The Supreme Court has upheld the 0.6 percent increase in the monthly premiums due from members of the Social Security System, which implemented the adjustment in January 2014.
In a 37-page decision penned by Associate Justice Marvic Mario Victor F. Leonen, the SC also affirmed the validity of the SSS circular which mandates that “the employer and the employee shall equally shoulder the 0.6 per cent increase” with the employer paying the contribution rate of 7.37 per cent from 7.07 per cent, and the employee paying 3.63 per cent from 3.33 per cent.
The ruling promulgated last April 2 but only released on Monday, denied the petition filed by the Kilusang Mayo Uno and several others challenging the increase.
The high court declared as valid the following SSS issuances: 1. “Resolution No. 262-s. 2013, dated April 19, 2013, of the Social Security Commission (SSC) providing for an increase in the SSS members’ contribution rate from 10.4 per cent to 11 per cent and the maximum monthly salary credit from P15,000 to P16,000 subject to the approval of the President of the Philippines; 2. “Resolution No. 711-s. 2013, dated September 20, 2013, of the SSC, approving, among others, the foregoing increases and 3. “Circular No. 2013-010, dated October 2, 2013, issued by the SSS, through its President and Chief Executive Officer Emilio S. De Quiros, Jr., providing for the revised schedule of contributions that would be in effect in January 2014, providing that the employer and employee shall equally shoulder the 0.6 per cent increase in contributions.”
The SC dismissed KMU’s petition on the ground that the group and other petitioners “are collaterally attacking the validity of Republic Act No. 8282 or Social Security Act by putting in issue not only the validity of the exercise of respondents SSS and the Social Security Commission’s (SSC) power under the said law, but also the validity of the delegation of power to the SSC under the said law to fix the contribution rate by claiming the said delegation to be incomplete in all its terms and conditions.”
The SC ruled that the Social Security Act is not only complete in its terms but it also contains a sufficient standard for the SSC to fix the monthly contribution rate and the minimum and maximum monthly salary credits.
The SC found that Section 18 in relation to Section 4 (a) of the Social Security Act has vested the necessary powers in the SSC to fix the minimum and maximum amounts of monthly salary credits and the contribution rate.
“The SC likewise found the legislature has specified the factors that should be considered—’actual calculations and rates of benefits’—in Section 18 of the Social Security Act as well as required the approval of the President of the Philippines as an additional limit to the SSC’s rate fixing power,” it said.
“To question the use of ‘actual calculations’ as factor for fixing rates is to question the policy or wisdom of the legislature, which is a co-equal branch of the government,” it added.
As to petitioners’ argument that that the increase in contribution is in violation of Section 4(b) of the of the Social Security Act providing that increases in benefits shall not require any increase in the rate of contribution, the SC ruled ‘that an examination of the provision and the assailed issuances reveals that the questioned increase in contribution rate was not solely for the increase in members’ benefits, but also to extend actuarial life…”
“To disregard the actuarial soundness of the reserves would be to go against the policy of the law on maintaining a sustainable social security system,” the SC said.
“The increases reflected in the assailed issuances to be a valid exercise of police power as they are reasonably necessary to observe the constitutional mandate of promoting social justice under the Social Security Act,” the tribunal added.
Given the past increases since the inception of the law, the contribution rate increase of 0.6 percent applied to the corresponding monthly salary credit does not scream of unreasonableness or injustice, the SC noted.
