The Opposition's spokeswoman on seniors has called on Government to bring pension payments in line with the Hospital Insurance Plan (HIP).

Louise Jackson said too many pensioners were struggling to pay their medical costs, as they were billed annually for HIP in April but then had to wait five months to see an increase in their pensions.

Mrs. Jackson was speaking in the House of Assembly on Monday in response to the tabling of the Contributory Pensions (Amendment of Contributions and Benefits) Order 2008 by Finance Minister Paula Cox.

Ms Cox said the Order would make good Government's Budget promise to raise pensions by five percent from August. The increase will be offset by a rise in employer/employee contributions of 6.75 percent.

"This is another indication of Government's commitment to enhance the quality of life of our senior citizens," said Ms Cox. "Through no fault of their own, currently a number of retired persons are not receiving an occupational pension (from their employer) and are therefore relying on their social insurance (from the Contributory Pension Fund) as their sole source of income. This is not an ideal situation and the Government continues to do its utmost to ensure that seniors who rely heavily on their social insurance benefits are cared for suitably."

The basic contributory pension – received by 73 percent of pensioners, will rise from $863.24 to $906.40 per month. At the other end of the scale, the maximum pension of $1,172.5 per month will increase to $1,215.66. Up to 53 percent of the 9,367 seniors covered by the Contributory Pension Fund will receive this amount.

The 6.75 percent increase in employee/employer contributions is equivalent to $3.84 each week.

Ms Cox said the five percent increase in payments was the eighth pension rise under the PLP Government, with the increases exceeding the rates of inflation. And compared to 16 percent in the UK, the maximum payment under Bermuda's pension scheme was equal to 26 percent of Bermudians' average annual earnings.

She said CPF assets are valued at more than $1.3 billion – 14 times the annual projected payout of $92 million in pensions and allowances for the 2008-9 fiscal year. In contrast, assets in Canada were valued at four and a half times the benefits, and in the US the figure was three and a half times the amount.

"During 2007, the Contributory Pension Fund grew by almost $120 million to stand at $1.3 billion," said Ms Cox.

"The Contributory Pension Fund is in good financial shape and is continuing to get stronger in the current market environment."

She added: "We anticipate contributions to exceed benefits for 2007-8 by approximately $12 million."

The Opposition welcomed the rise in payments to seniors, with Shadow Finance Minister Bob Richards saying: "We certainly support this legislation."

But Mrs. Jackson said seniors would not get the increase in their pockets until September and called on Ms Cox to reform the pensions system.

"In April pensioners have to buy their Hospital Insurance Plan and that usually goes up by about 16 percent," she said. "So effectively they are paying this without the benefit of a pension fund.

"For five months they have to pay the increase for HIP, so by the time they get that increase on September 1 they haven't really got it at all.

"It means a lot of people have to give up their hospital plan. So I am just asking the Honourable Member if she could somehow have pensions begin April 1. This seems to be the thing that pensioners are really crying about."

Ms Cox said that Government plans amendments to the Contributory Pensions Act 1970 through legislation in the House of Assembly's second term.

She added: "It's important to note from a factual point of view that over the last five years the increases to pensions have increased over the costs of HIP by two to one."