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Parliament approves amendments to NIS Act

Leader of Government Business in the Upper House of Parliament, Senator Adrian Thomas

Both Houses of Parliament have approved amendments to the National Insurance (NIS) Act, Chapter 205, which seeks to “preempt and bolster pending amendments to the national insurance benefit regulations, and national injury benefit regulations to improve the benefits available to children of insured persons.”

That’s according to Leader of Government Business in the Upper House of Parliament, Senator Adrian Thomas, who moved the National Insurance Amendment Bill, 2023 during Tuesday’s sitting in St. George’s.

Senators approved changes to the definition of a child, the age of a child, and the fine for employers, and other individuals who fail to comply with some regulations of the NIS.

Currently, a child in relation to an insured individual includes a stepchild, an adopted child, and any other child, whether born in or out of wedlock under the age of 16, living at the home of an insured person, and wholly or partly maintained by him or her.

Sen. Thomas told the sitting of the Upper House that at present, the definition of a child as set out in the legislation “is not always applicable to the situation … (and) puts doubt in the mind of the National Insurance Scheme with regards to paying or maintaining an individual.”

“The present legislation is literally saying to our society that if a child is not being taken care of by a father or, a mother, and that insured individual is to pass away, the National Insurance Scheme will do likewise (and) we cannot continue going down that road,” he said.

The amendments widen that definition, which poses certain challenges for potential beneficiaries.

The new definition will mean a biological child or a person declared or presumed to be a biological child, a step-child, an adopted child, or a person expressly acknowledged by the insured person as a biological child or step-child under the age of 18.

Grenada is a signatory to the UN Convention on the Rights of a Child, and raising the age of a child to 18 brings the NIS law into harmony with other legislation where the term child is used or referred to.

The amendments to the legislation also provides for the court to increase the fine it can impose on violators of Section 56 of the Act to a sum not exceeding EC$5,000.

Offences under this section include failing to pay deducted contributions and making false statements to the NIS.

Violators of Section 64 of the Act will now face a fine of EC$2,000.

Offences under this section include receiving payment for a person or beneficiary where payment of a benefit has been suspended and providing false documents to the NIS to claim a benefit such as a widow or a widower entitlement.

The amendments to the NIS Act were approved in the Lower House or House of Representatives earlier this month and are scheduled to go into effect on August 1, 2023.

Both Houses of Parliament have also approved amendments to the Act, which will see an increase in the pension age to 65 by 2029, and the contribution rate to 16% by 2031.

These recommendations as set out in the National Insurance Amendment Bill (2), dates back to 2002, but successive administrations chose to cherry-pick the reforms they wanted to make.

In 2021, the then-ruling New National Party (NNP) administration of current Opposition Leader Dr. Keith Mitchell had to break term deposits to pay pensions and other benefits.

According to NIS Director, Dorset Cromwell, “We broke eight (8) term deposits totaling EC$14.3 million. In 2022, we broke (6) term deposits totaling EC$14.45 million to do the same. In 2023, we have already broken (8) term deposits totaling EC$22.8 million, and the year is not quite finished yet.”

The one-year-old Congress administration of Prime Minister Dickon Mitchell has alluded to seeing the effects of failing to make changes to the social security scheme as current contributions are less than pay-outs, and has adopted the position that if it fails to make the legislative changes, the NIS will come crumbling down in a few years.

The first change will take effect on January 1, 2024, when the minimum contribution to qualify for a pension will increase to 550. The minimum contribution rate will also move from 500 to 750 by 2028.

The reforms will also see the pension scheme moving away from being an age entitlement.

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