NSSF to pay Shs50b a week for mid-term, says Amongi
Ms Betty Amongi, Minister for Gender, Labour and Social Development. Photo | Frank Baguma
What you need to know:
- Addressing a press conference yesterday, Ms Amongi said in addition to the eligibility criteria set out in the mid-term regulations which she officially released yesterday, two days after this newspaper published the rules, any member who has remitted contributions to the Fund for 120 months, irrespective of whether this was inconsistent, qualifies.
The minister for Gender, Labour and Social Development, Ms Betty Amongi, has said the National Social Security Fund (NSSF) will pay Shs50b a week to mid-term beneficiaries for the next five months, and claimants should start applying on Monday.
Addressing a press conference yesterday, Ms Amongi said in addition to the eligibility criteria set out in the mid-term regulations which she officially released yesterday, two days after this newspaper published the rules, any member who has remitted contributions to the Fund for 120 months, irrespective of whether this was inconsistent, qualifies.
Section 20(A) of the NSSF (Amendment) Act, 2021, that President Museveni signed on January 4, grants savers aged 45 or older and have contributed to the Fund for at least 10 years access to 20 percent of their benefits, while a person with disability, if 40 years or older, is eligible to receive up to half of their savings.
Ms Amongi said there has been “lack of clarity” about the meaning of the expression “contributions to the fund for at least 10 years”.
“Given that a year has 12 months, the meaning of the phrase is that a member should have made at least 120 monthly contributions to the Fund,” she said, adding: “We are not going to say maybe in the middle [of the years] you did not remit [NSSF contributions], that you must be a continuous contributor. No. We will just calculate 120 monthly contributions.”
The minister’s proclamation that members, who either due to job losses or unpaid sabbaticals, staggered remittances to NSSF are eligible for mid-term so long as they have saved for a decade could not readily be corroborated by the Fund’s management.
ALSO READ: NSSF mid-term access rules leak
It also raised a question on whether more savers will now qualify for mid-term access, which presents the possibility that claims may be too many and the Shs1 trillion which NSSF budgeted to pay 93,000 eligible savers, according to its June 2021 statistics will not be enough.
Earlier Mr Matia Kasaija, the Finance minister, said he was worried that the mid-term withdrawals could undercut the Fund’s investments and erode its profitability.
Nonetheless, Parliament enacted the law amid demands by savers saying they needed the money to cushion against Covid-19 pandemic hazards, which included business closures, downsizing, job losses and pay cuts.
Ms Amongi said the pay-out could be made within 14-21 days from the date of application.
The government and Fund expect that processing of claims will not last longer than 45 days from the day of application.
Qualifying members can withdraw 20 percent of their savings in instalments so long as it does not exceed the upper threshold percentage, the minister said, a proclamation that appears to contradict the Fund management’s previous position to pay mid-term claimants in lump sum to minimise administrative overheads and computation errors.
NSSF managing director Richard Byarugaba, in response to our inquiries following the minister’s pronouncement, said he was due yesterday to meet his technical team to finalise the preparations whose outcome he will communicate next Monday.
