The National Insurance Scheme (NIS) has announced an increase in the insurable income ceiling and the minimum pension.
A notice in yesterday’s Sunday Chronicle said that the minimum rate for old age invalidity pension will be hiked from $18,829 per month to $19,770 per month from January 1st, 2014.
The insurable income ceiling which is the upper limit on earnings that attract NIS contributions will move from $150,628 to $158,159 per month or from $34,760 to $36,498 per week from January 1st, 2014.
The increase in the minimum insurable earnings ceiling for the self-employed will move from $47, 032 per month to $49,384 per month from 1st January, 2014, the notice said.
This is the second increase in the insurable income ceiling in less than a year. Effective March 1, 2013, the ceiling increased by 5% with insurable earnings being set at $150,628 per month and $34,760 weekly.
The NIS which is now facing the likelihood of annual deficits has been under pressure to raise the insurable income ceiling among a clutch of measures to bolster its financial viability.
The Eighth Actuarial Review of the Scheme last year declared that the NIS was nearing a crisis and immediate steps were required to pull it back from the brink including raising the contribution rate from 13% to 15% no later than January 2013, hiking the insurable income ceiling to $200,000 per month, freezing pension increases and raising in a phased manner the pensionable age from 60 to 65.
A raft of other measures was enunciated in the report which set out the jeopardy faced by the Scheme and other dangers such as an unbalanced investment portfolio and a low number of contributors.
