If you’re currently employed, the last thing you may want to hear is that your contribution payments to Social Security Board will increase as of July 1st. The SSB, which collects some 80 million dollars in contributions annually, has been announcing the need for a rate review for several months. The rationale for it, they claim, is that there isn’t enough in the funds to sustain the non-contributory pension for senior citizens.
SSB now plans to roll out the increases in a three period phase.
This three period phase will see the increase jump from 8% to 8.5% in the first period, to 9% in the second phase and up to 10% in the third phase. For someone paid between $140 to $179 weekly, the increase over the period would see contributions go up from $12.80 currently, to $16.00. Someone receiving a salary between $300 and $340, the contributions will increase from $25.60 to a whopping $32. The ceiling for contributions will also be increased from $300 to $500.
Today SSB’s CEO, Dr. Colin Young, discussed SSB’s plans and how it will impact workers.
Dr. Colin Young, CEO, SSB
“The last time the contribution schedule was revised was in 2001and at that time the maximum insurable earning increase from $130.00 a week to $320.00 where it is today. In 2003 there was a 1% increase in the rate that took it from 7% to 8% and what we are doing today seventeen years later is to increase both the sealing which is the maximum insurable weekly earning as well as the rate, they actually recommended that we do that we have to get to the 2% increase in the rate and we need to take the insurable earning to $520.00. Unfortunately we were unable to get the partners to agree to that proposal as is but what we were able to get them to do was to increase in a phase increase and essentially what we are doing is phasing in the rate of two and a half years an phasing in the maximum insurable earnings for three years as well, so simply right now is 8% we want it to go to 8.5% this year, 9% next year and 1% more in 2020, the sealing also goes from $320 to $440.00 this year to $480.00 and in 2021 to $520.00.”
“You also mentioned how the sealing and the rates actually impacts the fund, can you speak to that briefly?”
Dr. Colin Young, CEO, SSB
“Yes, the rate is what is utilized to ensure the sustainability of the fund, the reason is that when the rates increase it doesn’t have a correspondent increase in benefits but when the ceiling increases when the amount of money we insure from the salary increases benefits increase along with that and so very simple at the high end in 2021 for example somebody who is collecting $356.00 today paying at the ceiling if they are paying at the ceiling in 2021 they would be collecting $416.00 a week.”