‘Law deferring SSS contribution increase provides respite for pandemic-hit workers’

Senator Joel Villanueva today hailed Malacañang’s signing into law a bill granting the President the power to hold off Social Security System (SSS) contribution hikes during the COVID-19 pandemic.

“Maraming salamat po sa ating Pangulo. But having been given that power, the President must now pull the trigger so to speak,” said Villanueva, chair of the Senate labor committee.

“The fate of the law is now on his hands. It will not automatically take effect. It is up to the President to exercise that prerogative,” said Villanueva, who authored the measure in the Senate.

Under Republic Act No. 11548, the President, upon the recommendation of the Social Security Commission, has the power to suspend the 1 percentage point increase on SSS membership contribution  that was scheduled to take effect January 1, 2021.

Villanueva believes that the President will invoke that provision and order a freeze.

“Otherwise, he would have vetoed it. There is no point in affixing your signature on a law you do not intend to implement,” he said.

“The effect of not exercising that power is to give the go signal to SSS to start collecting higher pension premiums from its members,” Villanueva said.

In March 2020, Duterte through Proclamation No. 929 placed the entire country under a state of calamity due to the   coronavirus pandemic. Through another proclamation, he extended the duration to Sept. 12, 2021.

SSS contributions were supposed to increase from 12 percent to 13 percent of a member’s monthly salary starting Jan. 1, 2021.

“The law the President recently signed gives him power to press the ‘pause’ button on the scheduled increase,” Villanueva said.

Doing so will not hurt the financial viability of the state-run pension fund for private workers “as it is temporary, not permanent.”

“The suspension is not a forgiveness but a freeze, for the time being and not forever. It will not cover the entire monthly contribution but only the increase that is supposed to take effect this year,” Villanueva said.

“When there is little to draw from an economy bleeding jobs, from businesses hemorrhaging from lack of sales, from workers who have to work shorter hours for less, then the government must extend to those who pay this payroll tax the same relief it had extended to those with house rents and bank loans and that is a moratorium,” he said in his speech sponsoring the bill in the Senate.