The Basics Of Social Security System (SSS) That You Need To Know

The Philippines’ Social Security System (SSS) is a government-run program that provides social insurance for workers belonging to the private sector. Additionally, SSS also caters to professionals and other members of the informal sectors.

By the virtue of the country’s Republic Act No. 1161, the SSS was established to provide benefits to working Filipinos. Members are required to regularly contribute funds on a monthly basis based on their monthly earnings.

While a huge percentage of people belonging to the Philippine workforce have their individual social security system accounts, not all of them really understand the processes and the overall benefits that they can get from this state-run program – and this is true especially for newly-hired and younger professionals.

If you are one of those who still doesn’t understand what they are paying for and what advantages members can get from this insurance system, this article will give you a quick and concise enumeration of everything that you should know about SSS.

Here they are.

1. Definition and Scope of SSS

As mentioned earlier, the Philippine Social Security System is a state-run and government-mandated insurance program that covers earners and workers in the private sector. People working for the government, on the other hand, rely on another insurance program, the Government Service Insurance System, also known as the GSIS.

2. Contribution and Fund Generation

SSS members are obliged to regularly forward their contributions to this insurance program. These collected contributions make up a huge percentage of the entire program’s funds. Further generation of earnings can also come from the organization’s investments.

When a part of the overall contributions is not utilized for the members’ benefit disbursements, the remaining amount will then be set aside to be a part of the program’s Reserve Fund. These funds can then be used for liabilities in benefit payments in the future.

How much are you expected to contribute every month?

The amount of your regular (monthly) contribution will primarily depend on the compensation that you’re getting on a monthly basis, especially if you’re employed by a private company. If you fall under the “self-employed” status or you are a voluntary member, your contribution rate will be 11% of your declared monthly earnings. For non-working spouses, their contribution will depend on their partner’s last posted monthly salary credit (MSC).

According to the SSS website, here are the details that you should take note of:

• Employed: Present contribution rate for SSS members is at 11% of an employed individual’s monthly salary credit. Take note, however, that it should not exceed Php 16,000. The current policy also dictates that you, the employee, will pay the 3.63% while your employer will shoulder the remaining 7.37%.
• Self-employed/voluntary members: Members under this category are required to pay 11% of their total monthly salary credit. Their MSC will be based on their own declared monthly earnings at the same period of their registration.
• Overseas Filipino Workers: OFWs will compute their contributions against a minimum monthly salary credit of Php 5,000.
• An unemployed spouse with a working spouse: An unemployed spouse will pay 50% of their employed spouse’s latest monthly salary credit. The MSC, however, will not be lower than Php 1,000.

To get started, consider these steps below.

• The first step that you have to take is to determine the specific salary range that you fall into and the corresponding compensation range under that category.
• Next is, carefully determine the exact percentage or amount that you have to pay every month. This amount, if you are employed, is what will be reflected on your payroll SSS deductions.
• You also have to check the percentage of the contribution that your employer will shoulder.

While keeping these steps in mind, you may now check the complete SSS compensation and contribution table here.

For computing SSS contributions, you may also read our post on “how to compute SSS contributions”.

3. Benefits of SSS membership

There are plenty of reasons why workers and self-employed earners allot a part of their monthly budget to pay for their SSS contribution. The benefits and advantages that come with being a member of this insurance program can make a huge difference especially during the rainy days and unpredictable financial circumstances that might come your way.

Here are the most important SSS benefits that you should be aware of in case of the following circumstances.

A. Maternity

If you are a working mother, the maternity benefit that comes with your SSS membership can be a huge help for your financial needs after childbirth and related health concerns.

As a female member, you are given a daily cash allowance during the period in which you are unable to work because of childbirth or even in the event of miscarriage.

B. Medical emergencies

The SSS’ sickness benefit will grant its qualified members a daily cash allowance. The amount that will be given to individuals suffering from medical emergencies will depend on the number of days that they are unable to work because of an injury or a sickness.

C. Disability

SSS’ disability benefit can be availed either on a lump-sum amount or monthly. Individuals who suffered from accidents and become permanently, partially, or totally disabled can qualify to claim these benefits.

D. Death

Cash benefits shall be given to the beneficiaries of the deceased member in case of death. The benefit will be granted as a monthly or a lump-sum amount, depending on the declared preference.

E. Funeral

A monetary benefit of Php 20,000 in total will be granted to provide financial support to a member’s funeral expenses. The cash benefit will be given to whoever shouldered the said expenses.

F. Retirement

Retirement benefits for members who can no longer work because of old age come in the form of cash benefits that can be granted as a lump-sum or a monthly compensation.

CONCLUSION

Hopefully, this article has answered the most basic questions that you have about SSS membership, contribution and the rewards that you can gain from this important insurance program.  It’s not yet too late to take advantage of the benefits of becoming a member, and your future self will thank you for taking the first step today.

Other information:

How to Register Your Business with the SSS

SSS Contribution Table and Deadline of Payments