Social insurance agencies—like the Social Security System —require prior payment of contributions before they give out benefits to their beneficiaries. Welfare institutions, on the other hand, dole out benefits based on needs alone.
In principle, one who has contributed whether minimally or substantially to the build-up of a fund could claim to having earned the right to participate in its administration, especially on how its assets are to be managed prudently. At the end, he could claim a fair and equitable share of its income.
A non-contributor—a freeloader, he is called—couldn’t have as much right as a contributor. This used to be the general rule. For instance, a non-taxpayer did not have the right vote before.
This elitist rule still persists in the minds of many today.
What if the presumptive president kept his election promise to exempt workers from paying income tax if they earn less than P30,000 monthly? Wouldn’t this weaken—or take away—their right to participate in nation-building? Could they still demand good public services despite not contributing a single peso of tax to pay for their delivery?
We would prefer that he reduce their income tax but not completely abolish it.
Consider this. Employers could simply pay their workers’ contributions to SSS by carving them out from payroll and remitting both employer and worker shares directly to SSS. No deductions would appear in the workers’ pay envelopes.
This way, employers could claim full credit for creating the pension fund. Who could stop them from assuming solo management of SSS, and excluding workers from participating in its administration?
Instead, workers earn first their salaries, and it is only after when their contribution share is deducted.
Interestingly, the Chilean pension reform in 1980 required workers to shoulder the full provident fund contributions. How was it done?
First, the usual employer share was integrated into the worker’s regular pay. This amount plus the worker’s usual share were then deducted from his pay, and eventually remitted to the provident fund as if they were all his contributions.
Maybe, it’s an innovative way of remitting contributions, but it results in the same net take-home pay for workers.
The SSS contribution system requires both workers and employers to share the contributions, and it has made workers part owners of SSS.
They have become emboldened, in fact, to the point of demanding from its employees, officers and board members a regular accounting of its operating expenses, particularly questioning their high salaries, extravagant perks, and undeserved performance bonuses.
Even if there isn’t enough funds, they are demanding a P2,000 increase in pensions.
In contrast, consider the beneficiaries of social pensions and conditional cash transfers, which are both welfare programs. Not having contributed a single peso to them, the beneficiaries simply accept the low amounts of benefits that they receive—P500 as social pension and P1,400 as conditional cash transfer allowance. They never demand the kind of welfare program that they need.
Still, they deserve something better even if they have contributed nothing.
After all, these welfare programs are being financed by government revenues.
It’s true that a large part of these revenues is raised directly as personal and income taxes, of which they may have never paid any. But government also raises tax revenues from the sale of goods and services such as petroleum, natural gases, indigenous fuels, coals, electricity, etc. They also raise taxes when cigarettes and alcoholic beverages are sold, and when goods are imported from abroad unsmuggled.
Some are generated directly from fees, licenses, proceeds of privatization, and incomes of government corporations and state-owned enterprises.
Remember the Malampaya gas field near the Spratly Islands? It is expected to provide government an income of $8 to $10 billion. Fort Bonifacio, which has an area of 34.5 hectare, was sold at P33,000 per square meter. Only last Monday, our government casino company—Philippine Amusement and Gaming Corp.—remitted to the National Treasury P8.8 billion as income from its 2015 operations.
Surely, we—SSS pensioners and indigent senior citizens and families—are entitled to our fair share in these revenues.
Yet, we wouldn’t get any if these are all spent to finance fancy projects that we seldom use and benefit from, or to purchase warships and fighter planes against imagined enemies.
Government justifies to its critics its conditional cash transfer program as an investment toward reducing its welfare expenses in the far future. If the beneficiaries—mother and children—would comply with conditionalities to get themselves healthy and educated, then they would cease to be poor someday. Government then wouldn’t have to spend as much for welfare.
We agree with this pragmatic thinking even if it no longer applies to us senior citizens. In fact, we’d celebrate if CCT beneficiaries are able consequently to raise themselves above their present level of poverty.
But government revenues should also fund our SSS and social pension increases. These are clearly welfare benefits, but they may also be considered as a return and reward for our contributions to the country before.