Almost every Filipino works hard to provide for their family. Every centavo of their hard-earned money is most likely spent on the needs of their loved ones, but as the years go by and it is time to retire, it is good to know that Filipino senior citizens can receive benefits through Social Security System’s (SSS) Retirement benefit program.
There are two types of retirement benefit, the first one is monthly pension. This assistance is a lifetime cash benefit that is paid to the retiree who at least contributed for 120 months, before the semester of his/her retirement. The second retirement benefit is called lump sum. This is given to the retiree who has not paid the required 120 monthly contributions. The retiree will receive the total contributions he/she paid and by his/her employer, including interest.
According to SSS, the only qualified members must take note of the following:
- Member is 60 years old, separated from employment or ceased to be self-employed, and has paid at least 120 monthly contributions prior to the semester of retirement.
- Member is 65 years old, whether employed or not, and has paid at least 120 monthly contributions prior to the semester of retirement.
- Underground Mineworkers:
- Aged 55 years old and is an underground mineworker for at least 5 years (either continuous or accumulated) prior to the semester of retirement but whose actual date of retirement is not earlier than March 13, 1998; separated from employment or has ceased self-employment; and has paid at least 120 monthly contributions prior to the semester of retirement.
- Aged 60 years old, whether employed or not, and has paid at least 120 monthly contributions prior to the semester of retirement.
With monthly pension, the amount that the qualified member will receive depends on his/her paid contributions, his/her credited years of service (CYS) and the number of his/her dependent minor children that must not exceed five. There are three pension formulae and the highest amount resulting from these will be the amount that the retiree will receive:
- The sum of P300 plus 20% of the average monthly salary credit plus two percent of the average monthly salary credit for each CYS in excess of ten years; or
- 40 % of the average monthly credit or
- P1200, if the CYS is at least 10 but less than 20; or P2400 if the CYS is 20 or more.
Since it was stated that the amount that the retiree will likely receive is also reliant on his/her number of dependent minor children – it is also necessary to explain the allowance that the dependents are bound to receive.
“The legitimate, legitimated or legally adopted, and illegitimate children, conceived on or before the date of retirement of a retiree will each receive dependents’ allowance equivalent to 10 percent of the member’s monthly pension, or P250, whichever is higher,” (Social Security System).
The only entitled dependents to the allowance are five minor children beginning from the youngest, and no substitution is allowed. If there is an instance that there are more than 5 dependents, the legitimate, legitimated or legally adopted children shall be preferred.
The allowance of the said dependents stops when the child reaches 21 years old, gets married, gets employed or dies. But the dependents’ allowance still continues if they are incapacitated and incapable of self-support due to physical or mental defect that is congenital or acquired during minority.
In terms of the benefit payment, the retiree-member can choose to have his/her initial 18 months paid-out in lump sum, but discounted at a favored rate of interest under the discretion of SSS. From the 19th to successive months, the retiree will receive his/her pension per month.
Now, if the member dies, the primary beneficiaries will be given the 100% of the monthly pensions, if there are no primary beneficiaries within 60 months from the time the monthly pension commenced – the secondary beneficiaries will receive a lump sum that equals to the total monthly pensions corresponding to the balance of five-year guaranteed pension period, excluding the dependent’s allowance.
Whatever Bessy 