AdChoiceTV News — This is a press release from the Social Security System.
The Social Security System’s (SSS) new contribution rate, which is set to take effect in January 2021, will be at 13% – 1% higher than the current rate.
This is pursuant to Republic Act No. 11199 or the Social Security Act of 2018. The SSS recently released Circulars No. 2020-033-b, 034-b, 035-b, 036, and 039, all signed by SSS President and CEO Aurora C. Ignacio
For employed members, including OFW members in countries with Bilateral Labor Agreements (BLAs) with the Philippines and sea-based OFW members, the additional 1% will be divided equally between them and their employers, bringing the contribution rate breakdown to 8.5% for their employers and 4.5% for them.
For instance, those who will be paying under the P10,000 monthly salary credit (MSC) starting next year will pay a monthly contribution of P1,300, which is P100 higher than the P1,200 in 2020.
Suppose the member is employed, is an OFW in a country with a BLA with the Philippines, or is a sea-based OFW. In that case, the P100 additional contribution will be divided into two halves – P50 from their employers for a total employer share of P850, and P50 from them for a total member share of P450.
Also pursuant to the Social Security Act of 2018, the minimum monthly salary credit (MSC) will be adjusted to P3,000 from P2,000, except for kasambahay and OFW members whose minimum MSC will remain at P1,000 and P8,000, respectively. The maximum MSC will also be raised to P25,000 from P20,000.
The MSC to be considered for the computation of benefits under the regular social security program is capped at P20,000. However, contributions pertaining to the MSC in excess of P20,000 will go to the Workers’ Investment and Savings Program (WISP), a provident fund that will yield additional pension income for members contributing under it.
For example, a member will be paying under the P25,000 MSC. Based on the new 13% contribution rate, their monthly contribution will be P3,250 – of which P2,600 will go to the regular social security fund, while the remaining P650 will go to the WISP.
“We understand the plight of our covered employers and members, but it is our duty to ensure the longevity of the SSS fund entrusted to us, to allow the continuous delivery of meaningful social security protection to our current and future members, as well as their beneficiaries,” Ignacio said.
The said reforms under the Social Security Act of 2018 aim to ensure the long-term viability of the SSS and to provide higher benefits for SSS members and their beneficiaries.
Moreover, upon full implementation in 2025, these reforms will offset the adverse financial impact of the P1,000 pension increase granted in 2017.
“We hope that members see their contributions as their safety net and savings, which they and their beneficiaries can turn to in times of sickness, maternity, unemployment, retirement, disability, death, calamity, and other contingencies, through the benefit programs and privileges the SSS offers,” Ignacio added.