SSS Contribution: Is it worth paying the maximum rate?

For working-class Filipinos, the Social Security System (SSS) represents the best form of insurance or fallback. It provides a security net in case of illness, disasters, or financial problems.

An even bigger benefit is the retirement pension, which is a sure source of “income” during retirement years.

Of course, this is not all for free. Many employees are automatically deducted their SSS contributions every payday, so they don’t have any control over it. But there are also lots of voluntary members who are faced with a choice.

Should one pay the maximum possible SSS contribution? Would it be worth it?

SSS’s Pension Policies

SSS computes the pensions of its members based on the provisions of the Social Security Law. This is based both on the number of a member’s contribution, as well as the total amount of the contributions that have been paid.

  1. SSS computes the average of all these contributions from the date of the person’s coverage as a member.
  2. Or, it can also compute the average of the member’s contributions for the last five years.

Whichever is higher will then be used for the pension computation.

What does this mean for the SSS contributor?

First, note that for the pension, SSS computes for either the average of all contributions since the person became a member, or the past 60 months before the contributor retires.

This will cause many people to think of paying just the minimum required contributions for the first years, then jack up the contribution to the maximum during the last 5 years of employment.

By this reasoning, it will cause SSS to act on the period with the higher average contribution.

It is to be noted that the monthly allowable contribution is computed from the declared earnings of the individual member. This means that the member can theoretically “manipulate” his declared earnings to change the value of monthly contribution.

For example, Johnny earns around Php 15,000 every month in his self-styled job. He decides to contribute voluntarily to SSS on his thirtieth birthday, and pays only Php 110 every month.

Five years before he retires (on his sixtieth birthday), he jacks up the contribution to the maximum Php 1,760 a month. This nets him a pension of Php 9,900 every month.

On the other hand, his friend Mark decides to be a voluntary SSS member on the same day and contributes the maximum Php 1,760 a month from the very beginning.

Before he retired, he would have paid a total of Php 633,600. This is Php 495,000 more than what Johnny contributed.

Yet, by this logic, he would still only get the same pension of Php 9,900 a month.

But here’s the thing…

While the above example would seem like a clever move, there is one big problem — SSS does not allow massive jumps in the member’s contributions.

The system is built with specific policies meant to prevent the undue increase of contributions, especially prior to retirement or similar contingencies.

SSS Contribution Table

SSS strictly follows a contribution table that prescribes the maximum amount a person can pay depending on his income level.

For example, those earning roughly Php 1,000 a month can pay a maximum of Php 110 as contribution. While a person earning Php 15,000 and over can still pay this amount and stay an active member, he cannot simply jump to the maximum contribution.

sss-contribution-table

Increase in SSS contribution

Under SSS Circular No. 2015-007, a self-employed or voluntary member (including an OFW and non-working spouse), who is 55 years old and above:

  • can only increase his/her MSC (monthly salary credit) only once in a given calendar year 
  • and by one salary bracket only from the last posted MSC.

For Employed SSS members:

If both Johnny and Mark are employed members, the basis of their contributions/MSC is their actual compensation. Thereforeit is not possible for them to just choose any MSC or change to a higher MSC.

For Self-employed or Voluntary SSS members:

Since Johnny (in the example above) is self-employed or a voluntary member and was only paying P110 until he reached 54 years old, he can only increase his SSS contribution to P165 at age 55; P220 at age 56; P275 at age 57; P330 at age 58; and P385 at age 59.

He cannot jack up his contribution from P110 to the maximum P1,760 at age 55 or above.

The Loophole

Also under SSS Circular No. 2015-007, it is stated that a Self-employed or Voluntary member, who is below 55 years old, shall be allowed to change his /her MSC without limit in frequency and in number of salary brackets in a given calendar year.

If this is the case, then Johnny can actually jack up his SSS contribution from P110 to P1,760 at age 54 and receive the highest possible pension if the computation will be based on his average contribution from the last 5 years or 60 months before he retires.

Watch the video below on how this topic was covered by ANC on the Money with Ms. Salve Duplito.

At 5:02 of this video, Ma. Luisa “Louie” Sebastian, Assistant Vice President for Media Affairs of the Philippine Social Security System, said:

“If you will only consider PENSION, then probably that’s the way to go. You will increase your contribution rate 5 years before you retire.”

