Longer social security contribution period proposed

Tuesday, April 13, 2010
Issue 985, Page 2
Word count: 611
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The Third Standing Committee of the Legislative Assembly proposed to the government yesterday that under the new social security system, employees should be required to continue their monthly contributions after a 30-year period, as long as they have not yet retired.

Committee president Cheang Chi Keong recalled that during the first reading of the bill, a number of lawmakers had also questioned the reasons for fixing the contribution period to the Social Security Fund (FSS) at 360 months.

The bill currently states that employees will no longer need to contribute to the FSS after 30 years of doing so, but employers will be required to continue to contribute for their staff.

Cheang said this practice would not only give rise to “problems in actual implementation”, but some employees were also worried about whether or not their bosses would really make monthly contributions for them after the 30-year period.

In addition, for non-mandatory contributors such as self-employed and non-employee residents, Cheang said some of them may choose to start contributions 30 years immediately before they reach 60 years old, so that they can apply for age pensions once they finish their 30 years of contributions.

This, he added, is “unfair” to the rest of the contributors.

Hence, Cheang Chi Keong said the standing committee has reached a consensus that the contribution period needs not to be fixed. Employees must have to contribute to the FSS whenever they have a job, even though they may have already done so for over three decades.

Yet, the 30-year period will change to become one of the basic requirements for contributors who wish to receive age pensions.

This means although an employee has to continue to make social security contributions when 30 years have gone by, he or she will already have the eligibility to apply for age pensions.

Cheang said the idea of continued contributions is consistent with the practice in the existing social security system.

As for non-mandatory contributors, the standing committee proposed that they could stop contributing and be allowed to get age pensions immediately after the 30-year period.

“It may look unfair superficially [the contributions between employees and non-employees],” Cheang Chi Keong told reporters.

“But non-mandatory contributors always need to contribute a higher amount than employees, and they can only enjoy age pensions at the end whilst employee contributors can also benefit from medical and hospital allowances as well as bankruptcy compensation,” he added.

At present, employees are responsible to make a MOP15 contribution and non-mandatory contributors MOP45 per month.

Cheang said the government representative will give an response to their proposal in the next meeting to be held at 3.30pm this Friday at the Legislative Assembly.

On the other hand, in response to the problems found in the existing social security system that some non-mandatory contributors will keep delaying the payments and then pay a lump sum only at 60 years old, Cheang said a two-month deadline may be introduced for these people to settle their outstanding contributions.

He described that some people were worried about “not being able to live long enough and reach 65 years old to receive the social welfare”, despite having contributed to the FSS in full for 30 years.

“Therefore, they will not make contributions on a regular basis when they are still young, but choose to deliver a lump sum amounting to the outstanding contributions only when they reach the age of 60,” he said.

In order to prevent this kind of one-off contributions, Cheang Chi Keong said the standing committee proposed a two-month deadline to settle outstanding amounts.

The bill also suggests a monthly three percent interest rate and a minimum penalty of MOP50.

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