THEORITICAL FRAMEWORK

Everybody wants security. Good security means freedom from want and freedom from fear. For those
who have enough money, they may resort to get insurance offered by known insurance companies other
than having the social security membership. But for employees earning low income or for those who have
minimum wage, the best insurance for them and their family’s future is the social security system. While
it promotes good welfare for every public or private employee, it also provides financial protection for
families.

The SSS is compulsory to all employees aged 60 or less and their employers. Contributions to the SSS are
made both by employees, by deduction from their salaries, and by their employers, who are responsible
for remitting contributions. In exchange of the monthly contributions, members will enjoy insurance
benefits such as sickness, maternity, disability, retirement, death and funeral and salary loan. Social
Protection addresses the levels of vulnerabilities, deprivations and risks to the poorest segment of society
and security for the relatively non-poor against life shocks such as natural calamities, etc. (Norton,
Conway and Foster, 2001 : p. 6). Though all of the employees may have been paying for their social
security tax for its future benefits, the level of awareness towards the said benefits that they have is very
low (Jain and Goyal, 2012). Okan Veli Safakli (2007) concluded that public awareness, public information
were the factors often overlooked in an insurance system. In which, Social Security System is an insurance
program. Many people may not understand the incentives created by the Social Security tax, suggesting
that they may overreact or simply ignore it (Burman, Cue, Pierre and Tian, 2014). Also, according to Global
Network’s research, inadequacy of benefits could have an impact to the minimum wage earners too.
Insurance programs in particular provide miniscule amount of benefits to its members. Thus, services fail
to adjust with inflation. Sta. Ana (2002) relates this observation in health insurance policies that cover
very limited amount of the medical care expense, and pension payments to retirees. Nowadays, people
are just filing for SSS because it is a requirement for their employment and not really aware what was the
said tax for or not satisfied of its promised future benefits. But in contrary, older generation seems to care
a lot with these kind of taxes and see this as an investment. Leibman, Luttmer and Saif (2009) find labor
supply and retirement decisions of older workers to be sensitive to the variation. A survey by Liebman
and Luttmer (2012) finds a fair amount of knowledge of some social security provisions. Thus, SSS
conducts conferences to raised awareness for its campaign designed to strengthen the importance and
relevance of SSS programs and services for its members (pia.gov.ph).