The Social Security System said Monday the scheduled increase in its contribution rate and minimum and maximum monthly salary credits is to ensure the continuous delivery of social security protection to its members and their beneficiaries.
SSS President and CEO Aurora C. Ignacio says the SSS has been listening to the clamor of various labor groups and members to defer the mandated increases, but the move is designed to protect the fund life of the SSS.
“We understand the plight of our covered employers and members, but, at the same time, it is our duty to secure the long-term viability of the SSS fund entrusted to us for the continuous delivery of SSS benefits to our current and future members, as well as their beneficiaries,” Ignacio said.
“Moreover, these scheduled reforms are pursuant to Republic Act 11199 or the Social Security Act of 2018. Thus, we are bound by law to implement it.”
This January 2021, the SSS contribution rate was increased to 13 percent from the previous 12 percent. On the other hand, the minimum monthly salary credit has been raised to P3,000 from P2,000 (except for Kasambahay and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively), while the maximum MSC is set at P25,000 from P20,000.
For employed members, land-based OFW members in countries with Bilateral Labor Agreements with the Philippines, and sea-based OFW members, the additional one percent will be divided between them and their employers, bringing the contribution rate breakdown to 8.5 percent for employers and 4.5 percent for them.
To illustrate, a member paying under the P10,000 MSC will now pay a monthly contribution of P1,300, which is P100 higher than the P1,200 in 2020.
Suppose the member is employed, a land-based OFW in a country with a BLA with the Philippines or a sea-based OFW. In that case, the P100 additional contribution will be divided as P50 from their employers for a total employer share of P850 and P50 from them for a total member share of P450.
While the MSC to be considered for the computation of benefits under the regular social security program is capped at P20,000, contributions pertaining to the MSC in excess of P20,000 will go to the Workers’ Investment and Savings Program, a provident fund that will yield additional pension income for members contributing under it.