Resolution to Amend the National Insurance Benefit and Assistance Regulations (Unemployment Benefit Scheme) by Prime Minister the Rt. Hon. Hubert Ingraham

Mr. Speaker,

The Resolution is in connection with the National Insurance Unemployment benefit scheme. For the benefit of Members, the National Insurance benefit scheme comes into effect in terms of payment out as of Monday.

At the moment under the regulations, the minimum payment that National Insurance can make is $62.31 per week. It has turned out that some people who have claimed ? 130 persons who have made a claim and who appear to be entitled to the benefit ? were paid in respect of wages of less than $122 per week. And the intention is not, therefore, to pay such persons more as an unemployment benefit than they were contributing to National Insurance in respect of.

So for instance, if the average wage is $50, as is the case with some of these people, the unemployment benefit would normally be calculated at $25 (50% of the average wage.)

Application of the proposed amendment would mean that the unemployment benefit payment would be increased to $50 because we are going to pay them on the insurable wage as opposed to the minimum of $62.31. And I think it is eminently fair that if I was only paying on $50 that I should not receive, when I am unemployed, $62.31.

Mr. Speaker,

The number of claims received by the National Insurance Board is, notwithstanding all of the reports in the newspapers and the broadcast media, consistent with what we expected.

I do not know how or where the number 12,000 got into the broadcast and print media, but let me say with great clarity: when we determined to introduce the National Insurance benefit scheme, the actuary and ourselves worked with three possible scenarios.

If the number of persons who came forward were 3,000 which was the lowest number we expected, it would have certain consequences. If it were 5,000 it would have another set of consequences, and the maximum we expected would be 7,000.

We did have a discussion on whether we could also provide persons who were working in the hotel sector and who were on reduced work weeks, and if we included such persons, then we would have, we thought, a maximum of another 4,000 making it a total of $11,000 as a high. We did not go with a scheme to provide a benefit for persons on short work weeks, we kept it confined to its title ? unemployment benefit, and therefore produced a scheme for the unemployed only who were entitled based on the rules we established.

And so therefore, we did not expect there to be more than 7,000 people at a maximum to register, and we are therefore very pleased to the scheme by Bahamians throughout the length and breadth of The Bahamas.

Reads Unemployment Benefit figures as of April 28:

Claims Received:

Location / Claims Received

New Providence - 3,728

Grand Bahamas - 1,473

Family Islands - 362

Total - 5,563

Of all claims approved thus far, 64% are for women, and 62% of them are under the age of 40, it is a very serious statistic. And the average benefit amount that is going to be paid of Monday is $135 per week.

It demonstrates that there are low wage earners in the economy paying on a wage base that is not at the $400 level generally speaking, and therefore arriving at this average of $135.

Reasons for disallowance thus far:

Insufficient contributions over work history

Additional contributions required from employer. These persons? claims would not necessarily be disallowed because the employer did not pay, except their cheques will not be available for them next week. We have to go after the employers to verify they were working for them, discover why we did not get the money and seek to obtain the money, but at the end of the day if they worked for the employers for the relevant period of time, their claims will be honoured. (60% of those disallowed/pending)

Currently in receipt of another NIB benefit or assistance other than disablement and survivors. (Approx. 30 persons). When the payments under the benefit or assistance ends, they would be eligible for the Unemployment Benefit.

Last date of employment prior to July 1st, 2004 (Approx. 30 persons)

Verification by claimant required due to incomplete/inaccurate information on claim. (20% of those disallowed/pending)

At the current rate, the bi-weekly payment amount is going to be $1.3million or $8.45million for the 13-week period.

I might say that I am glad that people understand what we are doing, and that you did not have to register before April 20; you could register afterward as some people have done and are continuing to do.

After the first payments are made next week, others can still claim; it is not a scheme that cuts off next week ? it is a continuing scheme for those who are entitled to it.

Cheque distribution will begin on May 4th ? next Monday. In New Providence, cheques will be available only at NIB Headquarters on Blue Hill Road, while in Grand Bahama and the Family Islands cheques will be available at all Local Offices.

For the first two days, May 4th and May 5th, cheques will be issued by last name in both New Providence and Freeport. Persons with surnames starting from A to L can collect on May 4th and those with last names from M to Z can collect on May 5th. From May 6th, claimants with any last name can collect their cheques.

I am pleased with the cooperation of the public, and I am satisfied that this has been for the benefit of the public, that the actuarial calculations have been in line with reality and that the scheme is affordable and doable.

And barring any unforeseen circumstance we do not yet have to introduce a contribution rate; the $20 million that has been transferred at the moment will last for a sufficient period of time before we have to introduce a contribution rate.

In any event, we will give at least one-month?s notice before it goes into effect.

I so move.

Click here to listen to audio of this resolution from the official FNM website.