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TRAINING COURSE ON SOCIAL PROTECTION & FORMALIZATION TRINIDAD AND TOBAGO MARCH 15, 2017 INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION Design of the NIS Assistance from the

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TRAINING COURSE ON SOCIAL PROTECTION & FORMALIZATION TRINIDAD AND TOBAGO MARCH 15, 2017

INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION

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INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION

Design of the NIS

  • Assistance from the ILO in the

1960’s

  • Social Security Minimum Standards

(ILO, Convention 102, 1952)

  • Legislation passed in 1965
  • NIS established April 4, 1966
  • First-tier social security system

INTRODUCTION

The National Insurance Scheme (NIS) is a compulsory, contributory system of social security which offers some financial protection to contributors and their families against loss of income arising from injury on the job, incapacity, retirement and/or death through a range

  • f benefits.
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BENEFITS BENEFITS BENEFITS BENEFITS

Maternity Allowance Employment Injury Benefits Invalidity Special Child Orphan

BENEFITS BENEFITS BENEFITS BENEFITS

Widow’s Widower’s Retirement Health Insurance Special Anniversary

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BENEFITS BENEFITS BENEFITS BENEFITS

Dependent Spouse Allowance Sugar Workers Funeral Grant

THE NIS …….

Social Protection Floor

  • Nationally defined set of basic

social security guarantees which secure protection aimed at preventing or alleviating poverty, vulnerability and social exclusion. (ILO)

  • Social Protection Strategy of

Jamaica

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JAMAICA

Population – 2.7 million Male 49.5% Female 50.5% (Statistical Institute of Jamaica)

ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION

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ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION

National Insurance Scheme Operational unit of the Ministry of Labour

and Social Security

○ Thirteen Parish Offices and two Head Offices

Activities of NIS Five specialized units at the Head Office

○ Over 300 members of staff

National Insurance Fund Invests the contributions

CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS

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CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS

Insurable wage ceiling Ja$1.5 million Contribution rate 5%

○ 4% - NIS ○ 1% - National Health Fund

Maximum contribution 5% of insurable wage ceiling

○ $75,000 per annum; $6,250.00 per month;

$1,562.50 per week Salaried and self-employed Minimum contribution $100.00 per week

○ Domestic workers ○ Voluntary contributors

CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS

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PARTICIPATION

Individuals 18 – 70 years

○ Involved in income earning activity ○ Register

Businesses Register 50% of contributions of employees Self employed persons Exclusions:

Life-time Non-Income Earners (independent contribution based benefits)

FUNDS FLOW FUNDS FLOW FUNDS FLOW FUNDS FLOW

Contributions paid to Tax Administration

Jamaica

Benefits are paid by the NIS directly to

pensioners or their Agents

Cheques Bank accounts

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COVERAGE COVERAGE

Labour Force (2015) 1,325,200 Employed Labour Force 1,146,600 Number of contributors to NIS 413,745 (2006) 379,080 (2010) 469,352 (2015)

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Labour Force 22% Employed Labour Force 40% 13% are public sector workers

PENSION COVERAGE

(Pension Coverage in Jamaica Survey 2013)

NIS Labour Force

○ 29.3%

Employed Labour Force

○ 33.5%

(Pension Coverage in Jamaica Survey 2013)

PENSION COVERAGE

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Higher among females

48% - Women 42% - Men

Highest among younger workers

20 – 24

○ 43%

25 – 44 years

○ 44%

35 – 44 years

○ 26%

45 years and older

○ 30%

(Pension Coverage in Jamaica Survey 2013)

PENSION COVERAGE

Increases progressively with the level of

education

Tertiary

○ 89%

Secondary

○ 44%

PENSION COVERAGE

(Pension Coverage in Jamaica Survey 2013)

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50,000 100,000 150,000 200,000 250,000 300,000 No education/ incomplete primary Complete primary Incomplete secondary Complete secondary Complete college Number of Workers Highest Level of Education Attained

NIS Participation by Education Level

NIS Contributor Non-Contributor Uncertain 6% 11% 19% 44% 89%

Highest in Urban Areas Kingston Metropolitan Area 54% Other Urban Areas 44% Rural 27%

PENSION COVERAGE

(Pension Coverage in Jamaica Survey 2013)

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50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 kma urban rural Number of Workers Location

NIS Participation by Location

NIS Contributor Non-Contributor Uncertain 54% 44% 27%

Participation increases progressively with

income

Income of at least $1.5 million

○ 83%

Less than $250,000.00

○ 22%

PENSION COVERAGE

(Pension Coverage in Jamaica Survey 2013)

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500 1000 1500 2000 2500 <250 250-500 500-750 750-1000 1000-1500 >1500 Number of Respondents

