Oran Hall | Unemployed wants to contribute to the NHT

QUESTION: I would like to know how I can become a contributor to the National Housing Trust as an unemployed person at the moment. Do I pay the fee monthly, and where can I pay it?

Tanya

FINANCIAL ADVISER: The current policy is that only employed individuals are required by law to make contributions to the National Housing Trust, NHT, but I will use this opportunity to define, from the point of view of the NHT, who an employee is, what a contribution is, and the types of contributions.

Under the National Housing Trust Act, an employee is someone 18 years of age and over and under the age of retirement and is gainfully occupied in employment.

You are considered an employee if you are:

Employed in Jamaica under any written or oral contract of service or apprenticeship regardless of whether it was expressed or implied.

Employed outside of Jamaica under any written or oral contract of service or apprenticeship regardless of whether it was expressed or implied, by a person/company/business domiciled, or based in Jamaica.

Employed as a master or a member or in any other capacity as part of the crew of any vessel registered in Jamaica or any other vessel of which the managing owner or manager resides or has his/her principal place of business in Jamaica.

Employed as a pilot, commander, navigator, crew member or in any other capacity aboard any aircraft flying the Jamaican flag.

Employed (as a citizen of Jamaica) outside of Jamaica by a Jamaican embassy, Jamaican high commission, Jamaican consulate, Jamaican business/company (meaning one that was incorporated in Jamaica), or a resident abroad.

Serving as a member of the Jamaica Defence Force.

Employed under a contract of service by your spouse.

A contribution refers to an amount that is payable to the NHT in accordance with the law while a contributor is an employed person whether employed by an organisation or self-employed or an employer or someone who is not liable to pay contributions but has applied for and has been granted the authorisation to make voluntary contributions.

Contributors may or may not be Jamaican citizens and must be earning at least the minimum wage. Individuals employed by a company are required to pay 2 per cent of gross earnings as NHT contributions.

Voluntary contributors are individuals who are not mandated by Jamaican law to contribute to the NHT and who do not earn an income in Jamaica but wish to make contribution payments to the Trust. To become a voluntary contributor, an individual should register with the NHT. The contribution rate of these persons is 3 per cent.

The NHT recognises the following as self-employed persons:

- Persons residing and working in Jamaica but not making contributions to the NHT, but they must first register as self-employed persons with the NHT to be able to make their contributions

- Individuals working for themselves, who may or may not have anyone else working for them, or who have employees who are not required by law to make NHT contributions.

- Persons who are already earning and contributing under the regular payroll of a company or agency but who are also involved in additional income earning activities.

- Persons employed to registered companies as private consultants/contractors, that is, persons employed under a contract for service who, for example, provide their own tools and other resources to do the job.

- Directors of companies who are paid director's fees.

These persons pay 3 per cent of gross earnings as NHT contributions.

There are other categories of self-employed persons:

- Jamaican citizens employed to embassies, United Nations agencies, high commissions, and consulates situated in Jamaica.

- Domestic workers, gardeners, and local caregivers who work in the homes of their employers.

These individuals generally pay 2 per cent of gross earnings as NHT contributions.

There are several benefits that contributors can reap by contributing to the NHT, including loans to assist in purchasing, building, or improving a home, In addition to housing benefits, contributors are entitled to access a refund, with interest, of payments made to the Trust.

To qualify for an NHT benefit, an individual must be currently contributing to the Trust; have made at least 52 weekly contributions of which 13 must have been made in the last 26 weeks, just before the date of applying for the benefit; have paid up with interest any outstanding contributions due in the last three years; be between the ages of 18 and 65; and be earning sufficient income to repay the loan.

Only contributors to the National Housing Trust qualify for benefits, so I understand why you would want to be a contributor. If you are able to create employment for yourself, you should be able to make contributions to the NHT.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com