MANILA, Philippines – The Social Security System (SSS) and the Philippine Health Insurance Corp. (Philhealth) will begin collecting higher contributions from members this month.
The SSS is set to implement this month a 0.6 percent increase in member contributions, divided equally between employees and their employers, as it seeks to cut its unfunded liability of P1.1 trillion and lengthen its actuarial life until 2043.
Self-employed and voluntary members, however, would shoulder the entire 0.6 percent hike in monthly contributions, approved by President Aquino last year.
This means employees’ monthly contributions will rise to 11 percent of a member’s monthly salary from 10.4 percent.
A big chunk or 70 percent of the monthly contributions will continue to be paid for by the employer, while the SSS member will shell out the remaining 30 percent.
Members’ contribution rate has only been increased twice since 1980, in 2003 and in 2007.
Also to be raised beginning January is the ceiling for the monthly salary credit from P15,000 to P16,000.
The increase is equivalent to an additional monthly contribution of P6 for every P1,000 increment in the monthly salary credit.
An employee who earns P10,000 a month will now have to remit P1,100, with P746.70 to be shouldered by the employer.
The monthly contribution for the minimum monthly salary credit would be P110; P550 for the minimum of P5,000 for overseas Filipinos workers, and P1,760 for the maximum of P16,000.
The rate hike forms part of the pension fund’s reform agenda aimed at strengthening the institution and perpetuating the life of the fund.
International standards mandate that the life of a pension fund should be at least 70 years to be considered perpetual. The SSS has been operating for 56 years now.
To achieve perpetuity of the fund, the SSS is considering increasing further member contributions to 14 percent from the current level of 11 percent.
The SSS currently has an estimated unfunded liability of P1.1 trillion, which increases by about eight percent or P80 billion yearly unless SSS revenues increase.
According to the SSS, its existing reserve fund is enough to cover liabilities for the next 26 years or until 2039 only.
The pension fund is urging those who had paid their contributions in advance to make the necessary updates so that their payments can be credited properly. Members have to use the contributions payment return form when paying.
Premium doubled
Meanwhile, Philhealth acting vice president for corporate affairs group Israel Francis Pargas said the premium has been doubled to P200 monthly or P2,400 a year.
“The adjustment is in accordance with RA 10606 which provides that the sponsored members shall have the lowest premium. The annual premium of our sponsored members has been P2,400 since 2011 and it is only this year that we are adjusting the rate for other members,” he said in a phone interview.
Pargas was referring to the National Health Insurance Act passed in mid-2013. The law mandates the enrollment of all Filipinos in PhilHealth, among other provisions.
“Sponsored members” refer to Filipino families certified by the Department of Social Welfare and Development as “poorest of the poor.” PhilHealth and the Department of Health shoulder their premium payments.
Various PhilHealth circulars showed that from the salary base of P8,000, the monthly premium of those in the employed sector shall be increased from P100 to P200, equally shared between the employer and the employee.
Those with salary of P35,000 and up, on the other hand, shall pay P875 in monthly premium also equally shared by the employer and employee.
The monthly premium of individually paying members with monthly salary of P25,000 and below shall pay P200 a month or P2,400 a year. Those receiving more than P25,000 shall still pay the annual premium of P3,600.
A circular showed that annual premium of overseas Filipino workers who are members of PhilHealth had also been increased from P1,200 to P2,400.
Pargas added that the adjustments in premium are meant to help PhilHealth sustain its viability and improve financial protection for members.
PhilHealth records showed that even without raising the rates, it was able to enhance benefits for members by covering payments for sensitive medical procedures under its Z Package. Beneficiaries included those treated for childhood leukemia as well as those who underwent heart surgeries, kidney transplants, lower limb prosthesis, among others. –Zinnia Dela Pena and Shiela Crisostomo (The Philippine Star)
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