SSS Contribution Hike: What You Need to know?
In the 3rd quarter of 2013, the Malacañang Palace has approved of a 0.6% increase in Social Security System (SSS) contributions. This would result in a change in the SSS contributions of employers and their employees. To tell you more, here are the important things that you should know about this contribution hike.
Before and After Rate
The 0.6 increase means that the 10.4% rate for employee’s contribution becomes 11% of a SSS member’s monthly salary credit. However, the contribution ratio of the employer and employee will remain as 70% and 30% respectively.
According to Emilio de Quiros Jr, CEO and President of SSS, the hike includes an increase in the monthly salary credit ceiling. From 15,000 it will become 16,000.
Previously, the monthly salary credit has a minimum of 1,000 and a maximum of 15,000. Now it is 1,000 and 16,000 because of the hike. This means that the highest base for the 11% rate will now be 16,000.And these changes will be effective starting January of 2014 as de Quiros said.
Reason for the Hike
The SSS said that the approval of the president of the contribution was a welcome development for the longevity of SSS. It was estimated that SSS can only service all contribution claims for the next 26 years, or until 2039. But with the hike, it was expected to increase the longevity of SSS by 3 years or until 2042, which is 29 years later.
More Hikes in the Future
In order to achieve perpetuity of fund, de Quiros said that the SSS will have another increase of contribution after the 2014 hike is implemented. In particular, de Quiros said that the SSS will be pushing another increase EVERY two years thereafter.
Planned Increase in Benefits
On the other hand, de Quiros intends to raise the pension benefits for its members. He said that there would be a 5% increase in the benefits of SSS pensioners which be implemented this year.
For more information here is a table of contributions as of January 2014.