By Jerry Roker
for Bahamas Press
It is my view that self-employed persons — most of whom are entrepreneurs in small and medium-sized businesses — generate a lot of income and wealth, but not many of them contribute to the National Insurance Scheme (NIS). Over the years, change in the structure of the economy has allowed for significant growth of these operations, as well as new and emerging enterprises; but the growth in self-employed persons has not been concomitant with growth in contributors to the NIS.
This is a situation which all Ministers with responsibility for NIS speak to from time to time.
The law requires participation in the NIS, but this aside, insurance is a peculiar thing. You don’t think you need it until you actually need it. You might happily go along with your life and think, ‘well, I don’t need insurance’, but then suddenly a calamitous situation falls upon you — a medical emergency perhaps — and indeed, you reach the age of retirement and you discover that you do not work as much as you used to work when you were of employable age…; and suddenly you say ‘hold on a second, who will look after me? How will I live?’
Well, the law told you a long time ago that you should be setting aside a few dollars, and the NIS rates are not phenomenal or unaffordable to anybody in The Bahamas today. One should not wait until a medical emergency arises to realise the importance of being a contributor to the Scheme.
There is a legal obligation to participate, but it is in your interest to participate to become eligible for medical benefits and a retirement pension. Those things will not happen automatically, you are expected to participate and contribute to the scheme.
An NIS contributor gets an NIS pension when he/she retires and would have made the requisite number of contributions. And without making a single contribution, in the case where he/she attains the age of 65, he/she automatically qualifies for Old Age Pension, provided they past a means test. Whether a person is employed or self-employed, once that person has been contributing to the scheme, he/she automatically qualifies for NIS benefits. The law provides for it, Old Age Pension was never intended to be the sole source of income for some in old age.
Trust me, contributing to the NIS might appear as a sacrifice today, because you have to pay a small contribution every month; but you would recognise the value of that sacrifice once you have a medical situation. And once you achieve pensionable age you become eligible for an NIS pension.
The number of horror stories I have been exposed to within the past 5 years or so, served to solidify my long time belief that NIS stands out as the best thing that has happened for the poor and not so poor people of our country, in our history. Next up, will be National Health Insurance.
I wish to, therefore, entreat all self-employed persons to develop the discipline to contribute to NIS, not only because of the benefits attached to doing so, but, after all, it is the law!