Ghana's Social Security Scheme: Contributions and Key Benefits

Understanding Ghana's Social Security System reveals a solid framework intended to offer Ghanaian residents financial security and support throughout their lives.

The Ghanaian Social Security Scheme is a crucial safety net that provides benefits like retirement, invalidity, survivors' support, and maternity and assures the well-being of its residents.

The information below provides an in-depth analysis of Ghana's Social Security Scheme's requirements for contributions and significant advantages for members.

This article is helpful for those seeking financial security and peace of mind for themselves and their family. Similarly, Ghanaian employers can find helpful information on contributions and compliance.

Ghana's Social Security Scheme

The government of Ghana created the Social Security Scheme as a comprehensive social security program to offer social safety and financial assistance to working individuals and their dependents. 

The program ensures Ghanaians' welfare and subsistence by providing various benefits, including retirement, incapacity, and survivors' support benefits.

The Social Security and National Insurance Trust (or SSNIT) manages the program, registers employers and workers, manages all member records, collects employer and employee contributions and handles benefit payments. It is the most significant non-bank financial institution in the country.

The Social Security Scheme promotes social welfare and aids people and families in maintaining financial stability through significant life stages and unforeseen circumstances.

SSNIT was founded in 1972 to administer the Security Scheme. The scheme was an act of parliament implemented in January 2010, replacing all pension schemes in the country. 

Ghana's Social Security Scheme Contribution Requirements

Individuals must meet specific criteria to participate and benefit from the scheme. The essential eligibility requirements include the following:

• Registration. Employees and employers must be registered with SSNIT to contribute and benefit from the scheme. Registration involves providing personal information, employment details, and other irrelevant information.
• Age requirements. Individuals must be 15 years or older to contribute and enjoy benefits. However, since the main focus of the scheme is providing retirement benefits, eligibility for full pension benefits starts at 60. 
• Employment. Individuals must be employed in the formal sector and working for an employer registered under SSNIT. The scheme applies to citizens and non-citizens legally employed in the country. 
• Contributions. Eligible individuals must fulfil their contribution obligations. 

Calculation of Contributions

Ghana's Social Security Scheme follows a three-tier contribution structure. The first two tiers are mandatory contributions, while the third is voluntary. 

• First Tier. It is the primary and mandatory scheme for all Ghanaian workers. Employers must make 13.5% contributions on behalf of all employees. SSNIT manages this contribution. 
• Second Tier. It is a defined contributory Occupational Pension Scheme. It is mandatory for all Ghanaian workers. They must contribute 5%, managed by approved Trustees. 
• Third Tier. There are no limitations on the contributions made to the fund under the third tier. It includes all Provident Funds and all other Pension Funds outside the first two tiers. This tier is voluntary. 

The total mandatory contribution is 18.5%. Employers must remit 13.5% to SSNIT within 14 days after the end of a month. 2.5% of the 13.5% goes to the NHIA for the member's health insurance. Employers make payments through the SSNIT portal, approved mobile money platforms, authorized banks, and direct debit. 

Ghana Social Security Scheme Benefits

Depending on the contingency, members can enjoy four benefits under the Social Security Scheme. 

Superannuation Pension/ Old Age Pension

It is a financial benefit provided to contributors in their old age as part of the social security system. The SSNIT administers the benefit, serving as a form of retirement income for qualified individuals who contributed to the scheme during their working years.

For a full pension, the individual must be at least 60 years and make a minimum of 180 months aggregate contributions. Those eligible for a reduced pension must be between 55 and 60 years and make a minimum of 180 months aggregate contributions. 

Invalidity Pension

It is a financial benefit given to individuals who cannot work due to long-term illness or disability. The pension produces financial support to people who have unexpectedly become severely or permanently disabled and thus unable to engage in employment.

SSNIT conducts a medical assessment and evaluation to determine eligibility for this pension. In addition, the individual must be declared permanently incapable of gainful employment by a qualified and recognized medical officer. Eligible people must have contributed for 12 months in aggregate within 36 months before the incidence of invalidity. 

Survivors' Lump Sum

It is a benefit given to a deceased provider's surviving dependents or family members. The SSNIT administers the benefit as a one-time payment to provide financial support. The amount helps the dependents cope with losing a primary income earner.

The lump sum payment amount depends on the deceased contributor's dependents, age, and length of service. The SSNIT only pays when the contributor dies before retirement or a pensioner dies before age 75. In addition, compensation depends on how contributions were made before the contributor's death. 

Emigration Benefits

It allows contributors who permanently emigrate from Ghana to receive accumulated social security contributions. It is designed for individuals who no longer plan to work or reside in Ghana. Upon approval from the SSNIT, individuals receive the benefit as a lump sum. The amount depends on the contributor's total contributions and average monthly salary.    

Registration for Social Security Scheme

Employers must register with the SSNIT and have a social security number. SSNIT requires employers to provide a Certificate of Incorporation, Certificate to Commence Business, a list of employees with details such as social security numbers, valid ID, email addresses, basic salaries and tier 1 contributions, and primary place of business with a postal address. Employers can register on the SSNIT website and receive an employer registration number or ERN.   

Final Thoughts

Ghana's Social Security Scheme guarantees Ghanaians' long-term financial stability and well-being. Employees can enjoy the various benefits and ensure their financial future by understanding the social security scheme. Similarly, employers can remain compliant with legal requirements.

Ghanaian business owners may partner with Workpay to remunerate salaries and benefits while making the correct deductions for the social security scheme. We ensure compliance on top of timely and convenient payments for workers in Ghana. Reach out today to get started. 

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