The Basics Of Social Security System (SSS)

That You Need To Know

June 29, 2018

Nearly every working Filipino in the private sector contributes monthly to the SSS or the Social Security
System fund, but not everyone understands the benefits they qualify for, nor how the system works. To provide
a generalized view of the SSS, here is a low down of the things its members should know.

What Exactly Is The SSS?

It is an insurance program mandated by the Philippine government to cover all income earners or workers in the
private sector, in contrast, government workers are covered by the GSIS or Government Service Insurance
System.

Where Does The SSS Get Its Source Of Funds?

The SSS basically derives its funds from member’s contributions and investment earnings. Such portion of the
contributions that are not needed for benefit disbursements goes to a Reserve Fund, which is intended to cover
future liabilities in benefit payments of the SSS to its over 29 million members to date.

How Much Of Your Income Is Required For SSS Contribution?

Your monthly contribution is based on your compensation. The current SSS contribution rate is 11% of the
monthly salary credit not exceeding ₱16,000 and this is shared by the employer (7.37%) and the employee
(3.63%).

For instance:

If your monthly salary is ₱30,000, your contribution will only be based on ₱16,000 (which is the highest
monthly salary credit). You shall then pay the amount of ₱581.30, while your employer will pay ₱1,208.70, for
a total contribution of ₱1,790.00 per month.

For self-employed and voluntary members, the contribution rate is 11% of the monthly salary credit (MSC)
based on the monthly earnings declared at the time of registration. For OFWs, the minimum monthly salary
credit is pegged at ₱5,000. Meanwhile, non-working spouses’ monthly contribution is based on 50% of the
working spouse’s last posted monthly salary credit but in no case shall it be lower than ₱1,000.
How Is The SSS Retirement Benefit Computed?
To compute your monthly pension, the SSS uses the values of three formulas. So if you are a member who has a
monthly salary of ₱30,000.00, and who decides to retire at age 60 with a total of 30 years’ worth of
contributions, you may be qualified to a monthly pension based on whichever amount is higher based on the
following calculations:

For your information

Example: Average total contribution is ₱1,790.00 x 30 years x 12 months = ₱644,400.00.

1. The sum of ₱300 plus 20% of the average monthly salary credit plus 2% of the average monthly salary credit
for each credited year of service (CYS) in excess of ten years;

Pension: (AMSC) 20% + (AMSC) 2% for year of service in excess of 10 years + ₱300

: (₱16,000*20%) + (₱16,000*2%*20 years) + ₱300

: ₱3,200 + ₱6,400 + ₱300

: ₱9,900.00

2. Forty (40) percent of the average monthly salary credit:

Pension: (AMSC) 40%

: (₱16,000*40%)

: ₱6,400.00

3. ₱1,200, if the CYS is at least 10 but less than 20; or ₱2,400, if the CYS is 20 or more.

Pension: ₱2,400.00 since you have more than 20 CYS

Accordingly, the highest value yielded by any of the formulas, which in this case is ₱9,900.00, shall be your
monthly pension upon retirement.

It is important to note that members only receive the lifetime pension support if they have contributed for at
least 120 months or 10 years, otherwise a lump sum amount equivalent to the member’s total contribution plus
some interest will be given.

Can You Get Advanced Retiree Benefits Once You Retire?

Yes, but it can be exercised only when filing the first retirement claim. Basically, you, as a retiree-member,
have the option to receive your first 18 months’ pension paid out in lump sum, but discounted at a preferential
rate of interest to be determined by the SSS. You shall then thereafter start receiving your pension on the 19th
month, and every month thereafter.

Who Should Be Covered By SSS As Mandated By Law?

Compulsory coverage is the mandatory registration of employees, employers and self-employed persons with
the SSS, with corresponding payment and remittance of social security contributions. To be specific, they are
the following:

Employer An ER is any person who uses and pays for the services of another person in any
(ER) business, trade, industry, or undertaking.

