Saturday, June 15, 2024

Increase in Social Security contributions go into effect in April


The scheduled increase in Social Security contributions goes into effect on Monday, April 4th, translating to a rise from 9% to 10% and raising the insurable wage ceiling from $480 to $520. This upcoming change increases the maximum cash benefit of $416 weekly for short-term benefits and $312 weekly or $16,224 yearly for pensions.

This is the final phase of the Contribution Reform and benefits increase. According to the Social Security Board (SSB), this approach is to improve and provide greater value to beneficiaries during time away from work if they become incapacitated or ill. The SSB believes this is essential for strengthening their program and providing sickness, maternity, disablement, invalidity, injury, death benefits, and pensions to contributors, families, and survivors.

The process has been through a series of consultations which commenced in 2017. According to the SSB, stakeholders agreed that the necessary reforms would be implemented in a phased approach being Phase 1 in July 2019, Phase II in January 2020, and Phase III in January 2021. However, there were delays due to the current COVID-19 pandemic.

The increase was to come into effect in 2021, but the Government of Belize deferred the planned increment due to the health and economic crisis battering the country at the time. At that time, the government organization said that it was committed to working to safeguard and ensure the sustainability of the fund for the benefit of all stakeholders involved.

Although the proposed increase in contributions is about to come into effect, it was not openly welcome initially. Some stakeholders participating in the consultations suggested the government raise the current $3.30 minimum wage instead. Many complained of the low salaries paid in specific jobs and questioned SSB’s handling of the contribution payments. The SSB has justified their decisions stating that their expenditure has exceeded contributions, and if such deficit continues, their fund will become unsustainable.

The entire contribution and benefit schedule is below:

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