Self-Employed Overview Plus
Overview of Self-Employed Coverage
On July 1st 1996, self-employed coverage was introduced as part of the Social Security Fund of St. Kitts and Nevis.
In this broadcast, we will take some time to simply give a brief overview of self-employed coverage. And then we will remind you of that all important provision that effectively says, “Comply or Be Denied”.
First of all, who is a self employed person?
You may consider yourself self-employed if you are engaged in work in a trade, business or other work activity for monetary reward, but you are not obliged to report to another person as is the case with an employee working for someone else. In other words you report only to yourself. You do not (as it were) answer to any other person as a superior. You have responsibility for paying yourself from whatever money comes to you through the trade or business. You have control over how you utilize your time. You might even set your own hours of work. In other words you work by your own clock.
The self-employed coverage provided by Social Security ensures that such persons receive similar income insurance protection as enjoyed by employees.
If someone posed the question “Why not leave self-employed persons to themselves?”, we could respond in this way:
Self-employed persons are just as vulnerable to the different vagaries of life as any other persons. In fact in many cases they are even more vulnerable than employees since they often risk their own resources to establish businesses. In the event of difficulty, they not only lose work-related income but also substantial investments of monies and other resources.
Many persons who now present themselves to Social Security for Assistance Pension [as a result of poverty and dire need in their old age] were in fact engaged in self-employment during their active working years. It is true that for many of such persons, they were working at a time when there was no Social Security system in place. Additionally, they were not able to provide for their own income insurance needs from the work that they were doing.
The introduction of self-employed coverage, therefore, was intended to fill the gap in terms of ensuring that that sector enjoys the protection that Social Security affords to all persons.
This is a time when more and more persons are involved in business activity in relatively simple working arrangements and practices on an individual basis. In such situations, self-employed coverage is of the greatest significance. Take for example the case of someone who goes out and invests in a lawn mower and other implements and goes around cutting lawns for whosever will may come. Before you know it this becomes the person’s main or only source of income. What should that person do if faced with a situation of sickness or other contingency? At some stage that person will reach retirement age and will need a secure source of income just like everyone else. This is where self-employed coverage comes in.
I mentioned earlier that it was in 1996 that self-employed coverage started in St. Kitts and Nevis. That is a very significant fact indeed for the simple reason that as at the year 2006 ten years will have elapsed since the beginning of self-employed coverage. Ten years.
Now, if you know anything about Social Security, you will know that ten years is the time period (if you worked straight through) that you can qualify for a pension. What that means for us is that if you had registered as a self employed person in 1996 (at the start of the coverage) and had paid contributions for the very first time to Social Security; and had continued paying over the years, then by July 2006, you will have already qualified for your pension.
Some persons who have paid self-employed contributions are already receiving pensions from Social Security made up of contributions as employees plus contributions as self-employed persons. We look forward to the day when we can say that Social Security is paying its first exclusively self-employed pension.
Let me now take the opportunity to remind you about our “Comply or be denied” provision. The law says that if self-employed persons who are instructed to register and to pay contributions, fail to do so, this could come back to haunt them in later years. They would be denied Assistance Pension if they were to apply for such a pension. In other words “You can’t expect to get out if you had refused to put in.” We will tell you a bit more about Comply or be denied in our next presentation.
If you would like to get more information about the self-employed coverage under Social Security in St. Kitts and Nevis, you may request a copy of our Self-employed Handbook entitled “Information for the Self-Employed” at our offices in Basseterre, St. Kitts and Charlestown, Nevis.