WINDHOEK: The Social Security Commission (SSC) on Wednesday announced that it will increase employee and employer wage contributions to its Maternity, Sick Leave and Death Benefit (MSD) Fund with effect from 01 March 2013.
At a media briefing in the capital, SSC Chief Executive Officer Kenandei Tjivikua explained that the current maximum contribution per employee, which is N.dollars 108, will be increased to N.dollars 162 for a member earning more than N.dollars 9 000 per month.
The wage contribution ceiling will be adjusted from the current N.dollars 6 000 to N.dollars 9 000 per month.
“In essence, the wage ceiling is being adjusted upwards with an additional N.dollars 3 000, which will result in a contribution increase of N.dollars 27 to the employee and the employer respectively,” he noted.
The adjustment only affects employees who earn more than the monthly basic wage of N.dollars 6 000, and there will be no contribution increases for members earning below that amount.
The SSC Chief also explained that the contributions of employees earning below N.dollars 9 000 per month will be calculated on a formula of 1.8 per cent, which will be equally contributed by the employee and employer.
For an employee earning N.dollars 7 000 per month, the contribution to the SSC will be N.dollars 126 in total, which will be divided and contributed equally by the employee and employers, meaning N.dollars 63 each.
Tjivikua said the SSC is mindful of the fact that this ‘moderate’ wage ceiling adjustment may directly impact the budgets of employees and employers. Therefore, the increments will only be implemented as from 01 March 2013.
The five months in-between should be used by employees and employers to ensure that adequate budgetary provision is made for the increase.
He noted that since 2008, the SSC has periodically increased the benefits paid under the MSD Fund, without any corresponding adjustments to the contributions payable. Now, maternity leave benefits of up to N.dollars 10 500 are paid, out while all members’ contributions are based on a maximum wage of N.dollars 6 000 per month.
The SSC will also embark on a media campaign to sensitise employees and their employers about the contribution changes, while written correspondence will be forwarded to all employers to advise them of the envisaged changes.
The last such increase was implemented in 2008.
There are currently 440 000 employees registered with the SSC under its three active funds – the MSD Fund, the Employee Compensation Fund (ECF) and the Development Fund.
The SSC paid out an amount of N.dollars 85,8 million in claims under the three funds from January to 31 August 2012.