Gov't plans to introduce unemployment insurance

 

Unemployment insurance will become a reality for Jamaica.

 

This was announced by Finance Minister Dr. Nigel Clarke, who said before the end of June this year, a US$20 million agreement will be signed with the World Bank towards implementing unemployment insurance on the island.

 

The Ministry of Labour and Social Security will spearhead the process with technical support from the World Bank:

 

"The World Bank will assist us with many things, including the legislative architecture, the institutional mechanisms, administrative arrangements

for unemployment insurance. And Minister [Pearnel] Charles will have charge of this leg," he announced. 

 

Dr. Clarke said a feasibility study was conducted which indicates that workers would need to contribute as little as 0.8% of salary, or as much as 1.5% of salary, with capital contribution from the government of a few billion dollars for the benefit to be provided.

 

Additionally, the Finance Minister said given already existing statutory deductions such as NIS, NHT and Education Tax, the government will give consideration to administratively consolidating these into a single deduction, with the distribution to each entity of its share enshrined in law. 

 

"The major advantage of consolidation, Madam Speaker, in the context of introducing a new benefit like unemployment insurance, is that initial calculation show that we could potentially introduce this benefit without increasing the headline statutory deduction rate, and with no additional cost for up to 95% of persons enrolled in national insurance," Dr. Clarke asserted during his budget presentation in the House of Representatives on Tuesday afternoon.

 

He did not give a timeline for the unemployment scheme to come into effect but said when it becomes a reality, it is likely that employees who contribute to the National Insurance Scheme would be automatically included in unemployment insurance with the requisite obligations and benefits.