Senate votes to empower Duterte to defer SSS rate hike

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THE Senate, voting 21-0, passed Monday an awaited remedial legislation empowering President Duterte to defer increases in existing rates of Social Security System (SSS) contributions.

The senators’ vote comes three weeks after the House of Representatives

endorsed for Senate approval two bills granting Duterte the power to suspend the scheduled increases in the contribution rates both of the SSS and of the Philippine Health Insurance Corp. (PhilHealth).

House Bill 8512 amends RA 11199 or the Social Security Act of 2019, which provides for gradual increases in monthly premium contributions.

Pursuant to RA 11199, SSS pay rate is expected to increase from 12 percent in 2020 to 13 percent in year 2021.

SSS President and CEO Aurora C. Ignacio had told lawmakers in both chambers that the bills will weaken rather than strengthen the SSS, “especially in these difficult times.”

Ignacio cited a projected loss of P41.37 billion in 2021 contributions in the event of suspension of implementation of contribution increase.  

Also, she said the small scheduled increase in contributions would be equivalent to around P41 billion of benefits and loans to 3.3 million beneficiaries, an amount that could enable the SSS to grant even more benefits and loans for SSS members, both present and future.

On Monday, Senate Bill 2027, sponsored by Senator Richard Gordon as chairman of the Committee on Government Corporations and Public Enterprises, was unanimously approved on third and final reading,
effectively granting the Chief Executive power to extend deferment of upward adjustment in SSS contributions from six months to one year.

Proponents clarified that as provided in the approved bill,
the President, upon the recommendation of the Social Security Commission “may suspend the scheduled increase for six months and may extend the deferment for another six months for a total of one year.

The remedial legislation effectively amends section 4(a)(9) of RA 11199, also known as the “Social Security Act of
2018,” that allows the Social Security Commission, the SSS governing body,  to implement the contribution rate increase.

Section 4(a)(9) of RA No. 11199 provides a one percent
contribution increase will be imposed on SSS members every two years starting 2019 until 2025. This means that from a contribution rate of 12 percent in 2020, contribution rate will increase to 13 percent beginning January 2021.

However, Gordon clarified that having the mandated
contribution increase under RA 11199 is “not timely,” citing the continuing hardship caused by Covid-19 to the people and to the business sector.

He added that the remedial legislation embodied in Senate Bill 2027 also states that other scheduled contribution rates and monthly salary credits shall continue to be valid and effective, provided that no changes in the implementing rules or administrative procedures
would be introduced by the Social Security Commission that will defer the disbursement of benefits.

Gordon asserted that “this bill seeks to provide the
people with flexibility to adapt to the pandemic by empowering the President to temporarily suspend or defend the increase in contributions scheduled under RA 11199,” stressing that “the people will be able to have financial breathing space to be able to adjust to
the on-going National Emergency.”

1 COMMENT

  1. guys, the premiums contributions you pay now will be invested by SSS which will be your pension in the future. Investments takes 10, 20, 50 years to grow so when you retire, those of you have started contributing to SSS since 10 years ago will have grown into something substantial. The bigger your
    premium, the bigger the investment return.

    those who are receiving pensions now are the fruits of the investment made with their contributions
    many, many years ago. They are not dependent on your present contribution. The SSS is not a pyramiding scam.

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