Increase general pension age (AOV) from 62 to 65 on St. Maarten

On 11 August 2020, an amendment of the "Landsverordening Algemene Ouderdomsverzekering"(hereafter “AOV”) and the "Landsverordening Algemene Weduwen- en Wezenverzekering" (hereafter “AWW”) was published in the National Gazette.

The amendment introduces two changes: the increase of the general pension age and an increase of the monthly benefits.

Pension age

For both the AOV and AWW, the general pension age was increased from 62 to 65. This increase is in line with the general pension age in Aruba, Curaçao, the Caribbean Netherlands and the Netherlands. The increase had also been recommended by the "Sociaal-economische Raad" in 2019. Lastly, the increase of the general pension age was a non-negotiable condition of the Netherlands for providing liquidity support to Sint Maarten to combat the COVID-19 crisis. This amendment took effect on 1 July 2020.

A grandfather clause was included for persons who had already reached the age of 60 by 1 July 2020. These persons are still entitled to receive their AOV pension from the age 62.

Benefits

At the same time the general pension age was increased, the monthly AOV benefits that pensioners receive was increased from a maximum of NAf 1.116 to NAf 1.240. This increase was deemed necessary as the government concluded that the AOV benefits were not sufficient to cover the basic cost of living in Sint Maarten. Poverty amongst the elderly is among the issues that is addressed by this increase in monthly benefits. The increase was possible because of the relatively high reserves that the AOV and AWW funds have built up over the past few years. This amendment took effect on 1 July 2020 as well.

Would you like to have more information about this article? You can contact:

Maarten Tervoort, tax advisor, tervoort@bakertillysxm.com 

Paula de Bruijn, tax advisor, debruijn@bakertillysxm.com