Therefore, if you really want to maximize your SSS contribution for your SSS Pension / retirement benefit alone, then you may pay the maximum SSS contribution only 5 years before you retire.

Other SSS benefits

Like what SSS has been stressing out, Pension isn’t the only draw of contributing to the SSS, though it is certainly the biggest.

  • In case of sickness or periods of maternity, SSS can provide considerable amounts to qualified/covered members.
  • Such is also the case during disability or death, with SSS doubling as an insurance system.
  • In times of financial need, SSS members can avail of a loan.
  • There are also special benefits in the case of calamities.

Each of these other benefits have different computations — but a good part is based on the amount of SSS contribution. A self-employed person who pays the maximum amount suited for his monthly earnings can get a lot more in benefits than someone who just pays minimum.

For example, in our Johnny vs Mark example, Mark would be eligible for a much higher salary loan owing to this levels of contribution.

After six years, for example, he can loan as much as Php 32,000 versus Johnny’s Php 2,000 pesos.

In the event of sickness, Johnny can only get Php 29.99 as his daily sickness allowance — a far cry from the Php 479.99 per day that Mark will get.

So, is it worth it paying the maximum SSS contribution?

In my opinion, YES, it’s definitely worth it!

It is important to pay the maximum monthly SSS contributions as long as you can afford it. This will ensure that you can take advantage of as much benefits as possible.

You’ll never know when sickness, or some unforeseen circumstances may strike. And that is exactly what SSS is for.

Other Alternatives to SSS

But, remember that self-employed and voluntary members also have various other options.

There are some private insurance companies that have packages similar to the benefits of SSS. Of course, they generally have more restrictive terms than those of SSS. Their policies may also be different, with the potential benefits of the pensioner dependent on the survival of the company.

But they are still an option.

In the end, it will be up to you to carefully weigh the pros and cons of each. Regarding the matter of voluntary SSS contributions, there shouldn’t be any question. Go all in. Pay the maximum if you can.

You may also watch this video courtesy of ANC On the Money on When to Pay the Maximum SSS Contribution.

Click here to read: 7 Steps for SSS Online Registration

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23 Responses

  1. Dolores B. Patong says:

    Gud day sss,i started at 330 in my sss now im ofw and paying 660..i want to know if what will be the effect when i finish my contract as ofw and be back in our place with no job..and as a member i will continue to pay my sss with voluntary from 660 to 330…what will be the effects to my benefits??

  2. marie catherine blanco says:

    good pm po.ako po aywidow 49 yrs old noongMay 1. Ako po ay voluntary paying my contributions pero napaka baba lang dahil sa dami ng aking binabayadanbuwan2.based po sa naitago ko mga resibo april to june 2013 pa ang lastko paghulog.hindi ko po naku kumpleto ang taon na ako ay nkkbayad.312 lang po ang last ko hulog (apr to june 2013 )gusto ko po sna ulit mag umpisang maghulog bwan2.ano poang maipapayo nyosa akin?pdpa rin po ba ako maghulog ulit mula jan.2017?at magkano po ang maisa suggest nyo amt ng bago ko monthly contributions.salamat po

  3. Manny says:

    thank you for this wonderful article. this answered some of the questions i have.

    would you also advice me on some of my questions about SSS? i have been a member since i started working around year 2000. last year (dec 2015), i left my employer to pursue a freelance work from home setting. i have stopped contributing to SSS since January 2016 as I was no longer formally employed. I decided to try to be a voluntary member so i went to SSS, there i learned that in my around 15yrs of working, I’m already qualifed to have a pension when I retire. My dilemma now is should I continue contributing? or should I wait until 54 yrs old and continue my maximum MSC? I was thinking, regardless I contribute or not, I’m already qualifed for a pension. so just to make sure I get the Max pension i will apply the Loophole upon reaching 54yrs old.

    I would really appreciate your reply on this. Thank you.

  4. antonio a liwanag says:

    paano ko ma check online ang hulog ko sa SSS kong ilan na ??/

  5. Elvira de Leon Pena says:

    I am a member of SSS since 1986.but when i checked my SSS contribution,he company i had worked did not pay any contribution.i am 60 yrs.old this coming december 26.coukd i possibly continue my monthly contribution?thank u!

