MLSS And You - Learn More About The NIS

Amin Fagan
Director For International
Social Securty

The Ministry of Labour and Social Security has embarked on a Programme, MLSS and You hosted by Vernon Derby on Nationwide, which seeks to highlight the services which it offers. Today we are here to share with you and your listeners information about the National Insurance Scheme (NIS). 

When most persons hear of the NIS, the first thought is pension, that is retirement pension. But the NIS provides much more than a pension upon retirement. In fact we say “We are here for you, from the womb to the tomb and beyond”.

In fact, the NIS is a full fledge social security programme and as such provides a range of benefits, from maternity allowance; to illness, survivors and death related benefits; as well as health insurance. So there are a range of benefits that contributors may become eligible for long before retirement. 

But qualifying for a benefit requires first of all registration, which can be done at 18 years of age, and then contributing consistently during your working life.

Audrey Deer-Williams
Chief Technical Director
Of Social Services

The NIS was designed in such a way to make it affordable for all workers in Jamaica to contribute. And so we have different contribution rates, including a minimum contribution rate, specifically for the minimum wage earner and persons who have stopped working but have not yet reached the retirement age. This is now $250.00 per week. In addition to the minimum contribution rate, general contributions are based on a defined percentage and capped by the insurable wage ceiling. The rate is now 6% and the wage ceiling is $3 Million.

It is also important to note that the NIS, by virtue of its design, was never constructed with the mandate to provide monetary benefits that will be the only source of income. Instead, it was designed as a minimum guaranteed benefit, to be supplemented by other sources of income. For example, your savings or investment and your pension plan with your employer. And we know, that there are persons who contribute to an occupational pension or in some cases, an IRA.

One can then safely say that the designers of the NIS did a trade off between affordability, that is making it affordable to contribute, and the replacement rate, which is the percentage of your income that is replaced by your pension. Many times we hear persons say that the benefit is small. The truth is, the contribution rate is small, and so the benefits are conservative. When you look at contribution rates in the rest of the Caribbean, our contribution rate is actually the lowest.

Despite that, the NIS is the only pension that many persons will have. So, the take away we at MLSS want to leave with contributors and potential contributors, is the importance of contributing and contributing consistently in order to be able to benefit from the National Insurance Scheme. We also want to encourage persons to check on the status of their contributions to ensure they are indeed remitted to the NIS.