Oran Hall | Transferring NHT benefits to family
QUESTION: I contributed to NHT for years when I worked in Jamaica. I am now living in the United States. Can the money be refunded to my children, who are still living in Jamaica to contribute to the purchase of a home? I am not interested in a loan.
FINANCIAL ADVISER: Only current contributors to the National Housing Trust qualify for benefits from it, which means that you are not now in a position to extend your benefit to your children by co-applying with them, but that could change.
If you are not able to derive a benefit from the NHT, in any form, you will not lose your contributions as, like other contributors, you are eligible for a refund of your contributions in the eighth year after you have made your contributions.
NHT contributors who migrate may make NHT contributions as voluntary contributors. A voluntary contributor is a person who is not required by Jamaican law to contribute to the NHT and who does not earn an income in Jamaica, but wishes to make contributions anyway.
To become a voluntary contributor, an individual must first register with the NHT by completing the 'voluntary contributor's questionnaire' and 'declaration of income form'. There is a form for overseas contributors but also one for local contributors
The applicant will need to register with the Tax Registration Centre to obtain a TRN because this will be needed for the registration process. The applicant will be required to do an interview upon completing the questionnaire and the form.
For the non-resident - who must be a citizen or permanent resident of a foreign country - the form should be signed, stamped and dated by a notary public and by a justice of the peace if the applicant is a local resident.
These forms should be submitted to an office of the NHT along with several other documents, including a TRN card, NIS card which can be obtained by applying to the National Insurance Scheme office evidence of income, such as an employment letter or the last two payslips, an amount equal to the first month's contribution, valid identification, birth certificate, and passport-sized photograph.
An individual acting as the representative of the applicant should present a letter of authorisation signed by a justice of the peace or notary public.
Individuals who have never contributed to the NHT are required to wait two years to access a benefit upon registering, but monthly contributions must be made on time for the 12 months immediately preceding the date of the loan application.
Previous contributors who desire to rÈsumÈ making contributions to the trust must do so to allow enough time to meet the minimum waiting period to qualify for a benefit and should bear in mind that contributions are made up to age 65. They are required to wait one year to qualify for a benefit and must pay their monthly contributions on time for the 12 months immediately preceding the loan application. Payments must be made before the 14th of the following month.
Although it is not a requirement to pay up the first year in a lump-sum payment, previous contributors can do so if they desire but must wait the two years before applying for a housing benefit.
One way in which contributors including voluntary contributors can assist another to own a home is by co-applying but choosing not to have their name on the title, meaning they would have no interest in the property but would not be able to apply for another loan until 15 years have passed if the full amount of the entitlement has been used.
The NHT would effectively grant two loans, the terms and amounts of which would be determined by the age and income of the applicants, both of whom must be contributors and thus younger than 65. An applicant opting not to have an interest in the property and who has never owned a home would have an entitlement of $5.50 million and one owning a home but without previously receiving an NHT benefit would have an entitlement of $2.5 million.
There would thus be two repayment terms and amounts, but one person would, by mutual arrangement between the borrowers, make the monthly mortgage payments. In such an arrangement, the co-borrowers need not be related.
There are two arrangements which allow parents to assist their children to own a home. In one, a parent, who must be under 65 and a contributor to the NHT, and owns a home but has not received an NHT benefit can borrow up to $5.5 million to assist an offspring to build a house or to buy one on the open market.
The child can also apply, meaning there would be two loans with different repayment terms and amounts based on the age and income of each applicant. Both would make such payments to the NHT, but the parent's payment would stop at age 70.
The other Parent Assist Programme facility is for parents over 65, meaning they would no longer be contributors to the NHT. They would not be able to get a loan but would be able to assist their children to qualify for selection to own a housing unit in an NHT scheme by using their points. Only the child would qualify for a loan in this case.
Such parents should never have received an NHT benefit and must not have received their full NHT refunds, meaning that at least one refund should still be due to them.
Persons living in Canada or the United States may call 1-800-858-3219 for further assistance.
- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email email@example.com