Friday, February 23, 2018

Colm: $25,000 'gift' unfair

Self-employed to pay NIS...

Self-employed people must now pay national insurance.

Government yesterday brought legislation making it compulsory for self-employed people, (who now number 130,890 and who represent 23 per cent of the total labour force) to be part of the NIS system.

The system is supposed to be implemented from March 4, 2013, according to the bill.

Piloting the Finance Bill 2013, however, Finance Minister Larry Howai made no mention of this fact even though Clause 6 of the bill clearly states that it would establish a "compulsory system of national insurance for self-employed persons".

Howai piloted the bill during the sitting of the House of Representatives, Tower D, Waterfront Centre, Port of Spain.

Opposition MP Colm Imbert slammed the Minister for "slipping in such fundamental changes to the National Insurance system without explaining..."any of the things that he is doing" via the legislation.

Imbert said it was therefore incumbent on the Opposition to tell the national community that the bill "included for the first time a section dealing with compulsory registration of self-employed persons". Imbert said when he saw that measure he wondered whether the bill also had the relevant clause stating that it required a special majority.

"How can you tell a self-employed person that they must pay national insurance even if they don't want to, unless you pass this law with a special majority?...You are infringing people's fundamental rights and therefore it requires a special majority," he said.

Imbert added because the bill amended so many pieces of legislation, it no longer qualified as a money bill and therefore needed the approval of the Senate. He noted that the original National Insurance Act, Act 32 of 1971, was passed by a special majority.

Imbert said what was even more noteworthy was the fact that the bill proposed to have "persons who have never paid a single national insurance contribution who are between the ages of 51 and 56 receive age credits".

This, he said, translated into giving each person a grant which amounted to the value of 900 contributions. Noting there were some 30,607 self-employed persons between the ages of 51 and 56, Imbert said this would amount to an additional $1.5 billion which the Government would have to pay to the self-employed.

He said there would be an enormous effect on the National Insurance Fund.

"We have the actuarial review and the Minister himself admitting that the National Insurance Fund is underfunded and does not have enough money to meet all of the contributions (benefit payments) at this point in time, and he says we are going to manage it by a small increase of 0.1 per cent and 0.5 per cent (in contributions). And then he slips in these self-employed persons and says they would be getting age credits which works out to $1.5 billion. Where is this money coming from? And why should someone who has never made a contribution in their life be in receipt of a retirement grant of $25,000?" Imbert asked.

"What about all the people who have been paying their contributions, how come they are not getting a gift of $25,000? Imbert said this grant was "inequitable, unfair and discriminatory" to the people who have been paying NIS for 20 and 30 years.

Imbert said to top it all, "The Minister spoke as though none of this exists. He completely avoided all of this. He never explained this."

Imbert also noted that the CLICO Investment Fund which was launched with much fanfare a few weeks ago had already lost ten per cent of its original value. He asked whether Government told the the people who exchanged units for bonds that they would lose money within days.

"It is down to 90 cents on the dollar and who knows where it would go," he said.