SSS releases circulars on new contribution schedule
The Social Security System‘s (SSS’) new contribution schedule is set to take effect January 2021 pursuant to Republic Act No. 11199 or the Social Security Act of 2018.
Contribution Rate
Based on SSS Circulars No. 2020-033-b, 034-b, 035-b, 036, and 039 signed by SSS President and CEO Aurora C. Ignacio, the contribution rate will be 13 percent, one percent higher than the current rate.
For employed members, including OFW members in countries with Bilateral Labor Agreements (BLAs) with the Philippines, and sea-based OFW members, the additional one percent will be divided equally between them and their employers, bringing the contribution rate breakdown to 8.5 percent for their employers and 4.5 percent for them.
To cite an example, 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, an 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.
Minimum and Maximum MSCs
Also pursuant to the Social Security Act of 2018, the minimum 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, while the maximum MSC will 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 13 percent contribution rate that would begin in January 2021, his/her 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 aims to ensure the long-term viability of the SSS and 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.
For more information, view the said SSS Circulars at //bit.ly/3pwIJyL, //bit.ly/33RXdRn, and //bit.ly/3rA8Ypw, follow the SSS on Facebook at “Philippine Social Security System,” Instagram at “mysssph,” Twitter at “PHLSSS,” or join its Viber Community “MYSSSPH Updates.”
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