SOCIAL PROTECTION AND FORMALIZATION for DIFFICULT TO COVER GROUPS 1. WHO IS COVERED • All persons over 16 years of age and under pensionable age who are employed under a contract of service. • Anyone 16 years of age and under pensionable age* (66 ½) whose employment is not under a contract of service. • Contributions must be paid whether or not the worker is Barbadian. • * 2018 - 67
1. WHO IS COVERED CONT’D • Persons temporarily employed outside of Barbados who were recruited in Barbados for a labour programme sponsored by the Government are covered as self-employed. • Taxi drivers who own their vehicles are covered in the category of self-employed persons. • Taxi drivers employed by transport cooperatives are insured as employees. 1. COVERAGE CONT’D • Insured population: � 2016 107,652 � 2015 113,507 � 2014 116,458 These figures encompass government employees, those from the private sector and the self- employed.
1. COVERAGE CONT’D • Estimated number of self-employed and persons in the informal sector: 20,000* or 18.5% of the insured population. • Number registered with the National Insurance Office: 6,165 or 30%. • Less that 20% of the self-employed submit contribution payments. • *figures from B’dos Statistical Service prior to 2010 1. COVERAGE CONT’D • There has been a decline in the number of self- employed persons submitting contributions. • Payments over the last four years from the self- employed: � 2016 2,419 � 2015 2,925 � 2014 3,432 � 2013 3,651
1. COVERAGE CONT’D • Beneficiaries are divided between persons who are retired and those in the work force. • No of persons receiving pensions – 44,264 • Population receiving benefits for short periods of time – 62,391 2. CONTRIBUTIONS RATES • Insurable earnings –the upper limit of salaries and wages on which contributions are paid. • Insurable earnings for 2017: � Monthly - $4,650 � Weekly - $1,073
2. CONTRIBUTION RATES CONT’D • Minimum earnings for the payment of contributions: � Weekly: $21.00 � Monthly: $91.00 2. CONTRIBUTION RATES CONT’D Self-employed - "S" Self-employed Total % % National Insurance 13.50 13.5 Non-Contributory 2.00 2.00 Employment Injury 0 0 Unemployment 0 0 Severance 0 0 Training Levy 0.50 0.50 Catastrophe Fund 0.10 0.10 Total 16.1% 16.1%
2. CONTRIBUTION RATES CONT’D Government Temporary Employees - "T" Employee Employer Total % % % National Insurance 6.75 6.75 13.50 Non-Contributory 2.00 2.00 4.00 Employment Injury 0 0.75 0.75 Unemployment 0.75 0.75 1.50 Severance 0 0 0 Training Levy 0.50 0 0.50 Catastrophe Fund 0.10 0 0.10 Total 10.1% 10.25% 20.35% 2. CONTRIBUTION RATES CONT’D Government Permanent Employees - "P" Employee Employer Total % % % National Insurance 6.20 6.20 12.40 Non-Contributory 2.00 2.00 4.00 Employment Injury 0 0.75 0.75 Unemployment 0 0 0 Severance 0 0 0 Training Levy 0.50 0 0.50 Catastrophe Fund 0.10 0 0.10 Total 8.8% 8.95% 17.75%
2. CONTRIBUTION RATES CONT’D Private Sector Employees - "R Employee Employer Total % % % National Insurance 6.75 6.75 13.50 Non-Contributory 2.00 2.00 4.00 Private Sector Employees - "R" Employment Injury 0 0.75 0.75 Unemployment 0.75 0.75 1.50 Severance 0 0.50 0.50 Training Levy 0.50 0.50 1 Catastrophe Fund 0.10 0 0.10 Total 10.1% 11.25% 21.35% 3. ADMINISTRATIVE PROCEDURES FOR AFFILATION • Self-employed contribution payments entitle them to receive the following benefits: – Contributory pension or grant – Sickness benefit – Maternity benefit – Invalidity pension or grant – Funeral grant – Survivor’s pension or grant
3. ADMINISTRATIVE PROCEDURES CONT’D • Self-employed contributions are usually submitted quarterly. • Payments can also be submitted monthly, annually or via lump sum payments. • Contributions are based on the earnings from self-employment during the year immediately before the year in which the contribution is due. 4. INCENTIVES TO FORMALIZATION • There is the provision for the payment of a minimum pension for persons at the lower end of the scale. • Insured persons who contribute at the minimum earnings level are guaranteed a pension of $190.00/week.
4. INCENTIVES CONT’D • The earnings of migrant workers are totalised under the Reciprocal Agreements with various countries and are used to determine qualification for pension benefits. • Insured workers therefore benefit although contribution payments are made in countries other than the one from which they originate. 5. DIFFICULT TO COVER GROUPS • Persons in the liberal professions: � Attorneys � Engineers � Doctors • This group generally believes they are able to provide for their future and do not require social security coverage.
5. DIFFICULT TO COVER GROUPS • The Informal Sector � Vendors � Nail technicians � Itinerant vendors � Agricultural workers Often these persons work at home, have no established place of business, and experience fluctuations in their earning capacity. 5. DIFFICULT TO COVER GROUPS • The self-employed: � Fisher-folk � Hairdressers � Building contractors � Directors of companies � Entertainers � Construction workers This group believe their income is too little and they cannot afford to withhold 16.1% of their income to pay contributions.
6. EXTENDING COVERAGE Past and current initiatives • Promotional campaigns • Group field visits to areas where workers operate • Presentations to umbrella bodies. e.g. Fisher Folk Association, Small Business Association • National Insurance Clearance Certificates are required for certain transactions 6. EXTENDING COVERAGE CONT’D • Filing of Unpaid National Insurance Certificates in the Magistrates and High Court • Legislative amendments: Unpaid contributions become a charge on property. • National Insurance certificates are required for the sale and purchase of property.
6. EXTENDING COVERAGE CONT’D Proposed initiatives • Online and mobile payments for the self employed • Use of portable bank card readers to facilitate payment at workers location • Flexible contribution rates • Billing the self-employed based on historical information
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