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Monday, 18 October, 2021
HomeThe Big StoriesSocial Security hopeful for 2021 collections despite business closures

Social Security hopeful for 2021 collections despite business closures

By Elesha George

[email protected]

The government has reported that revenues at the airport have fallen, as the number of arriving passengers have declined, but the Director of Social Security, David Matthias remains resolute in his belief that revenue collection will improve this year.

Roughly 11,000 of the 49,531 actively employed persons lost their jobs or were temporarily laid off last year, leaving the scheme unable to pay pensions and short-term benefits on time. That equalled to a near 60 per cent decline in total contributions which ranged between $130-$140 million in 2019.

However, Matthias is confident that the scheme will be better able to meet its obligations this year, despite ongoing restrictions and closures of several businesses, including hotels – a major contributor to the scheme.

He explained that there was a “significant dip” in contributions in 2020 but said that provisional figures now show an increase in persons who have rejoined the work force.

“At the start of 2021, we’ve seen those figures come back up to where we have 43,000 persons being the active insured population. What that shows me is that there has been narrowing in that there are persons who have gone back to work that may have been driven primarily by the fact that we have some 33 hotel properties that would have been operating,” Matthias explained.

Some of these hotel properties have since announced closures due to travel restrictions in the twin island’s main tourist markets like Canada, the United Kingdom and the United States of America.

“What would be concerning for me is transport, because international transport is going to then again change, which is again going to impact the hotels,” he said.

In addition, state restrictions that have forced a number of businesses to close for the next few weeks will mean a decrease in contributions.

“It does mean that there is going to be heavier call on the government and then there has to be a greater focus on our third area for contributions, which is to look at those arrears or payment arrangements that we have to make sure that they are performing and super performing,” he said.

According to Matthias, the combination of both benefits inclusive of administrative expenses require at least $14 million per month to remain operational.

Currently, the scheme’s primary source of revenue is subsidised by the government, which provides millions of additional funds each month to pay pensioners.

Efforts by management to keep the scheme viable has resulted in a decision of late salaries for staff, who Matthias said had not yet received January salaries because they have chosen to “share the burden” with the pension population.

“It is a heroic stretch to assume that businesses are going to have the wherewithal throughout this economic crisis to realistically pay greater than that which they have been paying up until now but we believe our responsibility to the people is such that we do need to examine all areas of potential income gain,” he surmised.

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