2017 Hike in SSS Contribution - Computed!
Lately, we received some buzz about the Social Security System. Good news first: President Rodrigo Duterte approved a P1,000 hike on monthly pensions for current senior citizen beneficiaries starting this year. It’s undeniably a good thing to see our elderly get more benefits from their contributions over the past decades. Everyone’s happy, until someone asked, “Wait, how are we gonna pay for this increase?” Here comes the bad news: SSS contributions are set to increase this year, starting in May.
Specifically, the 11% SSS contributions rate will rise to 12.5% beginning in May 2016. The government explained that the increase will be used to finance the recent pension hike. If the SSS will have its way, that rate could rise to 17% after six years, although there is no concrete plan yet on how that will be implemented, because the government is planning to add another P1,000 to the monthly pension in 2022. Good for the senior citizen, quite bad for those of us who are still working. Currently, some lawmakers are fighting the measure, calling it illegal and invalid, while other advocates are urging the SSS to fund the pension increase by other means. But unless this opposition progresses into court action and then a stoppage, we ought to be prepared for the added expenses ahead.
Wait, remind me how exactly am I paying to SSS?
Glad you asked. Here’s a primer on how SSS contributions work:
The government, through the SSS, is responsible for giving pension to retirees, granted that they contributed some money into the system while they were working. For a lot of employed people, who are automatically members of the SSS, these contributions are already deducted from their salaries via their employers. (Government employees also have this pension system but through the Government Service Insurance System or GSIS.) Self-employed people, overseas Filipino workers, and volunteer members have to file for payment themselves.
The SSS takes a certain percentage (called the contribution rate) of your monthly salary, subject to the monthly salary credit, which is the bracketing system through which the percentage is calculated based on your monthly salary. For instance, a person who earns a month’s worth of the minimum wage in NCR (P9,820 for 20 days of work) will have a monthly salary credit of P10,000, because his salary is bracketed to that monthly salary credit.
For employed people, two-thirds of the calculated contribution amount is shouldered by the employer, with the remaining one-third being deducted from an employee’s salary. Self-employed people, overseas Filipino workers, and volunteer members shoulder 100% of the deduction. Hence, while any SSS contribution hike will surely hurt all our wallets, it will hit some worse than others. This conundrum also just hurt my head from all the math that I’ve been mentioning.
I mean, I love my elders and all, but how much are we going to shell out?
To recap, the SSS contribution rate, or the percentage of your salary that will go to them, will climb from 11% to 12.5%. In addition, the maximum monthly salary credit will hike from the current P16,000 to P20,000. That translates to higher contributions across the board, but especially for those whose monthly salaries are above P16,000, because of the maximum monthly salary credit hike. Or as the famous philosopher Christopher “Biggie” Wallace said, “Mo’ money, mo’ problems.”
For your convenience, GoBear has created a table from which you can check how much more you might end up paying every month after the hike. Just search for your salary range on the leftmost part of the table, and the information on the right will show you how much you’re paying now, as well as an estimate of how much you’ll pay starting in May and how much might be added to your payments.
Disclaimer: This table only serves as an estimated guideline regarding future SSS payments, based on the current system and the planned contribution hike details revealed to the media. This is not in any way an official SSS contribution matrix. We advise you to directly contact SSS for any concern regarding your contributions and the impending hike.
Based on what you see on this table, the minimum-wage earner in NCR who we talked about earlier is about to give SSS about P50 more per month. The call center agent earning P18,500 monthly will pay P182.33 more per month on his SSS contribution. But his sister, who works as a nurse abroad and easily earns twice his salary, will end up paying up to P740 more on top of her already significant P1,760 monthly contribution.
With that being said, let’s just hope that we do get our pensions without a hitch when it’s our time to retire from paying these escalating SSS contributions.
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