Increase in Social Security contributions deferred again
Tuesday, January 4th, 2022
The scheduled increase in Social Security contributions that was to take place on January 3rd is postponed until April 4, 2022. The contributions rate will increase from 9% to 10% and raise the insurable wage ceiling from $480 to $520.
The increase was to come into effect in 2021, but the Government of Belize deferred the planned increment due to the pandemic. The Social Security Board (SSB) added that the decision against such an increase was due to the negative effect on employment at that time. The announcement of the postponed increments was made official on Monday, January 3rd, via a release from the SSB. The note explains that the reason to raise the contributions is to improve the adequacy of benefits paid to employees and their families and, most importantly, to provide lifetime retirement benefits. The government organization said it is committed to working to safeguard and ensure the sustainability of the fund for the benefit of all stakeholders involved.
The process has been through 18 months 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. It did not take place in 2021 due to the current pandemic.
This idea to increase the contributions does not sit well with everybody. In the past, some have suggested that instead of raising the amount to be deducted, the government should raise the minimum wage. Many complain of the low salaries paid in specific jobs and question SSB’s handling of the contribution payments. The SSB has indicated on previous occasions that their expenditure has exceeded contributions, and if such deficit continues, it will become unsustainable.
The SSB maintains that when the proposed increment in contributions goes into effect, all persons’ benefits in the wage ceiling will also increase. The schedule of assistance and benefits is available on the SSB’s website at www.socialsecurity.org.bz.
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