Arnhim Eustace does not seem to know the NIS Benefits Regulations

Fri, Jun 22. 2012

Editor: It bothers me that the Leader of the Opposition who is a former Chairman of the NIS Board and Minister of Finance with responsibility for social security appears to be so terribly ignorant of NIS legislation and policy.{{more}} It’s one thing for him to get the institution’s financial and investment details wrong and it is quite another thing for him to be unfamiliar with the provisions of Act #13 of 1994 which was, interestingly enough, passed by an NDP-controlled Parliament, and by which NIS benefits are regulated.

Mr Eustace recently spoke of an unidentified 60-year-old female who was apparently denied a pension “although she has surpassed the 300 contributions required when she joined NIS.” He suggested that somewhere along the line the contribution threshold was raised to 500 in a deliberate attempt to reduce the institution’s long term financial obligations and without regard for the general welfare of Vincentians.

We should first of all be suspicious when an advocate of “fiscal discipline” and of “financial austerity” and of “balancing the books” at the expense of a more fundamental social balance suddenly becomes interested in poor people’s concerns, especially since he frowned upon the recent introduction of the non-contributory pensions and the elderly assistance benefits on financial sustainability grounds and gave the impression that the NIS is running out of money. The Leader of the Opposition and devotee of the Washington consensus should remember that the IMF declared that St Vincent and the Grenadines has one of the most generous pension systems by regional and international standards.

Now, the Act specifies that an insured person who was under 37 years old when the NIS was established in 1987 and who “has paid or been credited with not less than five hundred weekly contributions” and “has attained the age of sixty years” shall be awarded a pension. This provision applies to anyone who retired after 2010, including, presumably, Mr Eustace’s fairytale friend. The law only allows for a reduced pension to be paid to individuals who were 37 or older when the NIS was set up because of the relatively short period of time available to them for the accumulation of NIS contributions and the need for some minimum protection from the economic fears of old age. Only individuals who were 44 in 1987 and turned 60 in 2003 could say that “300 contributions were required for a (reduced) pension when they joined NIS,” according to the National Insurance (Benefits) Regulations.

It is critical to note that someone who has made insufficient contributions to qualify for a pension does not simply walk away from the NIS empty-handed. A refund of all accumulated contributions or a grant of an amount specified by law (and which may better suit a retiree’s purposes) is payable to such a person upon retirement.

Arhnim Eustace was wrong not so long ago about NIS financial and investment details. He has now also publicly demonstrated that he is unfamiliar with NIS Benefits Regulations.

R. T. Luke V. Browne