The Social Security Office has dismissed rumours it cannot afford to pay compensation to employees affected by the Covid-19 measures due to the overwhelming number of applicants and the market slump that may have affected its investment.
The assurance came after the Social Security Fund (SSF) was criticised for being very slow to make the payments. The delay has raised questions whether the SSF really has the money, or its investments are badly affected by the world financial turmoil that began with the oil price slump and exacerbated by the coronavirus outbreak.
The SSF management explained on Monday the speculation was unfounded and the delay was caused by the failure of some employers to promptly endorse its former employees’ right to the benefits.
The SSF urged employers to help speed up the process so payments can be made to the employees.
Some 1.17 million people applied for benefits after they were laid off in the wake of the Covid-19 outbreak. Of the number, 219,000 were not qualified, leaving the total at 958,000. On average, 30,000 people have applied for the benefits each day since the outbreak took its toll on the economy.
From April 20 to May 2, the office approved payments to 456,000 people, totalling 2.3 billion baht. Payments to another 200,000 people are being processed. The applicants of the remaining 294,000 people are put on hold pending endorsement from their former employers.
“We urge some 50,000 employers to speed up endorsing their rights to the compensation,” said Tossapol Krittawongwimarn, secretary-general of the office.
He assured the office had enough money to pay the members and the fund is liquid and accountable “to the last satang”.
Of the 2-trillion-baht fund as of the end of March, 82%, or 1.7 trillion baht, is invested in low-risk securities — mainly bonds issued by the government, Bank of Thailand or state enterprises whose debt is guaranteed by the government, as well as investment-grade debentures. The remaining 18%, or 361.7 million baht, is invested in local stocks, foreign stocks, infrastructure, gold and real estate investment units.
The portfolio structure is in line with the office’s regulations requiring an investment of at least 60% in low-risk securities.
“Please have confidence in the stability of the fund. We insist we’re ready to pay the benefits in all cases. Our investments are supervised by the Social Security Committee, with representatives from employers, employees and experts from various organisations. Our investment management subcommittte also comprises specialists from the Securities and Exchange Commission and Bank of Thailand, among others,” he said.
Some 11.7 million members of the fund — all employees aged 15-60 in the system — and their employers each contribute 5% of the employees’ base salaries for the portion up to 15,000 baht a month, while the government contributes 2.75%.
Due to the virus outbreak, the Labour Ministry in mid-April cut the contribution rates to 4% for employers (up to 600 baht a month from 750 baht) and 1% for employees (up to 150 baht from 750 baht) for March, April and May this year to help relieve the burden. Employees’ benefits remain intact.
Employees who are furloughed because of 14-day quarantine or government-ordered or temporary business closures will get 62% of daily wages from the SSF for up to 90 days. Their employers must also confirm the business closures are due to unforeseen circumstances for force majeure (Covid-19).
In the case of layoffs, the employees get compensation equal to 70% of their daily wages for not more than 200 days.
In both cases, the base salaries used in the calculations are capped at 15,000 baht a month, the same base used in calculating contributions to the SSF.
