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

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

BENEFITS Maternity Allowance Employment Injury Benefits Invalidity Special Child Orphan BENEFITS Widow s Widower s Retirement Health Insurance Special Anniversary

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

JAMAICA Population 2.7 million Male 49.5% Female 50.5% (Statistical Institute of Jamaica) 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 Insurable wage ceiling Ja$1.5 million Contribution rate 5% 4% - NIS 1% - National Health Fund CONTRIBUTIONS 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

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 Contributions paid to Tax Administration Jamaica Benefits are paid by the NIS directly to pensioners or their Agents Cheques Bank accounts

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)

PENSION COVERAGE Labour Force 22% Employed Labour Force 40% 13% are public sector workers (Pension Coverage in Jamaica Survey 2013) PENSION COVERAGE NIS Labour Force 29.3% Employed Labour Force 33.5% (Pension Coverage in Jamaica Survey 2013)

PENSION COVERAGE 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 in Jamaica Survey 2013)

NIS Participation by Education Level 300,000 250,000 44% Number of Workers 200,000 150,000 100,000 19% 89% 50,000 6% 11% 0 No education/ incomplete primary Complete primary Incomplete secondary Complete secondary Complete college Highest Level of Education Attained NIS Contributor Non-Contributor Uncertain PENSION COVERAGE Highest in Urban Areas Kingston Metropolitan Area 54% Other Urban Areas 44% Rural 27% (Pension Coverage in Jamaica Survey 2013)

NIS Participation by Location 400,000 350,000 300,000 250,000 54% Number of Workers 200,000 44% 27% NIS Contributor Non-Contributor Uncertain 150,000 100,000 50,000 0 kma urban rural Location PENSION COVERAGE Participation increases progressively with income Income of at least $1.5 million 83% Less than $250,000.00 22% (Pension Coverage in Jamaica Survey 2013)

2500 Income Distribution of NIS Participants relative to the Employed Labour Force 2000 NIS participants Employed labour force Number of Respondents 1500 1000 22% 49% 77% 500 35% 81% 83% 0 <250 250-500 500-750 750-1000 1000-1500 >1500 Annual Income ($000) PENSION COVERAGE Salaried workers 62% Self employed represent 40% of labour force 5%

PENSION COVERAGE 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% 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

COVERAGE BY OCCUPATION The group with the largest coverage Clerks NIS Participation by Occupation (Non-Government) 200,000 180,000 160,000 140,000 Number of workers 120,000 100,000 80,000 60,000 40,000 20,000 0 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 Occupation Classification NIS Contributor Non-Contributor Uncertain

COVERAGE BY INDUSTRY Agriculture, Hunting, Forestry & Fishing 5% Wholesale & Retail 30% Construction 10% Domestic Workers 3% 250,000 NIS Participation by Industry 200,000 Number of Workers 150,000 100,000 50,000 0 Industry Classification NIS Contributor Non-Contributor Uncertain

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 Percent of total NIS pensioners disaggregated by: NIS pensioners Gender Female 55.8 Male 44.2 Age group 60-69 30.1 70-79 44.0 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 1,302 20 1,322 Disablement Orphans 39 39 Special Child 9 9 Special Anniversary 5 5 Sugar Workers 12 12 TOTAL 106,150 7,703 113,853

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 Self employed

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

LEGAL & ADMINISTRATIVE BARRIERS Old legislation Loopholes Punitive sanctions Administrative Enforcement EXTENDING COVERAGE

EXTENDING COVERAGE: 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 EXTENDING COVERAGE: INITIATIVES Revision of registration and benefit application forms Tax Registration Number Valid form of identification

EXTENDING COVERAGE: 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