An EE could be:

 a worker in the private sector, regardless of status of employment, whether

permanent, temporary, or provisional, who is not over 60 years of age (up to 60th
birthday, if initial coverage);
 a house helper who is not over 60 years of age (up to 60th birthday, if initial
Employee coverage);
(EE)  a Filipino seafarer, upon signing of the standard employment contract and actual
deployment by the manning agency and the foreign principal, who are considered
as the ERs; or
 a worker of a foreign government or international organization, or its wholly-
owned instrumentalities, with an approved Administrative Agreement with the
SSS.

An SE is an individual who is:

Self-  engaged in any trade, business or occupation, who has no ER other than himself,
Employed  derives an income of at least ₱1,000 a month from his/her physical and mental
(SE) efforts, and
 not over 60 years of age (if initial coverage).

What Is Voluntary SSS Coverage?

Voluntary coverage is the non-mandatory registration and payment of social security contributions by any of the
following:

A VM is one:
Voluntary
Member (VM)  who was previously covered as an SSS member either as an EE, SE, or OFW;
 has at least one (1) posted contribution;
  is no longer engaged or working as either an EE, SE, OFW, or has no
income/earnings as such for a given period; and
 opts to continue paying contributions on a voluntary basis to maintain his/her
right to full SSS benefits.

An OFW is any of the following types of overseas-based Filipino:

Overseas Filipino  recruited in the Philippines by foreign-based ERs for employment abroad;
Worker (OFW)  having a source of income in a foreign country; or
 residing permanently in a foreign country.

An NWS is a married person who devotes full time in the management of the
Non-Working
household and family affairs, unless he/she is engaged in other vocation or
Spouse (NWS)
employment that is subject to mandatory coverage.

When Does SSS Member Coverage Take Effect?

It depends on the type of SSS membership.

ER On the first day he/she hires the first EE(s).

EE On the first day of his/her employment.

On the month and year of first monthly contribution payment, provided that it is not earlier
SE than the declared “Start of Business” in the SSS Form E-1; or retroactive on the applicable
month and year of the first contribution payment.

On the applicable month and year of the first contribution payment based on the payment
OFW
deadline for OFWs.

NWS On the applicable month and year of the first contribution payment.

SSS Contribution Table For 2017

Use the table below to find out how much will be your total monthly contribution and your employer’s
contribution based on your compensation. For self-employed, OFWs, and voluntary members, your salary credit
will depend on your declaration of monthly earnings at the time of registration. Do note that the same
contribution rate of 11% will be applied, however, being self-employed or based abroad, you will need to
shoulder the entire cost of contribution compared to regular local employees.
 Total Total
Salary Range Employer Employee
Contribution Contribution
(Employee/SE/VM/OFW) Share Share
(Employee) (SE/VM/OFW)

₱1,000-1,249.99 ₱83.70 ₱36.30 ₱120 ₱110

₱1,250-1,749.99 ₱120.50 ₱54.50 ₱175 ₱165

₱1,750-2,249.99 ₱157.30 ₱72.70 ₱230 ₱220

₱2,250-2,749.99 ₱194.20 ₱90.80 ₱285 ₱275

₱2,750-3,249.99 ₱231 ₱109 ₱340 ₱330

₱3,250-3,749.99 ₱267.80 ₱127.20 ₱395 ₱385

₱3,750-4,249.99 ₱304.70 ₱145.30 ₱450 ₱440

₱4,250-4,749.99 ₱341.50 ₱163.50 ₱505 ₱495

₱4,750-5,249.99 ₱378.30 ₱181.70 ₱560 ₱550

₱5,250-5,749.99 ₱415.20 ₱199.80 ₱615 ₱605

₱5,750-6,249.99 ₱452 ₱218 ₱670 ₱660

₱6,250-6,749.99 ₱488.80 ₱236.20 ₱725 ₱715

₱6,750-7,249.99 ₱525.70 ₱254.30 ₱780 ₱770

₱7,250-7,749.99 ₱562.50 ₱272.50 ₱835 ₱825

₱7,750-8,249.99 ₱599.30 ₱290.70 ₱890 ₱880

₱8,250-8,749.99 ₱636.20 ₱308.80 ₱945 ₱935

₱8,750-9,249.99 ₱673 ₱327 ₱1,000 ₱990

₱9,250-9,749.99 ₱709.80 ₱345.20 ₱1,055 ₱1,045

₱9,750-10,249.99 ₱746.70 ₱363.30 ₱1,110 ₱1,100

₱10,250-10,749.99 ₱783.50 ₱381.50 ₱1,165 ₱1,155

₱10,750-11,249.99 ₱820.30 ₱399.70 ₱1,220 ₱1,210

₱11,250-11,749.99 ₱857.20 ₱417.80 ₱1,275 ₱1,265

 Total Total
Salary Range Employer Employee
Contribution Contribution
(Employee/SE/VM/OFW) Share Share
(Employee) (SE/VM/OFW)

