CARICOM RECIPROCAL AGREEMENT ON SOCIAL SECURITY. “Move and don’t lose” By Mineva C. Glasgow MBA,LLB Deputy Executive Director St.Vincent and the Grenadines National Insurance Colombia November26,2007. Overview. Social protection for migrant workers and the self-employed. Context
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“Move and don’t lose”
By Mineva C. Glasgow MBA,LLB
Deputy Executive Director
St.Vincent and the Grenadines National Insurance
Two fundamental principles of the Agreement
The aim of the Agreement is not to harmonize member countries social security legislation, but to coordinate their provisions in order to secure the objectives of ensuring that workers receive at least one pension.
To ensure that claimants’ contributions in different countries of CARICOM are aggregated for the purposes of pensions (benefits).
(ii) The institution from which a claimant is entitled to receive a benefit, if he/she were living in the territory of the Contracting Party where that institution is situated; or
Dependants-(i) a member of the family of an insured person and who is dependent on that person; or
(ii) Some person who, though not being such a family member, is recognized as such by the applicable legislation; or
(iii) A surviving spouse of an insured person whether or not dependant on that person. N.B. This includes legal separation.
This article makes it clear that a claimant would be governed by only one contracting state’s law at a time in relation to his/her employment.
If an insured person is employed in one member state (e.g. St.Vincent) and his employer sends him to work in another member state (e.g. St. Lucia) for a period which is not expected to exceed 2 years, the employee will remain insured in St.Vincent. If the work exceeds this time, due to unforeseen circumstances, the laws and regulations of St.Vincent remain applicable until the work is completed, subject to the agreement of the St. Lucian social security institution.
(B) Itinerant Employed Persons-Article 8
If an insured person who lives in one member state (e.g. Grenada), is employed other than in international transport, and he/she follows his/her occupation in 2 or more CARICOM Countries including Grenada he/she will remain insured in the country of residence (Grenada ) in this example. This rule also applies where an insured is employed by two or more employers who have their principal places of business or residence in different countries.
(C) Employees in International Transport-Article 9
A person employed in international transport
In two or more CARICOM countries will be insured in the country where (i) the principal place of business is located;
(ii) A subsidiary, branch or agency of the company is located if the employee is employed by any of these and the location is different from the country of the company’s principal place of business;
(iii) The employee is resident and ordinarily employed, even if the company does not have its principal place of business, nor a branch, subsidiary or agency in that country.
(D) Employees on ships
If an insured person is employed by a company which is his regular employer, either in one country e.g. Antigua, or on board a ship flying the flag of that country e.g. Antigua, and he is sent by that company to work on board a ship flying the flag of another country e.g. Dominica, he will remain insured in Antigua subject to:
(ii) If an insured person follows his occupation in the territorial waters, in a port in one country e.g. Trinidad or on board a ship flying the flag of another country, e.g. Guyana, but he is not a member of the ship’s crew, he will remain insured in the country where he normally follows his occupation i.e. Trinidad in this example.
(III) If the insured is employed on board a ship flying the flag of one country e.g. St. Kitts and Nevis and he is paid by an organization or person having the principal place of business/residence in another country e.g. Jamaica, he will remain insured in Jamaica if he resides there. The company/person paying the remuneration is considered the employer for the purpose of the application of the legislation.
(E) Persons employed in Diplomatic Missions, Consulates and International organizations
The Agreement does not apply to diplomatic agents, consular officers or to persons of equivalent status in international organizations of which a CARICOM country is a member. The regulations for employees on ships and in international transport also apply to members of the service staff of diplomatic missions, consulates or international organizations and persons employed in the private services of officials of such organizations. However, such employees who are nationals of a CARICOM country, which is a sending state may opt to be insured under the S.S. institution where he/she is a national.
This may be referred to as the gateway to the CARICOM Reciprocal Agreement.
Entitlement of the insured (X )to benefits falls under the applicable legislation of each Contracting Party where that person was subject successively or alternatively to the applicable legislation of two or more contracting parties.
e.g. If the insured (X) is subject to the SS legislation of Country Antigua and Barbados either alternatively or successively then X is entitled to the benefit under Antigua and Barbados. X must satisfy the requirements for benefits in both countries. Totalization does NOT apply in this instance.
Where the applicable legislation of a Contracting Party makes entitlement to benefits conditional on the completion of a specified number of insurance periods, the competent institution should take into consideration all the insurance periods completed by the insured (X) in any other Contracting Party to determine whether the condition of serving specified number of insurance periods have been satisfied.
Where the insured (X) satisfies the conditions for benefits in country A but does not satisfy the conditions for benefits in any other country that he serves for example, Country B and Country C-Country B and Country C must pay him or any person claiming through him a portion of his benefits which he would have been entitled to had he satisfied the relevant criteria in Country B and Country C. The payment bears the same ratio ,which the contributions of that person bear to the total qualifying conditions.
A claimant has worked in Countries A,B, and C and satisfies the conditions for entitlement to a benefit in the jurisdiction of Country A, but not in Countries B or C. In the example, the minimum number of contributions required for entitlement to a pension is given as 500.
Claimant’s contribution history
Application-Country A pays a full pension (not required to consider contributions paid in B or C)
Country B will pay a basic pension and will therefore only use contributions paid in other countries to satisfy the requirements for a basic pension-in this case 500 contributions.
The same will apply for Country C
In Country B the basic weekly pension is 40% of average weekly earnings and average weekly earnings in this case is calculated at $200.00, the proportionate basic pension would be calculated as follows:-
40%of &200.00=$80.00=notional pension
Similarly, the proportionate pension paid by Country C would be 200/500
N.B. in countries where there is a provision for a minimum pension and the notional pension is less, it should be upgraded to the minimum pension before calculating the proportionate part.
E.G. If X serves 9 years in SVG and served a total of 30 years altogether: 9/30=0.3. SVG is entitled to pay an amount equal to o.3 of the notional amount payable to X-the notional amount being the nominal or face value amount that is used to calculate payments. This amount generally does not change hands.
A worked example
A claimant has worked in countries A, B and C but does not satisfy the conditions for entitlement to a benefit in any one country.
In this example, the minimum number of contributions required for entitlement to a pension is given as 500.
Claimant’s contribution history
Using the Totalization method in accordance with Article 17, the number of contributions which must be used by each country in calculating a notional pension would be 400+300+200=900
Each country would then calculate its notional pension in accordance with its own legislation and using the 900 contributions as if they had been paid in that country.
The actual amount payable by each country shall bear a direct ratio to the notional amount which the number of contributions paid or credited in that particular country bears to the total number of contributions paid or credited in the three countries.
Country A would therefore pay 4/9 of its notional pension
Similar conditions would apply for Country B and Country C
In any case where provision is made for a minimum pension and the notional pension is less it should be upgraded to the minimum pension and the amount actually paid shall be the proportionate part of the minimum pension.
Benefits(1) Where Country A’s SS Act allows it, invalidity benefits must be converted into old age or retirement pensions where appropriate and the provisions of Articles 16-19 will apply.(2) If X is receiving an invalidity pension from an institution and he becomes entitled to old age or retirement pension he shall continue to receive the invalidity pension from the institution who has a continuing liability to pay him the invalidity pension until the provisions under paragraph 1 becomes applicable and his invalidity pension is converted into old age or retirement pension.