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Labour group opposes cuts in contributions to social-security scheme

Labour group opposes cuts in contributions to social-security scheme

MONDAY, January 22, 2018

THE CONFEDERATION of Thai Labour (CTL) has expressed opposition to a proposal to cut employers’ and employees’ contributions to the national social-security scheme.

The National Wage Committee approved the proposal last week as one of the measures to ease impacts on employers who would have to pay the higher minimum daily wage. 
Effective April 1, minimum daily wages across the country will rise by between Bt5 and Bt22 depending on where workers are based. 
As employers’ representatives complained about impacts from the hike, several other measures were approved. For example, employers will be allowed to claim tax deductions equivalent to 1.5 times wage expenses. Also, employers will be able to reduce their contributions to the social-security scheme on a temporary basis. 

‘Affects old-age benefits’
The proposal approved by the National Wage Committee suggests the contribution rate for employers, which now stands at 5 per cent of their employees’ salary (calculated at Bt15,000 at most), should come down by 1 per cent for about a year. The employees’ contribution rate of 5 per cent would be lowered by the same rate over the same period. 
“I think the wage hike and the contribution to the social security scheme are two different things,” CTL president Manas Kosol said yesterday. 
He said the reduced contribution rate would affect employees’ old-age benefits, and noted that, at this point, the Social Security Office (SSO) had not yet approved the proposal. 
“We will oppose this proposal when it is forwarded to the SSO,” Manas said. 
Labour Ministry’s spokeswoman Petcharat Sinauy said impacts on the old-age benefits would not be significant given that the reduced contribution rate would be valid for just one year. 
According to Petcharat, about 4 million Thais are now paid minimum daily wages.
SSO secretary-general Dr Suradej Waleeittikul said his agency was in the process of studying the proposal’s impacts. 
“We will check the impacts from the proposal and impacts from different reduced contribution rates such as 0.3, 0.5, 0.8 or 1 per cent, and reduction-validity periods like three months, six months and one year,” he said. 
He said the SSO board would probably discuss the issue at a meeting next month.