How Does the New SSS Contribution Increase Affect Us?1 min read
It’s payday today for most of us who get paid bi-monthly. While you’re reading your pay slip, something new and surprising might show up. That most probably is the new increase on SSS contribution.
It was set to take effect this January 2021, with the new contribution rate at 13%–1% more than the previous.
The additional 1% will be divided equally between SSS members and their employers, bringing the contribution rate breakdown to 8.5% for their employers and 4.5% for the members, a total of 13%.
For example, those who will be paying a contribution with a monthly salary of ₱10,000 will be deducted a total monthly contribution of ₱1,300: ₱850 will be shouldered by the employer and ₱450 from the member.
The minimum monthly salary credit (or the minimum monthly salary to be a member of SSS) will also be adjusted from ₱2,000 to ₱3,000 with kasambahays as an exception. Their MSC will remain at ₱1,000. OFW members will still retain a minimum MSC at ₱8,000. No changes on that front.
The maximum MSC will also be raised to ₱25,000 from ₱20,000.
What does this increased contribution mean for the members of SSS?
With the adjustment in the MSC and the increased contribution rate, there will be a bump up in the computation of benefits. But those with a higher contribution (in excess of ₱20,000) will get to take advantage of the Workers’ Investment and Savings Program (WISP), a provident fund that will yield additional pension income for members contributing under it.
Based on the new 13% contribution rate, a member in the ₱25,000 MSC bracket will have a monthly deduction of ₱3,250. From that, ₱2,600 will go to the regular social security fund, while the remaining ₱650 will go to the WISP.
While the contribution increase will definitely be felt right at the pocket, this reform ensures the continuous operation of the SSS fund.
“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,”SSS President & CEO Aurora C. Ignacio
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.