Caricom Reciprocal Agreement

The freedom of movement granted by the CSME to certain categories of employees, the self-employed and their dependents would have been futile if persons, in exercising these rights, risked losing out on social security benefits acquired in their home state. Heads of Social Security Systems were aware of this reality and so in 1997 in collaboration with the respective governments of CARICOM, the CARICOM Reciprocal Agreement was established. The purpose of the agreement is to protect the benefit rights of migrant workers and their dependents by implementing two fundamental principles:
  1. Totalisation (aggregation), for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit of all periods taken into account under the laws of the member countries.
  2. Payment of benefits to persons resident in the territories of member countries.
The following 14 countries signed on to this Agreement:
  • Antigua & Barbuda
  • The Bahamas
  • Barbados
  • Belize
  • Dominica
  • Grenada
  • Guyana
  • Jamaica
  • Monsterrat
  • St. Kitts & Nevis
  • St. Lucia
  • St. Vincent & Grenadines
  • Suriname
  • Trinidad & Tobago
Benefits of the Agreement
  • Freedom of movement of workers & the Self-employed
  • Transferability of benefit rights through the principle of Totalisation
  • Possibility of receiving a pension instead of receiving a grant in a country because of insufficient contributions
  • Opportunity to augment the human resource base of each participating state
Direct Benefits:
  • Invalidity Pension
  • Disablement Pension
  • Old Age Pension
  • Survivors’ Pension
  • Death Benefits in the form of pensions
Checklist
  • Totalisation (adding the contribution weeks in the countries where persons would have worked)
  • Contributions in respect of different categories of migrant workers
  • Submission of claims
  • Documents to accompany claims
Claims for Long-term Benefits

Claims for Long-term benefits must be submitted to the Social Security/NIS Office in the territory where the claimant normally resides, or to the office from which he/she is entitled to receive benefits. Such claims and their accompanying documents must be submitted at the time and in the manner prescribed by the law which that Institution applies.

Procedures for Processing Claims Under the Reciprocal Agreement

Upon obtaining the relevant information required for processing the claim, and having been satisfied that the claimant has met the conditions for benefit entitlement, each territory shall calculate the Notional AmountActual Amount and the Local Amount of benefit which the claimant qualifies for. Notional Amount – This is determined by first adding the total of contributions paid in all the participating states in order to determine the corresponding payable percentage. That percentage is then multiplied by the Claimant’s relevant Average Annual Insurable Earnings. Actual Amount – This is determined by dividing the total contributions paid in the competent state by the total of contributions paid in all the participating states, and multiplying the ration obtained by the Average Annual Insurable Earnings. Local Amount – This is the amount of benefit which would have been paid to the claimant under the Competent State’s local laws if there was no Reciprocal Agreement.

Persons Covered Under the Agreement
  • Insured persons and their dependents
  • Self-employed persons
  • Voluntary Contributors
Voluntary Contributions

The agreement allows for the payment of voluntary contributions. Permission to pay the contributions is dependant on the number of contributions made in the participating states. In other words, the contributions will be added together (this is the concept of totalisation).

Reduction/Forfeiture of Benefits

The benefits will not be reduced, modified, suspended or forfeited if the insured persons or their survivors reside in a state other than where the benefit is payable.

Provisions Determining the Law to be Applied

Persons will be subject to the legislation of the State where he/she is currently employed. If persons are employed on a ship, then the legislation of the State where the ship is registered will apply. In the case of the Self-employed Coverage, persons will be subject to the State where they work. If persons made compulsory contributions in one state and become a voluntary contributor in another, they will be guided by the provisions of the Country where they have made the compulsory contributions. The reciprocal agreement makes provisions for persons in cases where the legislation of more than one of the participating states apply. If you or any insured person is disadvantaged by the application of certain provisions of the agreement, then the relevant authorities could by mutual agreement make exceptions for the application of this convention in the interest of the person(s) affected. This is especially so for diplomats, persons working on ships, voluntary and self-employed contributors and others who reside in countries other than their place of work.