Annual Income ($000) Income Distribution of NIS Participants relative to the Employed Labour Force

NIS participants Employed labour force 22% 49% 77% 35% 81% 83%

Salaried workers 62% Self employed represent 40% of labour force

○ 5%

PENSION COVERAGE

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Participation is higher among larger

businesses

2-4 employees - 11% 5-9 employees - 42% 10-49 persons - 89% 50 and more employees - 90% Informal Sector 11%

PENSION COVERAGE

Informal Sector

The Statistical Institute of Jamaica (STATIN)

measures the informal sector as comprising:

‘Own-account’ workers and employers who own informal

enterprises

Employees working in enterprises with nine or less

persons

Unpaid family members who contribute to the enterprise All employees in jobs where no NIS contribution is

deducted from their pay.

Research – expanded on categories in definition

includes domestic workers and agricultural sector

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COVERAGE BY OCCUPATION

The group with the largest coverage Clerks

20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

Skilled Agricultural and Fishery Workers Service, Shop and Market Sales Workers Craft and Related Trades Workers Elementary Occupations Professionals, Senior Officials and Technicians Plant and Machine Operators and Assemblers Clerks

Number of workers Occupation Classification

NIS Participation by Occupation (Non-Government)

NIS Contributor Non-Contributor Uncertain

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COVERAGE BY INDUSTRY

Agriculture, Hunting, Forestry & Fishing 5% Wholesale & Retail

30%

Construction

10%

Domestic Workers

3%

50,000 100,000 150,000 200,000 250,000 Number of Workers Industry Classification

NIS Participation by Industry

NIS Contributor Non-Contributor Uncertain

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NIS Retirement Pensioners NIS Retirement Pensioners NIS Retirement Pensioners NIS Retirement Pensioners

Total NIS pensioners 72,324 NIS pensioners as percentage of the population: 65 years and over 31.6 Males 65 years and over 31.5 Females 60 years and over 24.9 60-69 years old 14.8 70-79 years old 33.3 80 years and over 31.1 NIS pensioners disaggregated by: Percent of total NIS pensioners Gender Female 55.8 Male 44.2 Age group 60-69 30.1 70-79 44.0

PENSIONERS (January 2017) PENSIONERS (January 2017) PENSIONERS (January 2017) PENSIONERS (January 2017)

PENSION TYPE LOCAL OVERSEAS TOTAL Retirement 78,431 6,380 84,811 Widows/Widowers 19,573 1,193 20,766 Invalidity 6,779 110 6,889 Employment Injury Disablement 1,302 20 1,322 Orphans 39 39 Special Child 9 9 Special Anniversary 5 5 Sugar Workers 12 12 TOTAL 106,150 7,703 113,853

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CHANGE IN COVERAGE

2013 Research

Labour Force

29.3%

Employed Labour

Force

33.5%

2015

Labour Force

35%

Employed Labour

Force

41%

DIFFICULT TO COVER GROUP DIFFICULT TO COVER GROUP DIFFICULT TO COVER GROUP DIFFICULT TO COVER GROUP

Self employed

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INCENTIVES INCENTIVES INCENTIVES INCENTIVES

Minimum contribution rate Domestic Workers Transport Operators Initiative of Tax Administration Jamaica Reduction in rates

BARRIERS

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LEGAL & ADMINISTRATIVE LEGAL & ADMINISTRATIVE LEGAL & ADMINISTRATIVE LEGAL & ADMINISTRATIVE BARRIERS BARRIERS BARRIERS BARRIERS

Old legislation Loopholes Punitive sanctions Administrative Enforcement

EXTENDING EXTENDING EXTENDING EXTENDING COVERAGE COVERAGE COVERAGE COVERAGE

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EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: INITIATIVES INITIATIVES INITIATIVES INITIATIVES

Employer Survey Goal

○ Improve compliance

Registered and unregistered businesses Update records Target

Amalgamation of statutory deductions and

information sharing

Payments, submission of one return

  • NIS, Tax, NHT, Heart Trust NTA (training)

Information technology

Public Education (small scale) Standards Training Revision of registration and benefit

application forms

Tax Registration Number Valid form of identification

EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: INITIATIVES INITIATIVES INITIATIVES INITIATIVES

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EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: EXTENDING COVERAGE: UPCOMING INTIATIVES UPCOMING INTIATIVES UPCOMING INTIATIVES UPCOMING INTIATIVES

Upcoming Financial Year

Awareness and Perception Survey Staffing and Operations Review Review of the legislation

Medium Term

Marketing Campaign License granting entities

Mandatory compliance with NIS for registration

Tourism Workers Pension Fund

Ministry of Tourism (embryonic stage)

Thank You Thank You Thank You Thank You