Social Security: new benefits, new costs

The Belize Social Security Board has announced the most sweeping reforms since the Social Security system was inaugurated in 1981. The changes, to be implemented on the first of January, involve a significant increase in the size and scope of benefits for insured workers. At the same time those workers and their employers will be shelling out far higher premiums each payday.

First the benefits:

-All pensions will be immediately increased by twenty percent. The minimum pension will be increased from thirty-five dollars to forty-seven dollars per week.

-The burden of paying workers absent due to sickness or injury will gradually shift from the employers to Social Security. Instead of paying for the first three days of absence, beginning January first the employer will pay only two. That will be reduced to one in 2002 and zero in 2003.

-For verified absences of two weeks or more Social Security will pay the cash benefit from day one.

And speaking of cash, those pensions insured through Social Security will soon see the following improvements in their coverage:

-The maternity grant will triple from one hundred to three hundred dollars per child and the period of maternity allowance will increase from twelve to fourteen weeks.

-The minimum retirement grant will double from four hundred to eight hundred dollars, as will the minimum grants for invalidity and surviving spouse.

-Sickness, injury and maternity cash benefits will increase radically, with minimum payments going from twenty to forty-four dollars weekly and maximum from one hundred and four dollars to two hundred and fifty-six dollars a week. The sickness and injury benefit will also be extended to include Sundays.

-That injury benefit will also be expanded to include coverage for accidents incurred while travelling to and from work. This change is increasingly important as more and more Belizeans commute long distances to their jobs.

And how will these bigger benefits be financed? in short, both workers and employers will pay more. How much more? The key is in the notion of maximum insurable earnings. At present, deductions are based on a maximum insurable salary of one hundred and thirty dollars a week. That sum, perhaps realistic in 1981, will now be increased to three hundred and twenty dollars, more accurately reflecting the level of most workers’ paychecks. But by basing the scheme on a larger salary, the contributions increase dramatically: from a dollar-thirty per employee per week at present to seven ninety-five come the new year. The employer?s contribution will rise a similar six dollars and sixty-five cents from seven-eighty to fourteen-forty-five. While both employee and employer will now split the new costs down the middle, the employer will still be paying almost twice as much as the worker. Previously the employer was contributing six dollars to the Social Security fund for every dollar paid by the employee. With the new changes at Social Security and the expected introduction of the National Health Insurance scheme sometime next year, Belize’s social safety net will have moved from a token expression of intent to a real factor in improving peoples’ lives. As long as the economy can generate the jobs, salaries and profits to support it, the system should be self-sustaining.