Press Release
February 22, 2021

Bill Granting the President Powers to Defer SSS Contribution Hike Gets Senate's nod

The Senate on Monday approved a measure seeking to grant the President limited power to defer increases in the Social Security System (SSS) contributions for six months in times of a declared national emergency or calamity.

Under the bill, the President may extend the deferment of the SSS contribution hike for another six months for a total of one year.

With 21 senators voting in the affirmative, Senate Bill No. (SBN) 2027, sponsored by Sen. Richard Gordon, chairman of the Committee on Government Corporations and Public Enterprises, was approved on third and final reading.

Under SBN 2027, 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 measure seeks to amend section 4(a)(9) of Republic Act No. 11199, also known as the "Social Security Act of 2018," which allows the Social Security Commission, the governing body of the SSS, to implement the contribution rate increase.

Under Sec. 4(a)(9) of Republic Act (RA) No. 11199, 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.

Gordon, one of the authors of the bill, pointed out that having the mandated contribution increase under RA. 11199 is not timely because of the continuing hardship brought about by COVID-19 to the people and to the business sector.

SBN 2027 also stated that other scheduled contribution rates and the 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.

"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, so that the people will be able to have financial breathing space to be able to adjust to the on-going National Emergency," Gordon said.

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