Somchai insists on SSF cuts

The Labour Ministry will go ahead with the plan to cut employees and employers' Social Security Fund contributions to 2.5% despite opposition from labour organisations, says permanent secretary Somchai Chumrat.

Mr Somchai said yesterday the ministry would ask the sub-panel on insurance benefits to look into the feasibility of the plan, and to suggest alternatives for the proportion of contribution money allocated to each fund within the social security system.

The sub-panel is also tasked with preparing draft ministerial regulations for the contribution cut. He expected the details of the plan to be worked out in two months before Labour Minister Paitoon Kaewthong could propose it for cabinet approval.

Mr Somchai's assertion that the ministry would move ahead with its SSF contribution cut plan came after a labour organisation, the Labour Congress of Thailand, voiced its opposition to the plan. It also threatened to gather signatures to push for the dismissal of the labour minister.

A labour source said the Labour Congress opposed the contribution cut plan for fear it would jeopardise employees' future SSF benefits, particularly the benefits from the pension fund.

Nevertheless, Mr Somchai said while the ministry would not delay its plan, the secretary-general of the Social Security Office, Pan Wannapinit, would tell Mr Paitoon about the Labour Congress's opposition. Mr Pan, also secretary of the Social Security Commission, said the cut in the SSF contribution from employees and employers to 2.5% would result in a reduction of the total monthly contribution into the SSF of 11 billion baht.

However, this would not affect the SSF's financial viability.

Mr Pan added that without the contribution cut or any other intervention, his office estimated that up to a million workers could lose their jobs. Then, the SSF's unemployment insurance fund would have to disburse up to 30 billion baht to those made jobless.

For this reason, cutting employers' SSF contribution would help them survive the economic slump and continue to employ all their staff.