National

NIB Rate Hike: How Did We Get Here?

NASSAU, BAHAMAS – For decades, it’s been said that the National Insurance Board is challenged.

Published

5 months ago

July 1, 2024

Italia Hall

NASSAU, BAHAMAS – For decades, it’s been said that the National Insurance Board is challenged. Shortly after the Davis administration came into office in 2021, there were talks about a possible rate increase for national insurance.

The then-State Minister responsible for the National Insurance Board, Myles Laroda, revealed the fund stands to lose $95 million if the rate doesn’t increase. There has only been one rate increase since NIB started in 1974. In 2010, the rate increased from 8.8 to 9.8%.

In February 2023, the cabinet reviewed a proposal prepared by the National Insurance Board. Laroda told parliamentarians in March 2023 that the government made a decision. Initially, NIB Minister Alfred Sears said the first increase of 1.5 percent would take effect on July 1st, and incremental increases would continue every two years for the foreseeable future. That news sparked heavy criticism from the public, and the Office of the Prime Minister quickly addressed concerns, saying no such decision had been made.

Most recently, the opposition slammed the government for what they say is a lack of public education and failure to respond to the concerns of residents. Some business owners have said the increase could negatively impact their businesses, but the Prime Minister shares a different view. Former National Insurance Minister Shane Gibson also shared his candid views earlier this year, saying he believes the government is making the right decision.

While some say the move is necessary, others, like Bahamas Public Services Union leader Kimsley Ferguson, predict the hike will mostly impact minimum wage workers.

As for what’s next? Some say it’s all about planning and budgeting. Precious Fortune Thompson, Executive Director of ISBET, emphasized the importance of financial planning to manage the changes.