NIS deductions to increase April 1, 2019
Finance Minister Dr Nigel Clarke has announced that as of April 1, 2019 employees will start paying more in deductions for the National Insurance Scheme (NIS).
Speaking in parliament this afternoon, Clarke said contributions will be increasing from five per cent of individuals’ salaries to five and a half per cent.
He said a quarter of one per cent will be absorbed by employees and the other one quarter by their employer.
“This is an inevitable move to ensure that the Fund remains sustainable and viable,” said Clarke, citing the dwindling National Insurance Fund (NIF).
He also announced that come April 1, 2020, there will be a further increase in NIS deductions from five and a half per cent to six per cent.
Clarke, referring to a 2016 actuarial study, said by 2029, the NIF will start to see cash flow issues if inflows are not increased and by 2037, it would be completely depleted.
With 100,000 persons receiving pensions through the NIS, Clarke said in 2017 some $14.78 billion was paid out and only $12.8 billion was generated by the fund.