Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1806)
The purpose of Presidential Decree No. 1806 is to amend Section 12 of Presidential Decree No. 1636, which amended Republic Act No. 1161 (the Social Security Law), specifically to reinstate a provision regarding the maximum coverage earning or compensation of Social Security System (SSS) members that was inadvertently deleted.
It provides that the maximum covered earnings or compensation of all SSS members shall be limited to P1,000 per month unless otherwise provided by the Social Security Commission through rules and regulations considering actuarial calculations and rate of benefits.
Employee contributions are based on a schedule that corresponds to the employee's monthly salary or earnings, with specific monthly salary credits and contributions assigned to different salary brackets effective January 1, 1980.
The employer is required to deduct and withhold the employee's contribution from their monthly salary during employment and must issue a receipt for all contributions deducted or indicate the deductions on the employee's pay envelope.
The amendment took effect immediately upon issuance, i.e., January 16, 1981.
The combination integrated and amended related provisions about employee contributions to SSS for clarity and to reinstate important provisions regarding contribution schedules and maximum coverage earnings that were omitted.
The total monthly contribution is P50.40, composed of P30.40 from the employer and P20.00 from the employee.
The Social Security Commission must consider actuarial calculations and the rate of benefits in adjusting the maximum covered earnings.
Yes, the law states the maximum covered earnings limit may be changed through rules and regulations issued by the Social Security Commission.