A bill to waive late-filing penalties for employers is expected to yield $161 million in its first year of operation plus $792 million over the next ten years, Finance Minister Colm Imbert told the House of Representatives on Wednesday, piloting the National Insurance (Amendment) Bill.
He said this benefit was a very conservative estimate, based on a mere ten per cent of some 4,034 employers who are currently unregistered becoming registered after the bill’s passage.
Defining registered employers as those registered for pay-as-you-earn tax for their workers, he said only 84 per cent of these employers had also registered at the NIB.
Imbert said that each year in succession from 2019-2021 respectively the NIB had collected an extra $319 million, $547 million and $424 million in arrears owed by employers, totalling $1.3 billion.
However he went on to lament a $1 billion deficit each between the NIB’s benefits paid out and contributions raked in, respectively of $5.5 billion and $4.5 billion annually.
Saying the bill offers only temporary help to the NIB’s financial state, Imbert sought to expand the debate to discuss more permanent ways to help the NIB to address the deficit caused by a shrinking workforce of contributors coupled with an expanding pool of retired claimants. This deficit, he said, had been reported by successive auditor reports on the NIB over the years.
Imbert tried to focus debate on the question of increasing the retirement age from 60 to 65 to allow the worker another five years to contribute to the NIB fund (rather than take from it), but was reined in by Speaker Bridgid Annisette-George. He managed to say that this country was far behind other countries in a similar situation which had already raised their retirement ages to 65.
Imbert said such a hike was a win-win situation, as the worker would still retain his/her salary instead of a reduced NIB benefit, while the employer and NIB would also benefit. He said other possible were to increase the contribution level, reduce the benefit paid, or to include self-employed people.