Sunday 21st November, 2004

 

Know your NIS benefits

 
 
 
 
 
 
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Money Matters
with Raziah Ahmed

It used to be that the noun “welfare,” used to conjure up a sense of looking after one’s self, one’s health and well-being. Much like the word “mouse” which today conjures up a picture relating to the computer, the word “welfare” is more often perceived as its idiomatic expression “on welfare” and conjures up scenes of deprivation, safety net, and poverty.

When we pay National Insurance Scheme (NIS) contributions, which are compulsory for the working population in Trinidad and Tobago, we are, in fact, paying welfare contributions for the work force. This is essentially insurance! Let us see for what benefits we actually purchase with our contributions.

The primary beneficiaries are workers, and dependants, who during the course of employment, and having made the minimum number of contributions, suffer loss of earnings due to invalidity, maternity, sickness, disability, injury on the job, and those who attain retirement age.

A funeral grant of $4,000 is also paid to people who die while in insurable employment, or while receiving employment injury benefit, or who would have been entitled to receive employment injury benefit. Claimants for this grant must submit evidence, within six months of the insured’s death.

The invalidity benefit is paid to those under age 60, who were actively at work, prior to being certified as an invalid. An invalid is defined by the Act as “a person who is likely to remain incapable of working for a period of not less than 12 months as a result of a specific disease or bodily or mental disablement”.

The maternity benefit takes two forms: an allowance and a grant. Women who will lose earnings due to the pregnancy can claim both. The benefit is paid to insured women between the ages of 16 and 65 years, who paid contributions for 10 of the 13 weeks prior to maternity leave. A grant is paid whether she suffers a loss of earnings or not.

According to the Act, “During the period of maternity leave, an employee is entitled to receive pay from her employer to an amount equivalent to one month’s leave with full pay and two month’s leave with half pay. NIS will pay the difference.

The sickness benefit is paid to people who cannot work or are suspected of having a contagious disease. Such people will have been on sick leave, and will have suffered loss of earnings as a result. It is not paid to people injured on the job.

The employment injury benefit is divided into four categories: injury benefit, disablement, medical expenses and death benefit.

The injury must have arisen in the course of employment by accident, or through an industrial disease linked to the job and must have rendered the person incapable of work.

The disablement benefit compensates the employee for loss of physical or mental faculties, including disfigurement. There are two classes of benefits: a pension payable for the duration of the disability, and a one-time grant.

Medical expenses are paid to the insured who incurs costs for doctor’s fees, drugs, surgery, hospitalisation, physiotherapy, appliances, nursing care, and travelling for treatment, up to a maximum of $15,000.

The death benefit is a periodic payment or one time payment made to the following categories of survivors: widow, disabled widower, children, orphans, and dependant parent.

Those who selected the word “scheme” in the acronym NIS, when they really meant to devise a plan to help those who want to work, but are unable to do so, selected an idiom for “trick, or swindle.” But there is no swindling now, come January 1, 2005, we shall pay contributions at a higher rate.

To be continued next week

n Raziah Ahmed is a registered financial consultant.

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