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Low NIS registration rate for informal employment


The farming sector and other informal employment dominated sectors have a very low registration rate at the National Insurance Services (NIS).{{more}}

Trevor Hamilton and Associates, International Management Consultants, made this disclosure in a report ‘On the Labour Market and Investment Study in St.Vincent and the Grenadines’, submitted to Invest SVG.

The farming sector, which represents many small-scale farmers, subsistence farmers and farm employees, are not significantly registered with the NIS. In fact, said the report, in 2008, the NIS had only 531 persons in agriculture in its portfolio of 37,679 active NIS registrants.

“This is grossly understated, especially since agriculture is the largest non-government source of employment in SVG. The data, therefore, cannot be credible with 531 farm personnel, while manufacturing, financial services, commerce, hotels/restaurants, and construction are each employing: 2,183, 1,239, 4,277, and 2,776, respectively,” the consultants pointed out.

The informal employment dominated sectors with very low registration rates at the NIS include: ground transport, private households, and construction.

The consultants estimate workforce personnel with informal employment arrangements that are not registered with NIS to be in the region of 11,321. This represents about 23 per cent of the workforce, while the NIS registrants represent 77 per cent of the work force.

The NIS aims to provide social security protection to all nationals of St. Vincent and the Grenadines and in the Diaspora. This is demonstrated through the provision of benefits to contributors such as sickness, maternity, invalidity, employment injury, funeral and Survivors. These benefits are financed by contributions paid by members and investment returns.

Under the NIS Act, all workers in St. Vincent and the Grenadines are mandated to make contributions to the NIS. Currently, the total rate of contribution is 8 per cent of insurable earnings. Of this total rate, the employee is required to pay 3.5 percent, while the employer plays 4.5 percent. The contribution rate for a self-employed contributor and a voluntary contributor is 7.5 percent and 6.84 percent, respectively.

The National Insurance Services (formerly called the National Insurance Scheme) became operational on January 5, 1987. The institution falls under the portfolio of the Minister of Finance and is governed by a nine-member board of Directors.