Government Benefits That Will Help You in ‘Adulting’

The government provides Filipinos social welfare services through the Social Security System (SSS), the Government Service Insurance System (GSIS), the Home Development Mutual Fund (Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth). To ensure that everyone has access to these services, employers and employees are required by law to contribute to these agencies through salary deductions as specified in the  Philippine Labor Code.

Filipinos who are not formally employed in the private or public sector may still get these social service benefits when they apply as voluntary members. For this, they need to complete the membership requirements of each agency. 

While most workers are aware that they can avail benefits from these agencies, few actually know what those benefits are. Here’s a rundown of the benefits you can get from them. 

Social Security System (SSS)

SSS is a social insurance program that aims to provide protection to its members and beneficiaries who work in private sector. It is the counterpart of Government Service Insurance System (GSIS) which is provided for those who work in government. SSS members can avail of maternity, sickness, disability, retirement, funeral, and death benefits. It also allows qualified members to get salary, housing, business, and educational loans.

The SSS contribution is 15% of an employee’s monthly salary. The employer is required to shoulder 10% while the remaining 5% is shouldered by the employee. Based on the SSS contribution schedule, the minimum salary credit is ₱5,000, while the maximum is ₱35,000. Thus, the minimum contribution per month could range from ₱750 to ₱5,250 depending on the person’s salary. Self-employed Filipinos/OFWs will shoulder the full 15%. 

Home Development Mutual Fund (Pag-IBIG Fund)

The HDMF, commonly known as Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya, Gobyerno) Fund, was established to provide a national savings program and an affordable house financing for Filipinos. Aside from housing programs, it also offers savings program and multi-purpose loans that qualified members can avail.

Pag-IBIG fund has a fixed monthly contribution of ₱200. For employed individuals, ₱100 will be shouldered by the employer, while the remaining ₱100 will be deducted from the monthly salary of the employee.

Philippine Health Insurance Corporation (PhilHealth)

PhilHealth implements the National Health Insurance Program that aims to provide Filipinos with financial assistance and access to affordable health services. It covers hospital costs, subsidy for room and boarding, medicine, and professional services.

Currently, contribution rate is still at 5% of the monthly basic salary. This is split between the employer and employee. The employer is required to shoulder half of the contribution and the remaining 50% will be deducted monthly from the salary of the employee. The minimum salary base is ₱10,000 and the maximum is ₱100,000, which is equivalent to the minimum contribution of ₱275.00 and the maximum is ₱1,375.00 per month.

Government benefits can help you financially prepare throughout adulthood.

Maximizing the Government Benefits

Membership to SSS, PhilHealth, and Pag-IBIG really helps, especially in times of emergencies. Most people take it for granted until they see the need for it.  Here are some of the ways you can make the most out of your contributions to these government benefits:

1. Be informed.
   Know more about how these government benefits can work for you. Aside from their usual benefit options, these agencies, from time to time, come up with new programs that may serve specific needs. Most of the information you need are available online so they are easily accessible. It is best if you also know if you are already eligible to avail of any programs or benefits from these government agencies. You can visit the nearest branch in your area and consult any of their representatives to know more about the details of your accounts.
   
   
2. Regularly pay your monthly contribution.
   Paying your monthly contribution is much easier if you are an employee because your contributions are automatically deducted from your monthly salary. But for voluntary members, there are multiple ways to pay for your contributions. You may pay directly to the government office near you, through accredited payment centers, or through banks. Missing out on your contributions may prevent you from availing benefits these government agencies have to offer when you need them.
   
   
3. Pay the maximum contribution.
   Most of these government services offer options to increase your monthly contribution. If your budget allows, it is best to choose the maximum amount of monthly contribution so you can also enjoy max benefits.
   
   
4. Pay loans, avail loan restructuring program
   If you have existing loans with these government agencies, you may choose to pay your loans, preferably in advance, or avail of a loan restructuring program to avoid interests and to make your loan settlement more manageable by choosing a longer payment period. 
   
   
5. Avail voluntary savings programs
   Both SSS and Pag-IBIG offer voluntary savings programs for its members. Enroll in the voluntary savings programs available to supplement your benefits with these government agencies.

Are these government benefits enough?

The services and benefits from SSS, PhilHealth and Pag-IBIG are just part of the social safety net provided by the government. As such, the basic purpose of these agencies is to allow people access to economic or social support from government so that they can attain or remain above the minimum standard of living.”

To assess whether these government benefits are enough greatly depends on your financial goal. It is beneficial to have a better understanding of how social safety nets such as the services offered by SSS, PhilHealth, and Pag-IBIG work. In most cases, these benefits only serve as a supplement, just to get by.

For retirement, some people count on the SSS pension to be the sole source of their retirement income, which should not be the case. SSS pension is not enough to cover all your basic living expenses, especially with rising cost of living and additional expenses to maintain good health as people age. And definitely, it will not be enough to cover medical care and maintenance medicines. If you want a more comfortable retirement, it’ll be good to consult with a financial advisor so they can help you find an investment product that will fit your needs and current income.   

For those looking to buy their own house, one can avail of PAG-IBIG’s housing loan. A qualified Pag-IBIG member could get up to ₱6 Million for a home loan. While that amount may be enough to cover the cost of a house and lot in provincial areas, it’s below the average housing cost in urban areas. For instance, properties in Quezon City can cost as much as  ₱8 Million. This means that if you’re looking to procure a property in an urban area, you would definitely need more than just the maximum loanable amount provided by Pag-IBIG.

Your adulting goals may get tangled in safety nets

Whatever you choose to do, it’s important to zero in on a goal. Goals allow a person to foresee and prepare for a future that he or she desires. Ideally, a person should set high, yet realistic and achievable goals. Once we know what we want, we can then determine how much we need. This allows us to review our current options and what more we need to achieve our goal. One thing is definite. These government-provided social services are not enough.

To be financially capable to support a relatively comfortable retirement, fund the purchase of a house, or to prepare for eventualities such as medical emergencies, you have to find, create, and develop additional fund sources on top of these benefits government provides. There are many ways to achieve this, but having a financial plan that matches your financial goals is a good start.

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