesses.
When Minister of Health, John Junor, announced the coming of the NHF in the House of Representatives last October, he said that it would become effective in March this year. He said a levy on tobacco consumption would have been introduced to raise the $2.5 billion the NHF needs to meet its budget by this month. But, the levy has not yet been introduced.
Mrs. Allen-Young told The Sunday Gleaner on Friday that the levy should come into effect by July. However, she admitted that it is only expected to raise $600-$700 million, annually, of the $2.3-$2.5 billion budget of the NHF and that the main source of funding would have to be the National Insurance Fund.
That does not sit well with Mr. Buchanan though. He told The Sunday Gleaner on Friday that the discussions about using NIF funds to finance the NHF were "inconclusive".
"The administrative arrangements have been agreed on but, in terms of the structure, no decision has yet been made. All I know is that those are proposals that are in front of us," he said.
He said that the actuarial review of the NIF was effected more than a year ago and would not necessarily result in an increase in NIS deductions. But, he added, that he did not want to pre-empt the report, which he expects to be ready soon.
