By Vernon Daley, Staff ReporterPENSIONERS UNDER the National Insurance Scheme will begin to receive increased benefits from July 1, Horace Dalley, Labour and Social Security Minister, announced yesterday.
Also, he unveiled a multi-million dollar health plan for the island's 84,000 pensioners that will cover hospital expenses, doctor's visits and prescription drugs. That plan will come on stream on October 1.
To help pay for these benefits and ensure the viability of the NIS fund, the ceiling on which NIS contributions is calculated will be move from $250,000 to $500,000, effective October 1.
ACTUARIAL STUDY
"The new insurable wage ceiling of $500,000 is based on a detailed actuarial study. The level that has been decided on represents the optimal position in respect of maintaining fund viability and by extension ensuring sustainability of the proposed expansion of benefits," Mr. Dalley told the House of Representatives.
Only employees earning more than $250,000 per annum will be affected by the increase in the NIS ceiling.
The NIS contribution rate remains at 2.5 per cent for the employee, matched by a 2.5 per cent contribution by the employer. However, under a restructured NIS scheme, 0.5 per cent of the employee's contribution and a matching 0.5 of the employer's contribution will go to the newly established National Health Fund.
Government is expected to rake in about $4 billion in NIS contributions when the new ceiling is implemented. About 20 per cent of this, or $800 million will be turned over to the NHF.
With the raising of the wage ceiling, there will be corresponding increases in benefits, costing the Government $3 billion this financial year and moving up to about $5 billion by 2007/2008.
Full rate basic pension will be increased from $600 per week to $900 per week; three-quarter rate pension will move from $450 per week to $675 per week; and half-rate pension will be hiked from $300 per week to $450 per week.
Sugar workers' pension will be increased from $300 per week to $450 per week while spouse allowance, which is payable in addition to old age and invalidity pension has been increased from $200 per week to $300 per week.
"Sometime ago a special anniversary pension was introduced for persons born in 1906 and earlier and who, therefore, did not have the opportunity to contribute to the NIS. I am pleased to report that their benefit has also been increased from $300 per week to $450 per cent," Mr Dalley said.
At the same time, orphan and special child's allowance, will be moved from $1,050 per week to $1,575 per week. This allowance is payable to surviving children of deceased contributor until they reach the age of 18.
HIGH COST
Funeral grants will be increased from $18,000 to $30,000 to help the needy with the high cost of burying their loved ones. Also, the benefit for employees who suffer injury and die on the job, will be raised from $90,480 to $150,000.
In addition to the increases, pensioners will benefit from a special health plan that will cover hospital expenses, surgical fees, doctor's visits, diagnostic services and prescription drugs. In its first year, this plan will cost the Government about $250 million.
"The ministry is in discussion with several providers for the administration of this plan," the minister said.
