St. John’s Antigua- The Antigua & Barbuda Trade Union Congress (ABTUC) called for government to pay down on its over $500 million debt to Social Security and to reconsider the increase in contribution rates.
A press release from the union said that recommendations to increase the rate that employers and workers pay appear to be an attempt to “relieve the government” of its obligations to the Scheme.
“The ABTUC is of the view that increasing the contributions should not be the first option because this will be an additional burden on workers and employers; bearing in mind that some workers, especially those in the public sector have not received an increase for some years,” the release read.
“The first option should be for government to pay a substantial sum toward its debt of over $500 million. It would be of further benefit to the organisation if the repayment programme in the Memorandum of Understanding (MOU) could be accelerated.”
In 2010, government signed an MOU with Social Security to repay $550 million owed to the scheme. The repayment takes the form of a $330 million bond and $220 million exchange of assets.
“Hurrying to increase the contribution rate will move workers towards the poverty line and bring on more social problems,” the release read.
It also asked government to move to make statutory bodies bring their outstanding payments to Social Security up to date.
In his New Year’s remarks, Prime Minister Baldwin Spencer announced his government’s commitment to addressing the issues within the Social Security Scheme.
He said government would be giving serious consideration to recommendations made by Actuary Derek Osborne and the Social Security board of directors.
Among the recommendations are increased fines and penalties for non-compliant employers, the extension of the retirement age from 60 to 65 and the increase of the maximum insurable income from $4,500 to $6,500 monthly.
In November, the Antigua Trades & Labour Union’s (AT&LU) General Secretary Alrick Daniel denounced the proposed increase in the contribution rate, calling it a “very harsh” measure.
At the time Daniel said the attempt to fix one problem could lead to the creation of another.
“We have to take into consideration our cost of living here. While we may say it’s only two per cent, a lot of people, their income is already less than their expenditure and some are cutting it close,” he said.
The TUC press release ended by asking government not to turn the financial issues facing Social Security into a partisan issue.
“While it easy to point fingers as to who or what brought the organisation to this point, what is certain is that government has responsibility – you accept the assets, you must accept the liabilities,” it stated.
“It is therefore necessary to go further and make critical decisions that would aid in its survival.”