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Business

COVID-19 hit businesses can now pay workers’ SSS contributions without penalty

Louise Maureen Simeon - The Philippine Star

MANILA, Philippines — Businesses that were affected by the pandemic since 2020 may resume paying their employees’ Social Security System (SSS) contributions without penalty, as the state-run pension fund ramps up ways to aid members.

SSS president and CEO Michael Regino told The STAR that the Social Security Commission – the policy making body of the SSS – last week approved a new program meant to help business owners.

“I was able to get the approval from the commission for those businesses that were significantly affected by COVID from March 2020 to February this year, before we went down to Alert Level 1,” Regino said.

“Those businesses that were not able to pay the contribution of their employees, they can still pay without any penalty. This covers business owners and household employers,” he said.

It should be noted that members are supposed to pay their monthly contributions to the state-run pension fund which, in turn, are being used for benefits such as retirement and other loans under SSS.

Currently, the contribution rate is at 13 percent of a worker’s monthly salary credit, which is shared at an 8.5:4.5 ratio by the employer and employee, respectively.

However, the pandemic, which started two years ago, prompted the temporary closure and worse, permanent shutdown of some business operations.

This, in turn, pushed millions of employees into joblessness, effectively limiting their capacity to pay off their monthly SSS contributions, among many other things.

“This is an entirely new program. We want our members to regain their contributions. We have to admit that the pandemic is a once in a lifetime thing and so many were affected,” Regino said.

“Now that the economy is recovering, we could ask the business employers to go back and pay the contributions of their employees during the time when they did not have much. That will really be good for their employees,” he said.

The consistent payment of SSS contributions is crucial in the ability of any SSS member to avail of loans and more so get significant benefits in time for their retirement.

The benefits of every member once they retire are computed based on their regular contributions to SSS while they were still working.

As for those whose businesses were completely closed and failed to resume their operations, Regino said owners should come up with a verification from their local governments that no renewal of business permit happened to be able to waive the penalties.

Regino said the SSS is now finalizing the system for the new program before it officially releases the detailed guidelines soon.

MICHAEL REGINO

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