ALTHOUGH self-employed persons — most of whom are entrepreneurs in small and medium-sized businesses — generate a lot of income and wealth, not many of them contribute to the National Insurance Scheme (NIS).Over the years, change in the structure of the economy has allowed for significant growth of these operations, as well as new and emerging enterprises; but the growth in self-employed persons has not been concomitant with growth in contributors to the NIS, a situation which Finance Minister Dr Ashni Singh said is not good enough.

“I believe that this is reflective of under-participation in the scheme, and I don’t believe that there is any doubt or pretense that there is a significant number of self-employed persons who are not participating in the scheme,” he said.

The law requires participation in the NIS, but this aside, Dr Singh said, insurance is a peculiar thing.

“You don’t think you need it until you actually need it. You might happily go along with your life and think, ‘well, I don’t need insurance’, but then suddenly a calamitous situation falls upon you — a medical emergency perhaps — and indeed, you reach the age of retirement and you discover that you do not work as much as you used to work when you were of employable age…; and suddenly you say ‘hold on a second, who will look after me? How will I live?’

“Well, the law told you a long time ago that you should be setting aside a few dollars, and the NIS rates are not phenomenal or unaffordable to anybody in Guyana today,” Dr Singh declared.

Underscoring the need for self-employed persons to contribute to the NIS, the Minister said one should not wait until a medical emergency arises to realise the importance of being a contributor to the Scheme.

LEGAL OBLIGATION
“There is a legal obligation to participate, but it is in your interest to participate to become eligible for medical benefits and a retirement pension. Those things will not happen automatically, you are expected to participate and contribute to the scheme,” he said.

Guyana, he said, is a very unique country, and is probably among a tiny number of nations the world over where a person, once they reached the appropriate age, could potentially qualify, not for one, but three pensions.

The average Guyanese worker would probably qualify for a post-employment pension at his/her place of employment if the company, whether a private or public sector agency, participates in a pension scheme.

A case in point is the Guyana Public Service Union, which pays a pension to various categories of public servant contributors, including teachers and nurses, when they retire.

An NIS contributor gets an NIS pension when he/she retires and would have made the requisite number of contributions. And without making a single contribution, in the case where he/she attains the age of 65, he/she automatically qualifies for Old Age Pension.

Dr Singh explained that whether a person is employed or self-employed, once that person has been contributing to the scheme, he/she automatically qualifies for NIS benefits.

The law provides for it, he said, noting that Old Age Pension was never intended to be the sole source of income for some in old age.

“Contributing to the NIS might appear as a sacrifice today, because you have to pay a small contribution every month; but you would recognise the value of that sacrifice once you have a medical situation that requires medical insurance, which the NIS provides, and once you achieve pensionable age and become eligible for an NIS pension,” Dr Singh said.

He also called on management of the scheme to escalate public awareness about the value of NIS, so that the masses become fully aware of the immense value of contributing to it (NIS), and to avail themselves of the many benefits.”
It is estimated that some 650,000 employed persons are registered with NIS, but only about 117,000 are active members.

For self-employed persons, the number is more than 29,000 persons, but just around 8500 are active, remitting contributions to the Scheme.

Dr Singh said the task of ensuring a stronger NIS is not only the work of Government; those who benefit and are expected to benefit have a key role to play.

He commended employers who remit their employees’ contributions to the Scheme, and he urged those delinquent ones to change their bad habit.

The Minister explained that delinquents do not only break the law, but they deny their employees valuable contributions in the event they are met with an unfortunate incident.

By Tajeram Mohabir