The Social Security System (SSS) will increase the members’ contribution come 2023 saying that it will help fund higher benefit payments for its members.
President and Chief Executive Officer Michael G. Regino of the SSS explained that their four-stage contribution rate increase will prepare the SSS fund for the needs of its members in the future.
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The new contribution rate will increase to 14%, which is 1% higher than the current 13%, starting January 1, 2023.
Regino said that they have already expanded their members’ benefits such as the unemployment benefit and maternity benefit under the Expanded Maternity Leave Law (EMLL). However, he said that the two don’t have a particular source of funding despite continuously giving those benefits to their members since 2019.
SSS said that they already disbursed Php3.78 billion worth of unemployment benefits to more than 287,000 members from 2019 to October 2022. Meanwhile, the yearly maternity benefit disbursements increased by 78% to Php12.54 billion in 2022 from Php7.07 billion in 2018.
The SSS president further justified the move by saying that the previous increases have improved the benefit disbursements for its members.
Furthermore, the SSS’s actuarial valuation shows that the fund would last until 2054. “The reforms in the contribution rates are among the factors that helped boosted our fund life brought by Republic Act No. 11199 or the Social Security Act of 2018,” Regino said.
This means that SSS has enough pension funds to support the immediate and short-term financial needs of their pensioners and members in the decades to come.
The contribution rate will gradually increase until it reaches 15% by 2025, which is under the Social Security Act of 2018.
With the new rate, the employer will shoulder the 1% point increase. This means that the employee’s share will stay at 4.5%, while the employer’s will increase to 9.5%. However, self-employed members will pay for the whole 14%.
There’s also going to be an adjustment to the minimum monthly salary credit from Php3,000 to Php4,000, while the maximum will increase from Php25,000 to Php30,000.