Downloadable Documents:
Details of Insurance Periods completed by Claimant/Deceased Person
Notification of Claim Received
Certificate of Dependency
Industrial Death Benefit Application
Industrial Disablement/Occupational Disease Pension Application
Survivors’ Pension Application
Invalidity Pension Application
Customer Service Questionnaire
Retirement/Age Pension Application

Click here for a claim calculation example.
The following is an example of how a claim under this agreement is calculated: Miss Bernadette Hendyce worked in St. Vincent and the Grenadines, Grenada, and St. Lucia-three Contracting parties under the CARICOM Agreement on Social Security (CASS.). She took early retirement but she turns 60 years on June 14, 2014 and now submits an application for an Age Pension in St. Vincent where she currently lives. The table below gives a summary of her contribution history. Calculate Bernadette’s entitlement under CASS. Data
Country Years No of contributions (weekly) Total Insurable Earnings $
St . Vincent and the Grenadines 1988 14 4200
1989 52 12600
(qualifying contributions for a pension 500 weeks until 2015) 1990 52 13000
1991 52 13500
1992 52 14000
1993 52 14600
1994 26 7500
Total Contributions and Insurable Earnings 286 75,200
Country Years No of contributions (weekly) Total Insurable Earnings $
St. Lucia 1994 26 10,000
(qualifying contributions for a pension 750 weeks) 1995 52 20000
1996 52 25000
1997 52 28000
1998 52 30000
1999 52 32000
2000 10 5000
Total Contributions and Insurable Earnings 296 150,000
Country Years No of contributions (weekly) Total Insurable Earnings $
Grenada 2000 40 13000
(Qualifying contributions for a pension 500 weeks) 2001 52 16000
2002 52 18000
144 47,000
Cumulative contributions 726
Benefits Eligibility
  1. Based on the information, Bernadette does not qualify for a pension in any of the countries. The totalised contributions are 726.
  2. Based on this, Bernadette satisfies the requirements for a pension in St. Vincent and the Grenadines (500) and Grenada (500), but not in St.Lucia (750). However, by virtue of the fact that she qualifies in St, Vincent and Grenada, she will also receive a proportional pension in St. Lucia.
Calculation
  1. St.Vincent and the Grenadines  
Article 19 (2)- Direct ratio to be borne to the notional amount according to the total number of contributions worked in all countries under CASS  To arrive at the Notional amount of pension, therefore, each country must apply the OAP rules in their own jurisdiction: Proportional Pension (SVG): Sum of Insurable Earnings=$75,200 Reference Wages= Best 5 years over working history= $67,000
Year A $12600
Year B $13000
Year C $13500
Year D $14000
Year E $14600
Total $67,000
Average Insurable Earnings (AIE) = 67,000/5=$13,400 Pension is payable at 30% for the first 500 contributions and 1% for each additional 50 contributions over the qualifying amount up to a maximum of 60 %, Totalised contributions=726 translates to an accrual rate of 34% in SVG The weekly notional Amount= AIE x Pension accrual rate                                                    No. of weeks in the YEAR                                              =$13,400 x 34%/52=$87.60 The weekly Pension =Notional Amount x contributions in SVG/Totalised contributions                                       $ 87.60 x 286/726= $34.51
  1. St. Lucia
Pension is payable at 40% for the first 750 contributions and 1% for each additional year up to a maximum of 60% Pension is calculated on the best 5 years in the system  AIE=$ 117,000/5= $23,400 Notional Amount= $23,400 x 40%/52=$180.00 Weekly pension=Notional amount x contributions in St. Lucia/Totalised Contributions =180 x 296/726= $ 73.38
  1. Grenada
Pension is payable at 30 % for the first 500 contributions and 1% for each additional year up to a maximum of 60 % Pension is calculated on the best 3 years of the last fifteen years AIE= $ 47,000/3= $ 15,666.67 Weekly Notional pension =AIE x pension rate/52 = $ 15, 666.67 x 34%/52=$ 102.44 Pension payable (Weekly) =Notional Amount X Contributions in Grenada/ Totalised Contributions = $ 102.44 x 144/726=$20.32 Questions
  1. If Bernadette turned 60 in June 2018 instead, how would her pension be calculated in SVG?
  2. Without the CARICOM Reciprocal Agreement what would have been Bernadette’s situation?
  3. Suppose after Totalisation Bernadette had only amassed 499 contributions, what would have been her fate?

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