Unemployment Fund drained in 2020
Acting Director of National Insurance Scheme (NIS), Jennifer Hunte, says the Unemployment Fund was exhausted in 2020 and had to be refinanced from the NIS Fund.
During Wednesday’s COVID-19 management update which focused on the theme COVID-19: Your Workplace and You, Hunte said the overall NIS portfolio remained strong and the organisation would continue to meet its obligations to Barbadian workers.
She revealed that from 2017 through 2019, the NIS paid $32.8 million, $38.1 million and $49.3 million, respectively, from the Unemployment Fund, but in 2020 they disbursed $155.5 million.
“So comparatively, you can see the impact of COVID-19 on the future in 2020,” she said.
After the Unemployment Fund ran dry fulfilling about 38 000 claims, the Board utilised money from the NIS Fund to top it up so benefits could continue to be paid. That was done through the early redemption of Government bonds and this is how the fund will continue to be financed in the short term.
Hunte said the Unemployment Fund would need to be recapitalised and the money repaid to the NIS Fund. Those matters remain under discussion and figures are being finalised with the Ministry of Finance.
The NIS also made large payments from the Severance Fund.
In 2020, $18.3 million was paid to workers whose employers did not pay severance and $3 million in rebates to those companies which met their obligations and qualified for a 25 per cent refund. The previous year, the respective payments were $21.2 and $6.5 million.
The NIS also manages the Catastrophe Fund, which has $4 million; the Retraining Account, which has $1.6 million; and the Sugar Workers’ Provident Fund which has $15 842.
Overall, the NIS has an investment portfolio of $3.8 billion, Hunte noted. (SAT)