NEW SSS Contribution 2021
This greeted me when I went to the SSS member's portal: New Schedule of Contributions to start this year.
What a bang! What a way to greet the new year. Anyhow, as I've no idea what this meant, I immediately went to the agency's official Facebook page (@SSSPh), and yeah, it's true. Their FB page made the same announcement (pic screenshot from the FB page):
Along with this announcement is the news bit explaining the amended contribution schedule that is to be effective this month, January 2021. I thought I'd share it here as well as it might help shed light to this news. Texts below are copy-pasted from their FB page.
SSS’ scheduled contribution rate increase to ensure continuous delivery of social security protection
The Social Security System (SSS) on Monday said that the scheduled increase in its contribution rate and minimum and maximum monthly salary credits (MSCs) is to ensure the continuous delivery of social security protection to its members and their beneficiaries.
SSS President and CEO Aurora C. Ignacio said that the SSS has been listening to the clamor of various labor groups and members to defer the said mandated increases; however, 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 No. 11199 or the Social Security Act of 2018. Thus, we are bound by law to implement it,” she added.
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 (MSC) 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 (BLAs) 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 (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, 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.
The SSS emphasized that the said reforms will allow members to save more for their retirement.
The SSS remains the cheapest pension and most accessible pension scheme in the country that offers seven kinds of benefit programs and various loan privileges.
Ignacio said that any delay in implementing the said reforms could endanger the fund life of the SSS and its ability to provide its members and their beneficiaries with benefits and loan privileges, especially in this time of the pandemic.
From January to October 2020, the SSS disbursed a total of P159.47 billion in social security and employees’ compensation benefits to 3.56 million members and beneficiaries.
SSS member loan releases from January to November 2020 totaled P58.03 billion for 3.20 million members, while pension loan releases for the said period reached P3.17 billion combined for 69,813 retiree-pensioners.
On the other hand, SSS contribution collections from January to October 2020 totaled only P169.73 billion, or a decrease of 5.4 percent from the P179.34 billion collected in the same period last year.
However, SSS’ investments were well-managed and have allowed the pension fund to respond to members' needs despite the drop in collections during the pandemic.
For further information on the SSS’ new contribution schedule, view its corresponding circulars at https://bit.ly/3pwIJyL, https://bit.ly/33RXdRn, and https://bit.ly/3rA8Ypw.
Generally, the significant features from the above article is summarized by SSS through these images:
As my job did not survive COVID-19's repercussions, I readily looked at the new contribution table for voluntary-paying members. Last year, I paid the maximum amount at PhP2,400 but reduced it to 1,980 as my freelance work might not sustain me. But looking at this new table---oh, my heart! The new max is now PhP3,250. Just wow!
I guess the new brackets beginning at the PhP20,250 salary bracket will have a corresponding savings component to it. At least, that's what I understand about the column on provident fund. Dang, I don't know if I can afford the new max of PhP3,250 (monthly salary credit of PhP24,750 and over) just to have the savings component of PhP650 per month. On the upside, paying for the provident fund will be an additional benefit to have upon retirement. But man, PhP3,250!
Apologies for the images; they're the same as in the FB page though; they're not too clear there as well. For the voluntary-paying member, monthly salary credit starts at PhP3,250 and below with a corresponding contribution of PhP390 and ends with PhP24,750 and over with the corresponding contribution of PhP3,250. The same salary brackets apply to all the types of SSS member. Only the contributions will vary among the different SSS members.
For voluntary members like me, the monthly salary credits are in the increments of PhP500 and the contribution at the increments of PhP65. Generally, the contributions for voluntary members starts at 390, then 455, 520, 585, 650, 715, 780, 845, 910, 975, 1040, 1105, 1170, 1235, 1300, 1365, 1430, 1495, 1560, 1625, 1690, 1755, 1820, 1885, 1950, 2015, 2080, 2145, 2210, 2275, 2340, 2405, 2470, 2535, 2600, 2665, 2730, 2795, 2860, 2925, 2990, 3055, 3120, 3185, and 3250. Figures in orange are the contributions with a savings component.
If your monthly salary is between 10,250 to 10,749.99, you'll pay 1,365; if 15,250 to 15,749.99, you'll pay 2,015. The monthly salary with the savings component starts at 20,250 to 20,749.99, and you'll pay 2,665; 2,600 of which goes to regular social security while the 65 goes to the mandatory provident fund. The savings component is also at increments of 65 until the maximum amount of 650.
Anyhow, below are the other tables for Employer-Employees, Household Employer/Kasambahay, OFW, and Self-Employed.
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