A decision by the government to fully reopen the public sector after the nationwide lockdown in April and its further decision to incrementally supplement contributions to the Social Security Scheme, have led to roughly 9,000 pensioners receiving their monthly benefits on time.
There are 11,000 pensioners island wide and, to date, the majority has been paid for the month of September, despite cash constraints experienced by the Antigua and Barbuda Social Security Board (ABSSB).
Director of the Board, David Matthias, said the public sector has emerged as the leading contributor to the scheme, after Covid-19 forced the premature closure of hotels and the cruise season, which previously contributed the most money to the scheme.
“At EC$3.2 million, government represents almost 70 percent of the total amount collected … there is absolutely no way that in these past few months we would have been able to discharge our obligations to the people of Antigua and Barbuda without the timely payments of the government,” he told Observer.
Matthias shared that greater emphasis is being placed on the government because it has strategically decided that it will not allow the pandemic to affect its hours of work or its level of employment and as such it has become the single largest entity currently contributing to social security.
However, despite its efforts, the government’s intervention has not been enough to stop 1,700 pensioners from twice receiving late payments.
To date, the ABSSB has yet to discharge the September payout of $1.92 million to pensioners who bank with the Antigua Commercial Bank (ACB).
The board usually operates using an inversion method, meaning that the last bank to be paid in one month would be among the first to be paid the following month. However, the scheme has had to change its strategy to ensure that the maximum number of pensioners are paid at any given time. This strategy has however resulted in ACB pensioners being paid late for two consecutive months as a result.
The ACB and the Bank of Nova Scotia – Bank of Nova Scotia being number one and ACB being number two – Matthias said, service the largest number of pensioners on the island.
He told Observer that, “regrettably, owing to slowing cash flows, we have not been able to cover the amounts owed to this institution to date. Every effort is being done to ensure that it can be done before the lapse of this week”.
Matthias has promised that in the coming months the ABSSB will attempt to ensure that ACB pensioners receive more timely payments, noting that “it is virtually impossible for one to be more timely when you’ve lost close to 60 percent of your revenue through something you have absolutely no control over”.
All the scheme can do now is to remain hopeful that the strategies being implemented will reap benefits in the coming months and into 2021.
However, that change will depend heavily on increased business within the tourism industry. The more people who go back to work, the more funds the scheme can collect each month.
“It should always be understood that what is being collected today actually pays the benefit today. It’s not a funded operation. It is a pay as you go.
“It therefore means that when there’s a significant contraction in the economy, that is to say less persons are working or less persons are contributing, it can only mean less income coming in to social security, thus impacting our ability to make payments at that time,” Matthias said.
Pre-lockdown — from January 2020 to March 2020 — the scheme had been making timely payments to all 11,000 of its beneficiaries at an amount of EC$11 million. For the past five months, the average collection has dwindled to around EC$4 million per month.