BELIZE CITY, Wed. Dec. 15, 2021– The phased increase in the total Social Security contributions to be paid by both employers and employees, which had been paused when the Covid-19 pandemic caused a serious disruption to the income of many Belizeans, will now proceed to the final phase, with an additional 1% hike in the contribution rate, after Cabinet gave the green light for that final increase. With that final increase, which comes into effect on January 3, 2022, the Social Security contribution rate will be 10% — the end product of a phased approach to the rate increase that was approved by Cabinet as part of an SSB contribution reform effort in 2019 during the previous UDP administration after a 16-year-period (since 2003) during which no changes had been made to the contribution schedule. The approval was given after consultations were carried out with the various social partners and government agencies in the country, and in July 2019, the first increase in the contribution rate — from 8% to 8.5%— was put into effect. Accompanying that increase was the lifting of the ceiling of insurable earnings from $320 to $440.

In January 2020, the Social Security Board approved the next increase to its contribution rate, raising the 8.5% rate to 9 %, and increasing the wage ceiling by $40 during this second stage, from $440 to $480 weekly. A few months later, the country began to experience the economic impact of the Covid-19 pandemic, and so the next scheduled increase in the Social Security contribution rate was not put into effect that year. Instead, the newly elected PUP government passed SI No. 184, which deferred the increase for one year.

This week, however, an update on the contribution reform page on the SSB website stated that, “On December 14, 2021, based on approval by Cabinet, it was announced” that the final increase in the contribution rate will “become effective January 3, 2022.” Along with that rate increase will be a lifting of the ceiling on insurable earnings to $520, which means that persons earning more than $500 weekly will make a contribution of $23.40, and their employers will pay $28.60 — a total of $52.00 (10% of $520.00)

According to the SSB, the increase in the contributions will ensure the continued viability of the fund, so that there will be enough money available in the long-term to distribute adequate benefits to those who are qualified. “The Social Security Board renews its commitment in delivering a financially suitable program that will continue to provide lifetime coverage to you, our beneficiaries,” stated a release issued by the SSB yesterday. The Prime Minister, Hon. John Briceño, when questioned by a local reporter about the timing of the increase — when many workers are still struggling financially, remarked, “Last year, when we just got into government, we realized we were in a crisis in this country … so we decided to defer it for one year, so everyone knew it was coming one year from now, hoping to give a little settle for businesses in particular … it’s just a continuation, something that had to be done. If we don’t do it now, if [we] don’t do that 1% increase, the numbers have shown by the actuary of Social Security that by 2024, the fund will be in equilibrium, meaning that every dollar we’re collecting we’re paying out a dollar, and that would mean we have to increase the contributions more than 1%, so it’s best we do it now to give the fund a chance to build up, so that’s all we’re doing.”