The National Insurance System (NIS) is not a budgetary item and should not have been addressed in Monday's budget presentation. NIS consultant Hubert Dolsingh said taxpayers do not pay NIS benefits and could not understand why it was included in the fiscal package for the next year. Dolsingh said the contributions to NIS were not income to government. On Monday, Finance Minister Winston Dookeran said the NIS retirement pension benefit will be increased to $3,000. Dookeran said the increase was "to bring equity to the system."
In an interview yesterday, Dolsingh questioned the objective of the insurance saying "how could those who pay more receive less." To qualify for the retirement pension benefit, a person must have made 750 contributions. He said there were 16 classes under NIS. Those in Class One pay $17.28 while those in Class 16 pay $206.82. He said: "It is my view that you cannot put a pension across the board regardless of a person's contribution and rate of contribution." Giving an example, he said a person who had paid NIS since its inception in 1971 would have made 2,060 contributions and would be entitled to receive the proposed $3,000 by government.
"Compare that to someone who has made the required 750 contributions," Dolsingh said. He said: "I want to know how does the objective of insurance apply where you pay more and get less." He called on government to pay increments to those who surpassed the 750 contributions. Dolsingh said he submitted four recommendations to Dookeran last month and two were outlined in the budget presentation. Dolsingh was thankful that Dookeran considered and implemented the waiver for payments of penalties and interest on all outstanding contributions by employers. The proposed waiver will be applicable until June 20, 2012 provided that all outstanding contributions are paid by employers who have been registered with the National Insurance Board before October 10, 2011. The waiver will only apply to penalties ad interest payments accrued before October 10, 2011.