Social Insurance For Company Directors

[synchronise]

I am told that if you are a manager or a director of a company that you are not entitled to receive social insurance and do not need to pay the social insurance contribution. The reason behind this, I am told, is that managers and directors have enough money to be able to purchase private insurance and that they will therefore not use the social insurance benefits and therefore should not pay. I also understand that this was a recent change. Does anyone have any information on this?

I find this a little unusual because if paying the contribution was mandatory further revenue would be gained, alternatively directors and managers should have the choice to opt in or opt out. It also strikes me as counter productive in encouraging new start ups, as entrepreneurs will look at the risk of not having social insurance, and the added burden of having to purchase provide health insurance, which will likely supply you less cover for more money.

Can anyone shed any light on this?

[jumbo]

SOCIAL SECURITY

An employer with one or more employees must register and contribute to the Social Security Fund. Upon registration, employees will become “insured persons” entitled to benefits provided under the Social Security Act. The Social Security Act requires that the government, employers, and employees contribute to the Social Security Fund at the rates prescribed by law. At present, both employers and employees each make monthly contributions at the rate of 5% of the employees’ wages, while the government contributes at a rate of 2.75%. (According to the Ministerial Regulation concerning social contribution rates dated July 9, 2009, the monthly contribution rates for employees during July-December 2009 will be reduced from 5% to 3%. From January 2010 onward, the contribution rates will revert to 5% as usual.)

The Social Security Act does not cover government officials, employees of foreign governments and international organizations, employees working in foreign countries for Thai firms, teachers at private schools, students who work for schools, universities, and hospitals, and other types of employees according to royal decree. House servants are also specifically excluded from the definition of employee under the Act.

The Social Security Act requires all employers to withhold social security contributions of 5% from the monthly salary of all employees, up to a maximum of 1.500 baht per month. Employees with social security registration may file compensation claims for injury, illness, disability or death which is not due to work performance, childbirth, child welfare, retirement and unemployment.

[synchronise]

Thank you for that information.

So are you saying that employed directors (including Managing Director) and managers of a company need to contribute their personal % to the social security fund, as employees of the company and they will receive the same social security benefits, just as their staff do?

I have been told that directors and managers are not entitled to be part of the Social Security system and must buy private insurance.

[peterinbangkok]

I heard the law changed (since 1 yr) when I went 2 claim my wife's pregnancy expense (12000), 1 & a half month salary. However, they r still paying the 350 monthly expense for the child.

I am planning to stop paying to Social Security. I dont know how easy it is to stop now , after paying for 4 yrs. I pay for only me & my wife, we both r directors of the company Ltd. with 5 thai workers.

Any experiences or suggestions?

[Sunbelt Asia]

Around 2005-2006, the Social Security Office had announced that all Employers (this include the Authorized Director and/or shareholders of the company) shall have to rights to enrol themselves in the Social Security Fund System as the Secure Parties. In fact , if you had paid in the system in the first place, they refunded the money.

They foresee that as the employers were able to bare their staff (employee)’s salary. They should be able to bare their personal health insurance.

For your information medication supplied to the patients using Social Security Insurance are generic medicine, as well as the quality of the treatment are also limited.

[sunbelt][/sunbelt]