Government is chasing some 5,541 delinquent employers or self-employed people owing $15 million in pension contributions which are more than three months in arrears.

That was revealed in the Contributory Pensions Amendment Act 2008 passed in the House of Assembly yesterday. Finance Minister Paula Cox said the money owed should be in the Contributory Pension Fund earning investment income and raised concerns that many of these companies were deducting the contributions from their employees' pay cheques and were using them for personal or working capital purposes.

"This situation obviously has a negative effect on the government's finances and in the case of pension contributions, reduces individuals' pensions when they retire," she said.

"This practice is also unfair to individuals and companies that do pay their taxes and pension contributions on a timely basis. This is totally unacceptable corporate behaviour and must be prevented."

The fines for breaking the law will also rise from $250 to $1,000, with the Department of Social Insurance being handed more powers to enforce the provisions and improve debt collection. The Department, which has four inspectors and a compliance officer, is also looking at forming a dedicated debt recovery section, said Ms. Cox.

Meanwhile Government has proposed to scrap the rule for the widow's allowance entitlement that they need to have been married for three years or more when their husband dies, providing their husband satisfies the contribution conditions, to qualify for pay-outs. The period for which a widow's allowance is paid will be extended until the youngest child reaches 18, when the Act comes into force, said Ms Cox.

"Recognising the fact that many of our youth are in formal eduction and training programmes well beyond age 18, and in order to further assist widows with children in full-time eduction, it is now proposed to extend the period during which a widow's pension is paid until the child reaches 18 or if the child is a full-time student, until the age of 26 or the age at the termination or completion of their studies, whichever is earlier," she said.

Government also proposed to remove legislation requiring people to be incapacitated from employment for a continuos period of 52 weeks or more before being entitled to receive benefits, allowing them to benefit from their contributions if they satisfy the requirements and are certifiably incapable of working.

"The existing provision for a 52-week period is punitive and an unnecessary barrier to receiving a much-needed benefit," said Ms Cox.

Shadow Minister of Education Grant Gibbons, said the bill was more of a housekeeping issue and what lay underneath was the real concern that pensioners were still being left without their promised funds because of delinquent employers.

"It's one thing to change the act and modernise it, but underneath that, and this has been the problem for a number of years, is that the systems they have used have been way behind in keeping up to date with the employers," Mr. Gibbons said.

"While employers have been deducting the funds at the same time with delinquent employers they have not been posting these to the social insurance department. The important thing is the underlying systems are not up to speed."

He added that financial statements had not been seen since 2004 leaving the past three years unaccounted for, but did appreciate the increase in fines for those who are delinquent in paying their portion of their employees' pensions.

Mr. Gibbons said of the raise in the maximum fine from $250 to $1,000: "That will help as well, but we really need the AG's (attorney general) officers to make this a priority as well to get after these employers who are not paying. These are not new issues."