₱11,750-12,249.99 ₱894 ₱436 ₱1,330 ₱1,320

₱12,250-12,749.99 ₱930.80 ₱454.20 ₱1,385 ₱1,375

₱12,750-13,249.99 ₱967.70 ₱472.30 ₱1,440 ₱1,430

₱13,250-13,749.99 ₱1,004.50 ₱490.50 ₱1,495 ₱1,485

₱13,750-14,249.99 ₱1,041.30 ₱508.70 ₱1,550 ₱1,540

₱14,250-14,749.99 ₱1,078.20 ₱526.80 ₱1,605 ₱1,595

₱14,750-15,249.99 ₱1,135 ₱545 ₱1,680 ₱1,650

₱15,250-15,749.99 ₱1,171.80 ₱563.20 ₱1,735 ₱1,705

₱15,750-over ₱1,208.70 ₱581.30 ₱1,790 ₱1,760

Types Of SSS Benefits

The benefits under the Social Security Program are:

 Sickness Benefit. It’s a daily cash allowance paid for the number of days a member is unable to work due to
sickness or injury.

 Maternity Benefit. It’s a daily cash allowance granted to a female member who is unable to work due to
childbirth or miscarriage.

 Disability Benefit. It’s a cash benefit granted – either as a monthly pension or a lump-sum amount – to a
member who becomes permanently disabled, either partially or totally.

 Retirement Benefit. It’s a cash benefit granted – either as a monthly compensation or a lump-sum amount – to
a member who can no longer work due to old age.

 Death. It’s a cash benefit granted – either as a monthly compensation or lump-sum amount – to the
beneficiaries of a deceased member.

 Funeral. A funeral grant of ₱20,000 to whoever paid for the burial expenses of the deceased member.
 Salary Loan. It’s a cash loan granted to an employed, currently – paying self-employed or voluntary member.
It is intended to meet the member’s short-term credit needs.

Can A Member Withdraw Their SSS Membership?

No. When a person registers and is covered for SSS membership, he/she becomes a member for life.

If Your SSS Card Was Lost Or If You Forgot Your SSS number,
Should You Secure Another Number?
No. The SSS number assigned to a member is a lifetime number and must always be used in all transactions
with the SSS. If the member wishes to replace a lost SSS ID card or cannot remember his/her SSS number, it is
advisable to inquire from the nearest SSS branch.

Who Are Considered As Primary SSS Beneficiaries?

Your primary beneficiaries are your legitimate dependent spouse until he or she remarries, and your dependent
children – whether legitimated or legally adopted, or illegitimate, who are not yet 21 years old.

If you’re single and without children, the benefits will go to your parents who are considered as your secondary
beneficiaries.

In the absence of both primary and secondary beneficiaries, any other person that you designate in your SSS
records shall be considered as the beneficiary.

What Happens To My SSS Contribution If I Lose My Job?

Upon separation from employment, your employer’s obligation to pay your SSS contributions ceases at the end
of the month of separation. However, you shall still be credited with all the contributions paid on your behalf
and remain entitled to SSS benefits and privileges. You may also opt to continue paying the total contributions
as a voluntary member to maintain your right to full benefits.

There you have it, a rundown of some of the most important things to know about the SSS. Keep in mind that
being aware of your obligations and benefits under the program will give you advantage in times of need. This
article is far from exhaustive though, so it will be best to check out the official site of the SSS from time to time.

Aside from a salary loan, the SSS also provides its members the benefit of getting a home loan. If you’re
looking to purchase a property and considering taking a loan, you can read this article to compare
the differences between a Commercial Bank, SSS, and Pag-IBIG housing loans.