  6. Ed villabert says:

    Pa email po nito. Tnx

  7. Yeth says:

    I am a voluntary member of the SSS. I am expecting a maternity benefit this week or next week since i filed my benefit claim on October 4, 2016 and told that approval will take 3-4 weeks. But when i inquired yesterday i was surprised by the status “denied” and the staff cant explain why. She told me that i have to wait until the papers return to their branch. Could it be possible that in the online inquiry you are eligible but will be denied. I’m just wondering.

  8. Bien Almendros says:

    When you pay the maximum monthly contribution and the member died. Could he get higher amount as a benefit?

  9. Rufelyn Shareth Paringit says:

    I am an employed paying member of SSS and also paid more than 120 contributions.What if i will stop paying SSS contri due to separation from work, will i still oblige to pay contribution 5 years before i will reached 60 yo to avail retirement/pension benefit?

  10. AMELITA salosa says:

    iam 55 yrs. old with a total of 123 contributions. I stop paying as a voluntary member bec. of financial problem. My last salary bracket posted was 8,000. Can i pay the maximum if ever i want to continue. thank you

  11. rolly bual says:

    Im rolly bual how i can get my sss no . So that i continue my member may i know also how many year my contribute

  12. What is the maximum age of retirement of the SSS member? Is it 65 years old similar to GSIS member?

  13. Ann C. De Leon says:

    I am a voluntary member almost 24 years na ko naghuhulog ng monthly contri ko.Im already 52 yrs old.im planning to continue paying until makarating me ng 59 yrs old.and my nonthly contri as of now is 880 pesos per month.My question is how much po kaya ang maging pension ko when ive reached 60 yrs old assuming na maka 30 yrs me makahulog ng Contribution ko?tks in advance.Mrs Ann C. DE LEON

    • The Pinay Investor says:

      Hi Mrs. Ann, some of the factors that the SSS consider when computing for SSS pension is the number of years of your contribution and the amount of contributions during the last 5 years. If I were you, increase your contribution when you turn 54 years old. Pay the maximum SSS contribution until you retire and you’ll have higher chances of getting almost the maximum SSS pension that the SSS could provide.

      • Ann C. De Leon says:

        Ok,thanks.Im already54 yrs old now.My date of birth is Nov5 1964.so this coming nov I m 55 yrs old already.my last contri is 1620.Can I pay the maximum payment this coming 2nd Quarter?month of July Aug and Sept?

  14. Apple says:

    I started making my contributions about a year ago and I am marking my 24month contribution come December of this year. I am paying 1760php per month. I have atleast 16 years to pay til I am 60 years old. How much is the possible pension that I can expect for my retirement.

  15. E Galope says:

    I just turned 59 and would like to start making voluntary contributions as I intend to retire in the Phils.. I became a member in 1978 and have been paying the monthly contributions until my family migrated to NZ in 1996. Can I start paying 1760PHP to avail of the max pension when I retire?

    • The Pinay Investor says:

      if you plan to retire at age 65, then yes, I suggest you start paying P1760 monthly contributions for the next 5 years.
      If you have time, please visit the SSS office if there’s one in your location or contact them through their Facebook page or through this email member_relations@sss.gov.ph, so that they can give you advice on your retirement benefit.

  16. Katheryn rosario says:

    Hello po 28 months palang po ang hulog ko pero etong pang 29 moths ko nag maximum napo ako kasi gusto kopo sana pag tanda ko ma avail ko ang maximum pension maavail kopa kaya yun? At halibawa po at maadvance payment kona po yun 120 months at my age of 40 wala po bang mating problema pav hininto kona at hintayin konalang yung 60 yrs old ko para mag pension?ok lng po ba ang advance payment at matapos ng maaga yun 120 months? Salamat po at god bless

  17. Charmjill Bacsarpa says:

    Hi!
    I am a new member of sss. A self employed individual. Is it possible to lower my contribution for the next month to minimum, like 600 pesos a month? I paid 2,160 this month. It seems that I cannot hepl to pay 2,160 everymonth since I am just a self employed individual. Please advise…Thanks

  18. Marvin says:

    Good day po. Ang katanungan ko po kung mag start po ako maghulog as voluntary member sa halagang 13,500 monthly credit salary, para ma complete ko po ang 120 contribution for my persion alone. ako po ay 48 years old na ngayon 2019. and after 5 years ay mag maximum ako ng hulog. Maaari ko bang maitanong sa inyo kung magkano ang makukuha ko sa pension ko at age 60. Marami pong salamat.

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