SC declares valid 2014 SSS premium pay hike

The Social Security System (SSS) building

MANILA, Philippines – The Supreme Court affirmed the January 2014 0.6-percent increase in the monthly premiums for Social Security System (SSS) members.

In the decision written by Associate Justice Marvic Leonen, the high court also declared as valid the SSS circular mandating that “the employer and the employee shall equally shoulder the 0.6 percent increase” with the employer paying the contribution rate of 7.37 percent from 7.07 percent, and the employee paying 3.63 percent from 3.33 percent.

The high court’s ruling promulgated Apri 2 but made public Monday by its Public Information Office declared as valid three 2013 issuances from SSS about the increase.

The high court issued the ruling as it dismissed the petition filed by the Kilusang Mayo Uno and several others that challenged the increase and attacked the validity of Republic Act 8282 or the Social Security Act.

“Collateral attacks on a presumably valid law are not allowed and that petitioners in this case are collaterally attacking the validity of Social Security Act (RA 8282) by putting in issue not only the validity of the exercise of respondents SSS and Social Security Commission’s (SSC) power under the said law but also the validity of the delegation of power to the SSC under the said law to fix the contribution rate by claiming the said delegation to be incomplete in all its terms and conditions,” the high court said.

It pointed out that SSS Law already contains enough guide in fixing the monthly contribution rate and the minimum and maximum monthly salary credits.

Section 18 in relation to Section 4 (a) of the Social Security Act, the Court said has vested the necessary powers in the SSC to fix the minimum and maximum amounts of monthly salary credits and the contribution rate.

“To question the use of ‘actual calculations’ as [a] factor for fixing rates is to question the policy or wisdom of the legislature, which is a co-equal branch of the government,” the high court said.

With regards to the petitioners argument that the increase in contribution is in violation of Section 4(b) of the of the Social Security Act providing that increases in benefits shall not require any increase in the rate of contribution, that high court said an examination of the provision and the assailed issuances reveals that the questioned increase in contribution rate was not solely for the increase in members’ benefits, but also to extend actuarial life….’”

“To disregard the actuarial soundness of the reserves would be to go against the policy of the law on maintaining a sustainable social security system,” it added.

The Court also pointed out that “given the past increases since the inception of the law, the contribution rate increase of 0.6 percent applied to the corresponding monthly salary credit does not scream of unreasonableness or injustice.”