Beginning Jan. 1, 2023, contributions to the Social Security System will increase.
The new contribution rate will be pegged at 14 percent, up by one percent point from the current 13 percent.
The 2023 contribution increase would help fund higher benefit disbursements to its members SSS President and Chief Executive Officer Michael G. Regino said.
“We have already expanded the benefits to our members such as the unemployment benefit, and maternity benefit under the Expanded Maternity Leave Law (EMLL). Both these benefits, however, have no particular source of funding but since 2019, we have continuously given these benefits to our members,” Regino said.
From 2019 until October 2022, SSS has already disbursed P3.78 billion in unemployment benefits to more than 287,000 members.
Likewise, the annual maternity benefit disbursement rose by 78 percent from P7.07B in 2018 to P12.54B in 2022.
Regino also said that the previous contribution increases boosted benefit disbursements for members.
From January 2019 to October 2022, SSS has released P822.86B benefits, which is 38 percent higher than the P596.30B disbursements from January 2015 to December 2018 prior to the amendment of the Social Security Law.
Regino added SSS latest actuarial valuation showed that the fund life would last until 2054. He said this is an indicator that the pension fund has enough funds to support short-term and immediate financial needs of members and pensioners in the decades to come.
Under the Social Security Act of 2018, SSS should gradually increase the contribution rate until it reaches 15 percent by 2025. The four-tiered contribution increase will ensure the pension fund’s financial viability for the benefit of members, pensioners, and their beneficiaries.
Under the new rate, employers would shoulder the one percentage point increase for members. The employee’s share will remain at 4.5 percent, while the employer’s share will increase to 9.5 percent from the current 8.5 percent.
Individual paying members such as self-employed, voluntary, non-working spouse, and OFW members will shoulder the whole 14 percent contribution rate.
There will also be an adjustment to the minimum monthly salary credit (MSC) from P3,000 to P4,000, while the maximum MSC will increase from P25,000 to P30,000.
Regino said the new contribution rate is also a great opportunity to help members increase their retirement savings through the mandatory provident fund program or the Worker’s Investment and Savings Program. “We want our members to have a comfortable retirement after their productive years. Every additional peso that a member contributes is more savings for their retirement. This is the principle that we want them to adapt – work, save, invest, and prosper,” Regino said. – Press release