Social Security details new benefits
It is expected to be the hot topic on the table at tomorrow’s sitting of the House of Representatives: the proposed amendments to the Social Security scheme. The sticking point of the bill has been the intention of the Social Security Board to increase payroll deductions made by both employees and employers. According to the S.S.B., their actuary reports have been suggesting the idea from 1994. Since that time the only change in contributions was in the year 2000 when the board increased the level of insurable earnings. But reaction to the latest amendments have been strongly negative, especially from the labour unions. To clear the air, today News 5 attempted to speak to the Board’s General Manager, Narda Garcia. But, as the saying goes, if you can’t catch Narda, catch ih shirt. In this case, her shirt was the board’s public relations manager, Marta Hendrikx, who offered details on the proposed changes.
Marta Hendrikx, Manager, Public Relations Dept., S.S.B.
“One is that there will be an increase of one percent on the rate of contributions. So instead of paying seven percent of your insurable earnings, we will now be paying eight percent. And this one additional percent will be split up, half percent will be paid by the employer, half percent by the employee. So, the actual impact is very small on both parties. There’s also an adjustment to the, what we call insurable earnings ceiling. What that is the amount of money that we insure for an employee, the salary scales that we are adding on will bring the scales to sixteen. Let me explain it in this way, up to December 2000, the most anybody could get as a weekly cash benefit, was a hundred and four dollars. So, it didn’t matter if you earned a one hundred dollars or three hundred dollars or five hundred dollars a week. The most you could get is a one hundred and four dollars because the most we insured by law was a one hundred and ten dollars. As of January 2001, that ceiling that insurable earnings ceiling was increased to three hundred and twenty, which meant that we could insure people up to a level of three hundred and twenty and when we pay a benefit in turn, we pay eighty percent of three hundred and twenty, which means you can now get two hundred and fifty-six dollars a week when you need a benefit from Social Security.
Now for someone who is making five hundred or six hundred, two hundred and fifty-six dollars, the benefit is still a far cry from what their earnings are, the money that they are used to working with. And so this proposal will now carry the ceiling up to six hundred and forty, which means that people from between three hundred and twenty dollars up to six hundred and forty will now be better covered under social security. When you collect a benefit now, you will now get up to five hundred and twelve dollars.”
“Last year we paid out twenty-three point seven million in benefits and the projection with this increase would be thirty-four point nine million to be paid out. The projected amount to be collected in contributions from the increases is thirteen million…of that amount eleven point two million is going back as benefits to the people. And what this will do is cover people who previously did not even have an interest in Social Security because the money they were getting was not worth the while.”
“The Social Security scheme is not something where what you put in, you get back. Some of us get more and some of us get none. Some of us get less, some of us get sick very often, some of us get a lot of children and some of us don’t. But you and I might be walking to work and you get hit by car, and we are covered. If they need to spend a hundred thousand dollars on us for medical care, that is what Social Security will do. So what you pay for is in the event that something happens to you.”
The meeting of the House of Representatives gets underway at ten Friday morning.
