News

Prime Minister the Right Honourable Hubert Ingraham this week approved the request from the National Insurance Board (NIB), to close out the interim phase and begin the next, permanent phase of the Unemployment Benefit with effect from June 1, 2010. His authorization is in accordance with the Unemployment Benefit Regulations which allow for the Minister with responsibility for National Insurance to advise on the effective date of the permanent phase of the approved program. This new phase will afford unemployed workers the same level of coverage and benefit provisions as the interim phase, but with different qualifying conditions, and a modest increase in contributions.

In April, 2009, the National Insurance Board (NIB) introduced the interim phase of the Unemployment Benefit, bringing to 10 the number of income-replacing benefits that replace a portion of wages lost when contributors to National Insurance lose employment income for specified reasons. At December 31, 2009, NIB had paid out unemployment benefits nationwide to 14,071 Bahamians, totaling some $20.833 million. During the initial design, NIB recognized the prevailing economic conditions and its impact on the unemployment levels in The Bahamas, and so designed liberal eligibility conditions – including contribution requirements – for the first phase. The intent was to help ease the financial burden of as many unemployed workers as possible. There was no adjustment to the NIB contribution rate.

The permanent phase of Unemployment Benefit requires an adjustment in contributions, and so, on June 1, 2010 – for the first time in the 35-year existence of the National Insurance programme – the rate of contributions will be increased by 1% – one half percent (.50%) to be paid by the employer, and one-half percent (.50) to be paid by the employee. This means that the current rate of 8.8%, shared 5.4% for employer and 3.4% for employee, will change to 9.8%, shared 5.9% for employer, and 3.9% for employee. This translates to a maximum weekly increase of $2 for the employer and $2 for the employee; though relatively slight, this increase represents a further strengthening of our social security safety net.

Additionally, the contribution conditions that must be satisfied to qualify for Unemployment Benefit will change. In this permanent phase, a claimant must have paid at least 52 contributions to National Insurance in his work life. In addition, he must have paid and/or been credited with 13 contributions in the 26 weeks immediately before the week unemployment began, and he must have paid and/or been credited with seven contributions in the 13 weeks immediately before the week unemployment began.

As in Phase I, the benefit will be paid at a rate of 50% of the average insurable income for up to 13-weeks. Cheques will be paid every two weeks.

Leading up to the implementation of the permanent phase of the Unemployment Benefit, NIB will continue to keep the public informed through its ongoing public relations initiatives.