The cabinet has approved cuts to contributions to the Social Security Fund to 2% from 5% of employees’ base salaries from this month to November.
Based on the new rate, an SSF member will now chip in up to 450 baht a month from 750 baht previously during the three-month period.
The cuts, applied to contributions made by both employers and employees, should help both sides while boosting circulation and improving the post-Covid-19 economy, Ratchada Thanadirek, deputy spokeswoman to the Prime Minister’s Office said on Tuesday.
The deduction also applies to former employees who chose to continue contributing to the fund after they quit (the insured under Section 39), who will now pay 96 baht a month during the same period from 432 baht previously.
According to the Labour Ministry, the measure will ease the financial burden for 12.8 million SSF members by 13 billion baht and for 4.9 million employers by 11 billion baht. It will also add 24 billion baht to circulation.
The contribution cuts are the second round announced this year. In March, the cabinet approved cuts to 1% for employees and 4% for employers during March-May.
According to data on its website, the fund had 2 trillion baht as of September 30 last year, 79% of which was invested in low-risk securities and 21% in high-risk securities. Accumulated return from its inception in 1991 was 646.2 billion baht.
The coverage is divided into seven types: sickness, maternity, disability, death, child allowance, old age and unemployment.
The insured — all employees aged 15-60 in the system — and their employers each contribute 5% of the base salaries ranging from 1,650 to not more than 15,000 baht a month while the government contributes 2.75%. As of mid-October 2018, the government still owed the fund 56 billion baht.