DPM defends $11.4 million extension to unemployment assistance

DPM defends $11.4 million extension to unemployment assistance
Deputy Prime Minister and Minister of Finance K Peter Turnquest

NASSAU, BAHAMAS – Government is seeking to extend unemployment assistance to persons impacted by Hurricane Dorian ‘as long as we can’, according to Deputy Prime Minister K. Peter Turnquest.

Turnquest made the commitment as he outlined the rationale behind the $11.4 million allocation of the benefit.

He told Eyewitness News: “National Insurance is funded by our contributions and there is no secret that the fund has been under pressure for a number of years.

“The fund is built around thirteen weeks of unemployment. To extend it up to 26 weeks means it has to be funded from somewhere.”

Turnquest continued: “We recognize there are a number of persons in the devastated areas who would have lost their jobs through total destruction of their business, businesses which decided that the critical mass was no longer present and they shut down for a time leaving some of these talented people unemployed and without an income.

“We wanted to extend it as long as we can to sustain themselves during that period while the infrastructure is being built back.”

Turnquest noted last week that $82.7 million in recurrent expenses is associated with Hurricane Dorian.

Expenses include: $23.1 million in costs associated with clean-up activities; $12.9 million to facilitate food and accommodation assistance programmes; $11.4 million to fund the extension of the unemployment benefit to eligible persons; $11.1 million in allowances for affected public staff; $5.4 million for the acquisition of supplies and materials; a $1.5 million allocation to the new Ministry of Disaster Preparedness, Management and Reconstruction; and the remaining $17.3 million allocated to primarily cover contingencies, consultancy services, security and other  costs, he said.

Turnquest acknowledged the discussion over a potential NIB rate increase which numerous actuarial reviews have suggested.

“This is not a new issue,” he said.

“Actuarial studies have shown that the fund is underfunded that creates a challenge. As the population ages there is more demand on the fund and contribution levels need to pick up pace to the needs.”

Numerous actuarial reviews have called for NIB contribution rates to increase as a way to sustain the fund given projections that its $1.6 billion reserve will be exhausted by 2030.