Why OFWs need SSS coverage
Since last month, there have been numerous public conversations—and confusion—on the mandatory coverage of overseas Filipino workers (OFWs) under Republic Act 11199 or the Social Security Act of 2018.
The confusion seems to stem from the loss of the most critical point in the conversation, that SSS is the only agency that provides OFWs with seven types of benefits—sickness, maternity, unemployment, disability, retirement, funeral and death/survivorship pension—that they could depend on in times of contingencies.
The sad fact is that only 325,061 OFWs out of about 2.3 million deployed abroad based on the latest data from the Philippine Statistics Authority are actively paying SSS contribution as voluntary members.
Our lawmakers, especially Sen. Richard Gordon who was the principal author of the SS Act of 2018, recognized this predicament. Obviously, voluntary coverage for land-based workers is not working. While it is stipulated in the new law that bilateral agreements with other countries should include social security protection, this will take years to realize. The urgency to provide meaningful social protection to OFWs can’t be stressed enough: It must be done now.
Why do OFWs need SSS coverage? I can cite three reasons.
One, an OFW’s family needs protection when there is sudden loss of income. Many OFW families rely on remittances. It is hard to imagine if the OFW suffers from disability. With SSS coverage, sickness and disability benefits could be availed of by actively paying members.
For example, when an OFW gets sick, he will receive P600/day under the new highest MSC of 20,000 or P2,400 monthly contribution.
Two, the risk of involuntary separation abroad is high. Retrenchment or downsizing, natural and man-made calamities, inhumane and unbearable treatment by employers are only some of the situations that could cause an OFW to lose his or her job abroad. With SSS membership, an OFW could avail himself/herself of unemployment benefit.
Three, SSS is savings. At some point, an OFW will eventually retire. With savings in SSS paid through monthly contributions, he or she can enjoy a monthly pension to supplement his or her daily income. Admittedly, SSS pension would only supplement a retiree’s expenses because the amount is relatively low compared with the actual income as an OFW. When they retire, those with 120 qualified monthly contributions at P8,000 MSC will have a basic monthly pension amounting to P3,200. While those who are paying based on the P20,000 MSC will receive a pension benefit of P8,000 per month. This shows that the higher the contribution, the higher the pension.
However, the return of SSS contributions is very significant. To illustrate, let me cite as an example, Mang Rody’s case who was an OFW for 12 years. He paid SSS contributions for 124 months with a total amount of P13,262.80. Now on his eight year of receiving pension with SSS, Mang Rody has received P172,580 worth of pension. This is 13 times his total paid monthly contributions.
For OFWs who want to save more for retirement, SSS offers the Flexi-Fund program. This is a voluntary provident fund on top of the regular SSS membership. The good thing about the Flexi-Fund is that it has guaranteed earnings compounded monthly. Earnings at the end of the month are taken into account in the computation of earnings in the succeeding month so the funds accumulate. It gives an Annual Incentive Benefit to all its active members who retained individual accounts as of year-end. Simply put, the longer your savings sit in the Flexi-Fund the higher its income will be.
An OFW actually gets 61 times in return from his or her contribution or P58,000 in total lump-sum benefits for disability, death or retirement plus funeral grant even with only one paid contribution at the minimum MSC of P8,000. If the contribution is at the highest MSC of P20,000 or P2,400 monthly contribution, the OFW will receive a benefit amounting to P116,000.
Murphy’s law is a popular adage that says, “whatever can go wrong, will go wrong.” This encapsulates why OFWs should be compulsorily covered by SSS.
To date, discussions are ongoing on how to implement the compulsory coverage of OFWs while listening to the concerns of all stakeholders. SSS is arranging a meeting of the Joint Committee with the Department of Labor and Employment and Department of Foreign Affairs to resolve all concerns related to this provision of the SS Act of 2018.
It is an unpleasant situation that is difficult to accept, but OFWs leave their loved ones to find a better paying job that would ensure their family’s future. But with just one illness, accident or death, an OFW family’s stability will be put at risk. By being covered with SSS savings, an OFW and his or her family is secure that they could rely on their pension fund in times of contingencies.
****
Aurora C. Ignacio is SSS president and chief executive officer.
We welcome your questions and insights on the topics that we discuss. E-mail mediaaffairs@sss.gov.ph for topics that you might want us to discuss.
Comments