In our last presentation we spoke about a number of different scenarios in which persons may be entitled to pay voluntary contributions. And then of course we promised to go ahead some more and tell you something about:
- the stipulation of Long Term Benefits only
- the rate of contributions
- the calculation of the amount
- the time frame for applying
- and the time for payment.
In looking at Long Term Benefits Only
You must always bear in mind that short-term benefits (such as Sickness and Maternity Benefits) are not available to you during the time of voluntary contributions. Voluntary contributions are meant to assist you in enhancing your long term pension entitlements such as Age and Survivors Benefits.
As a voluntary contributor (and therefore not being in employment at the time) there is no possibility of becoming entitled to the short-term benefits, since such benefits are compensations for loss of earnings due to incapacity. For short term benefits you would have had to be working one day and then become incapacitated the next, to be able claim such benefits.
What Rate of Contribution applies to a Voluntary contributor?
As a person who is paying voluntary contributions, you do not have to pay the same full 11 percent contribution that is payable on behalf of someone who is working, since as we said earlier you are not entitled to short-term benefits during that time. The voluntary contributions payable by someone who is not working is at the rate of 5 percent only and works towards enhancing the long-term benefits.
Calculation of your Contribution Amount
When you apply for and obtain a Certificate of Voluntary Insurance, the Social Security Office will calculate the specific amount to be paid by you. This would be based on certain specific factors.
In the first place, in order for you to be eligible to pay Voluntary Contributions, you must have at least 104 contribution weeks on your record. At the point where you apply for a Certificate of Voluntary Insurance, Social Security will trace back the period of two years or 104 weeks immediately before the time you stopped working, or the time when you ceased to be eligible to pay regular contributions. Your total wages earned during that period will be added and then divided by two to provide what is called the average annual wages.
By computing 5 percent of the Average Annual Wages, Social Security will arrive at a figure that represents your rate of contributions per annum. When this rate of contributions per annum is divided by 52, you will then arrive at your weekly rate of contributions.
Time Frame for Applying for Certificate of Voluntary Insurance
You will need to apply for the Certificate within thirteen weeks after your last normal contribution. If you allow that 13 weeks to pass, you would not under normal circumstances be allowed to pay Voluntary Contributions. It is important to be always on the alert so that you apply within the 13 week period.
Time of Payment of Voluntary Contributions
Paying voluntary contributions on time is extremely important. Your entitlement to pay voluntary contributions will automatically lapse if you fail to pay a contribution on time.
To make things easier for the voluntary contributor, Social Security will allow payments in advance. In this way a contributor will not be under stress to remember to pay every month.
For more detailed information on this area of Social Security or for guidance on your particular case, you may contact your Social Security Offices on the Bay Road in Basseterre, St. Kitts and on Chapel Street in Charlestown, Nevis.
“We keep looking up for your benefits”!