THE Social Security System (SSS) announced it will be paying higher funeral benefits starting next month following the approval by President Benigno Aquino III of the benefit enhancement program.
Under SSS Circular 2015-009 issued recently, the state-agency will increase funeral benefits from “a fixed amount of P20,000 to a variable amount ranging from a minimum of P20,000 to a maximum of P40,000,” depending on the member’s number of contributions and average monthly salary credit (AMSC).
Agnes San Jose, SSS vice president for benefits administration, said the increase will apply for all funeral benefit claims with date of contingency from Aug. 1, 2015 onwards.
San Jose said that new funeral benefits will be calculated using the fixed amount of P20,000 plus a percentage of a member’s total contributions and AMSC.
“The proposal to increase funeral benefits came about after our study revealed that the costs of burial services have climbed to an average of more than P40,000 or twice the current fixed amount of benefit SSS disburses for funeral claims,” San Jose said.
SSS funeral benefit is a cash grant given to whoever defrayed the cost of funeral expenses of the deceased SSS member.
At present, the amount of benefit is pegged at P20,000 regardless of the member’s number of contributions.
The new computation, which was formulated by the SSS Actuarial Department, will give due credit to members who are paying more number of contributions and with higher monthly salary credits, the official stated.
“To illustrate, a member who has paid one to 19 contributions with an AMSC of P10,000 would receive a benefit ranging from P20,000 to P20,999. While a member with at least 267 contributions and an AMSC of at least P15,000 would be entitled to a maximum benefit of P40,000,” San Jose said.
As a result of the increase, funeral claims is projected to go up by almost 12 percent or P332 million per year. SSS estimates that 50 percent of total funeral claims will be higher than P20,000 per claim.
SSS funeral benefit payouts as of April 2015 totaled P1.01 billion, which is 2.4 percent higher than the P987 million paid during the same period in 2014.
San Jose, however, assured that the increase will not impair the viability of the SSS funds and will not require a contribution rate hike.
“Funeral benefit disbursements account for only three percent of the total annual benefit payouts of the SSS, so its impact will be minimal,” she said, citing the recent actuarial study conducted by the SSS. “As long as the actuarial soundness of the SSS funds are guaranteed, we will not hesitate to implement any feasible increases in benefits, including the addition of new ones.”