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Parliament approves 20% mid-term access of NSSF savings

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Parliament approves 20% mid-term access of NSSF savings
Speaker of Parliament Jacob Oulanyah

Parliament has approved 20 per cent mid-term access of National Social Security Fund (NSSF) benefits to individuals who are 45 years and above who have saved with the fund for 10 years.

The clause was approved yesterday during the plenary chaired by the speaker of parliament Jacob Oulanyah. According to the Bill, The commencement date will be set in the statutory instrument; supervision of the fund is by the Ministry of Finance, while the NSSF Managing Director (MD) is a member of the Board of directors.

During the plenary, MPs adopted the clause of NSSF being housed in the Ministry of Gender, Labour and Social Development instead of Ministry of Finance Planning and Economic Development and also supervise its assets.

In 2019, the government tabled the NSSF Amendment Bill seeking to expand social security coverage, enhance the spectrum of benefits available to workers and improve governance of the Fund. The Bill was passed by parliament in February 2021.

In August, President Yoweri Museveni agreed to the workers mid-term access to their savings in the National Social Security fund and directed the Minister for Gender, Labour and Social Development Betty Amongi to make changes to the bill and return it for consent.

Every month, institutions deduct 5 per cent of employees’ salaries as contribution to NSSF, the employers tops it up with 10 per cent while NSSF earns them 12 per cent. The fund collects Shs 125 billion a month, Shs 1.5 trillion per year and pays up to Shs 900 billion for members qualifying in other benefits.

The proposed NSSF Amendment Bill, 2019 proposes a tax exemption at contribution by the member, at investment by the fund and proposes a tax on the accumulated members’ contribution as well as the interest earned on the savings at withdrawal.

The bill also seeks to provide for mandatory contributions of all workers regardless of the size of the enterprise or number of employees; and to provide for voluntary contributions to the Fund; proposes a tax on members’ retirement benefits.