Jun 17, 2013

SSS Arrears and the Kasambahay Law: Frequently Asked Questions (FAQ)

After I posted my article on the SSS, Philhealth, HDMF and the Kasambahay Law, a few follow-up questions on the SSS were posted by some readers – and all of them are about arrears.

I'm posting the questions here, and the answers, based on what the SSS customer service hotline told me.

1. Our helper has been with us for several years already, but we are beginning to pay for his/her SSS contributions only this year. Will we need to pay for the past years?

Yes. If your househelp has been with you since 1990, you will have to pay contributions for all months starting from 1997 because the Social Security Act took effect in 1997. 

In addition, there is a 3% penalty per month of delay, as per Section 22 of the Social Security Act:
If any contribution is not paid to the SSS as herein prescribed, [the employer] shall pay besides the contribution a penalty thereon of three percent (3%) per month from the date the contribution falls due until paid. 
If your kasambahay has been with you for ten years on a P2,000 monthly salary, expect to be charged more than P60,000 total of contributions due plus penalties. (Ouch, I know!)

2. What figures will the computation of SSS contribution arrears be based on?

The computation will be based on the total contribution due, based on the kasambahay's salary.

Although the rule before the Kasambahay Law was that even those whose salary fell below P5,000 had to contribute an employee share, the SSS considers it your obligation, not theirs, to collect from your employee the employee share.

Therefore, their presumption is that you had collected that share in previous years and simply did not remit it to them.

3. Will I have to pay the entire sum in full all in one blow?

You may be able to arrange for payment in installments with your SSS branch office, but that, too, will be subject to additional interest.

4. After the contribution arrears have been paid, will my kasambahay be considered an active member for all the years paid? Will those years be included in the computation of the kasambahay's retirement pension?

Yes.

5. Ever since our kasambahay has been with us, we have been giving him/her money to pay SSS contributions. But recently, we discovered that our kasambahay has not been remitting those payments to SSS! What happens now? Will the SSS charge me for all those years that I inadvertently failed to pay for my kasambahay's contributions?

Unfortunately, yes. The SSS considers this an issue between you and your kasambahay. The SSS will have no part in it. As far as the SSS is concerned, you did not pay contributions, and they will base their computation of arrears on what they have on record.

6. Our kasambahay has been given a raise four times already since he/she began working with us. Which salary shall the SSS use to base its computation for my arrears?

You shall be asked to fill out a form on how much your kasambahay's wages had been in past years. This is a legal document, so you are expected to tell the truth.

DISCLAIMER: All information posted on this article are based on what I understood from my calls to the SSS hotline. I have made every effort to make it as accurate as possible, but I accept no responsibility for consequences that may befall you should any of the information here turn out to be wrong. Should you be aware of any inaccuracies in the information posted here, please inform me so that the erratum may be announced and the correction made. Thanks!

The Nanay Notebook is written by Blessie Adlaon, a work-at-home and homeschooling mom of four. Check out our About page to know more about this blog's author and our policies on advertising, press releases, and reposting.

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