Created: Jul 02, 2022 07:42
Elderly pension payments are set to rise by 2.75%, the increase dating back almost a year, MPs heard yesterday.
David Burt, Prime Minister and Minister for Finance, told the House of Assembly that the rise “fully covers the overall rate of inflation, but also allows some recognition of the specific impact on older people with limited incomes in due to rising food prices.
The pension increase is retroactive to August 16, 2021.
Burt said the increase would take the basic contributory pensions from $1,077.14 per month to $1,106.75 and the maximum contributory pension from $1,564.18 to $1,607.19 per month.
“As this increase will be backdated, the 10,000 residents receiving Social Insurance benefits will also receive a lump sum payment of up to $473.11,” Burt said.
“This increase means that seniors will receive between $355 and $516 more each year.”
The remarks came as he filed the Contributory Pensions (Benefits Amendment) Order 2022.
Mr Burt said the retroactive payment would cost pension funds $4.4million “in the short term”.
But he said the benefit hike would have “a slight negative impact” on the long-term fund, according to the government actuary.
The 2018 Speech from the Throne included a commitment for the island’s social insurance system to move from a flat-rate contribution to “contribution based on a percentage of income”, Mr Burt said.
He added that the Contributory Pension Fund had been assessed earlier this year with a review of “how to close funding gaps”.
Mr Burt said aligning social insurance contributions with income would increase the take-home pay of low-income workers while keeping the pension fund “sustainable for future generations”.
He added: “It’s the right and proper thing to do.”
· To read Mr. Burt’s statement, click on the PDF under “Related Media”.