|Old age contributory benefit may be a grant or pension.
Old Age Contributory Grant
To qualify for an old age contributory grant one must be at least 65 years of age and have at least 50 contributions credited to one's account.
The amount of an old age contributory grant is a lump sum equal to 6 weeks average insurable weekly earnings for each 50 contributions actually paid or credited to the insured person's account.
Average insurable weekly earnings for the purpose of old age contributory grant is the sum of the insurable earnings on which contributions were based, divided by the number of weeks of contributions.
Old Age Contributory Pension
To qualify for an old age contributory pension one must be 65 years of age, have at least 150 contributions actually paid to one's account, and have at least a total of 500 contributions credited or paid to one's account.
Pension is not tied to retirement nor is there any provision for optional pension at a reduced rate before age 65. If a person qualifies for an old age contributory pension, an old age contributory grant is not payable.
The annual rate of pension is 40% of the average annual insurable earnings of the insured person, supplemented by 1% of the total insurable earnings on which contributions were based subsequent to the first 500 contributions paid or credited, but subject to a maximum of 60% of average annual insurable earnings, and a minimum pension of $105.00 per week.
Average annual insurable earnings for the purpose of an old age contributory pension is the sum of the insurable earnings on which contributions were based during the best three contribution years of the insured person's contributory life, divided by 3.
The supplemental pension is computed by totalling the insurable earnings represented by the contributions in excess of the first 500 and finding 1% of the amount.
The maximum pension, that is basic pension plus supplemental pension, may not exceed 60% of the average annual insurable earnings.
During the contribution life of an insured person, he earned a wage of $250 per week. He had 1200 contributions paid or credited on his behalf of which the first 500 provide a basic pension of $5200 per annum.
2001 - 2002 Copyright National Insurance Scheme,