by Venus Zoleta, on category "Government Services"
March 1, 2019
Getting laid off from work is undoubtedly one of the most traumatic things to experience in one’s career. Aside from the pain of rejection, a terminated employee has to deal with the challenges that come with the sudden loss of income. There are bills to pay, mouths to feed, and other financial responsibilities that won’t go away.
Government employees enjoy unemployment benefits from the GSIS, which protect them from the financial impact of involuntary separation from the service.
Private employees who unexpectedly lose their job now have a reprieve as well through unemployment insurance mandated by the newly enacted Republic Act 11199 or Social Security Act of 2018. Qualified members are entitled to SSS unemployment benefits that help ease their financial burden while they’re looking for a new job.
Even if you think your chances of getting terminated from work are slim, it’s important to understand what the unemployment insurance provision in the new law means.
Here are the key facts on the SSS unemployment insurance you must know:
The new Social Security law states that involuntarily separated employees will receive a cash benefit worth 50% of their average monthly salary credit (MSC).
To know your MSC, check the SSS contribution table. Find your salary bracket under the leftmost column (Range of Compensation) and see the corresponding MSC under the next column.
Proponents of the unemployment insurance provision in the law clarify that it isn’t a loan. The unemployment benefits are a new addition to the six existing SSS benefits (sickness, maternity, retirement, disability, death, and funeral benefits) that qualified members can avail.
This means you don’t need to pay the SSS for the financial assistance you will receive.
Even if you receive financial aid while you’re unemployed, that doesn’t mean you can be too relaxed and complacent in finding a new job.
The SSS unemployment benefits last for only two months, which means members can only receive them once every three years. They’re just meant to help you get by as you’re on a job-hunting mode.
SSS unemployment benefits can only be given to members who are 60 years old and below. Qualified SSS members have paid 36 or more monthly contributions. The 12 months of these must be within 18 months immediately before the involuntary unemployment. This means the last employer should have consistently remitted your SSS contribution for at least 12 months before your separation from the company.
“Can any SSS member who’s unemployed claim unemployment insurance?” You might wonder.
It depends on the nature of the person’s separation from work. The law clearly states that only those who are “involuntarily unemployed” are entitled to SSS unemployment benefits. This means the law applies only to those who got laid off from work due to merger, reorganization, or bankruptcy of the employer.
On the other hand, if your unemployment is voluntary—meaning you resigned from work, the SSS won’t give you unemployment benefits.
“What about employees terminated due to unacceptable work performance or violation of company policy?”
The new Social Security law doesn’t say anything about the acceptable cause of involuntary separation. But according to former Social Security Commission Chairman Amado Valdez, the unemployment benefits are intended for SSS members who lost their job “without fault on their own.”
And according to Investopedia’s definition, unemployment insurance is paid to eligible people who have “faultlessly lost their jobs.”
To be able to provide SSS unemployment benefits, the government needs additional funding, of course. And where it will source the funds? From the increased monthly SSS contribution.
RA 11199, which requires SSS to pay unemployment benefits to jobless members, is the same law that raises the SSS contribution rate from 11% to 12% in 2019, 13% in 2021, 14% in 2023, and 15% in 2025. Two-thirds of the increase will be shouldered by the employer, while one-third will be deducted from the employee.
So if you have a job now, you may choose to see the silver lining—the increased deductions on your salary might come useful for when you suddenly lose your job.
The implementing rules and regulation (IRR) for the new law hasn’t been created yet as of this writing. Upon release of the IRR, you’ll have a clearer idea of how the SSS unemployment benefits will work, as well as how to apply for such benefits when you need them most.