State to pay unpaid SSO contributions

unpaid contributions amounting to 56 billion baht to the Social Security Office in compliance with the Fiscal Responsibility Act, says the Budget Bureau’s chief.

The payment will be made based on the assumption new pension recipients of the Social Security Fund (SSF) will match the inflow with the outflow, said Dechapiwat Na Songkhla, the Budget Bureau director.

The government’s financial liquidity will also be taken into account for the payment as it has an investment burden.

For new contributions to the SSF, the government will make regular payments, he said.

Unlike other countries, the Thai government is required to make matching contributions to the SSF, said Mr Dechapiwat.

Even though employers and employees are strong enough to make contributions to the SSF without the government’s contribution, the state will continue to contribute to the fund, he said.

Employers and employees are required to contribute 5% of monthly salary with a maximum of 15,000 baht to the fund, while the government pays 2.75%.

Employers, employees and the government are subject to contributions to the SSF, which provides compensation to insured employees in case of sickness, unemployment, disability or death.

As of the end of last year, the SSF held 1.76 trillion baht, of which 1.24 trillion baht came from contributions by the fund’s subscribers, their employers and the government and the rest from returns on investments.

Last year the SSF earned 5.8 billion baht from returns on investment.

About 15 million Thai and foreign workers are insured under the current social security system.

The Fiscal Responsibility Act stipulates the government must pay contributions, compensations or any liabilities to abide by law to avoid unpaid burden.

Mr Dechapiwat said the Prayut Chano-cha administration has paid higher than the contribution requirement each fiscal year to the SSF, in order to lower the burden incurred from contributions that were not paid by previous governments.

For instance, the government paid 40 billion baht to the SSF in the 2017 fiscal year, higher than the required contribution of 39 billion in that year.

The government also contributed 42 billion baht for the 2018 fiscal year, exceeding the 33 billion required over the period.

The Labour Ministry recently proposed the monthly contribution ceiling to the SSF be lifted from 750 baht to a maximum of 1,000 baht a month.

The contribution rate will still be the same at 5% of monthly salaries, but the maximum salary used to calculate the 5% individual contribution would be raised from 15,000 baht to 20,000 baht.