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A. Social Security System Law

1. Coverage and exclusions

a. Who are covered

1) Compulsory

a) All employees (as defined by R.A. 11199)

Coverage in the SSS shall be compulsory upon all employees including kasambahays or domestic workers not over sixty (60) years of age and their employers:

Provided, That any benefit already earned by the employees under private benefit plans existing at the time of the approval of this Act shall not be discontinued, reduced or otherwise impaired:

Provided, further, That private plans which are existing and in force at the time of compulsory coverage shall be integrated with the plan of the SSS in such a way where the employers contribution to his private plan is more than that required of him in this Act, he shall pay to the SSS only the contribution required of him and he shall continue his contribution to such private plan less his contribution to the SSS so that the employer’s total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before the compulsory coverage:

Provided, further, That any changes, adjustments, modifications, eliminations or improvements in the benefits to be available under the remaining private plan, which may be necessary to adopt by reason of the reduced contributions thereto as a result of the integration, shall be subject to agreements between the employers and employees concerned:

Provided, further, That the private benefit plan which the employer shall continue for his employees shall remain under the employer‘s management and control unless there is an existing agreement to the contrary:

Provided, finally, That nothing in this Act shall be construed as a limitation on the right of employers and employees to agree on and adopt benefits which are over and above those provided under this Act. (Section 9[a], R.A. 11199, Social Security Act of 2018)

(1) Employee, defined

Employee – Any person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship: Provided, That a self-employed person shall be both employee and employer at the same time. (Section 8[d], Ibid.)

(2) Self-Employed

Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including, but not limited to the following:

1) All seif-employed professionals;

2) Partners and single proprietors of businesses;

3) Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term “employee” in Section 8(d) of this Act;

4) Professional athletes, coaches, trainers and jockeys; and

5) Individual farmers and fishermen.

Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons. (Section 9-A, Ibid.)

a) Self-employed as both employee and employer

A self-employed person shall be both employee and employer at the same time. (Section 8[c], Ibid.)

(3) Overseas Filipino Workers (OFWs)

Coverage in the SSS shall be compulsory upon all sea-based and land-based OFWs as defined under Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995. as amended by Republic Act No. 10022: Provided, That they are not over sixty (60) years of age. (Section 9-B[a], Ibid.)

All benefit provisions under this Act shall apply to all covered OFWs. The benefits include, among others, retirement, death, disability, funeral, sickness and maternity. (Paragraph 2, Section 9-B[a], Ibd.)

Land-based OFWs are compulsory members of the SSS and considered in the same manner as self-employed persons under such rules and regulations that the Commission shall prescribe. (Section 9-B[c], Ibid.)

2) Voluntary

a) Spouses (full-time in managing the household)

Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis. (Section 9[b], Ibid.)

b) OFWS after termination of employment overseas

(f) Upon the termination of their employment overseas, OFWs may continue to pay contributions on a voluntary basis to maintain their rights to full benefits. (Section 9[f], Ibid.)

c) Filipino permanent migrants

Filipino permanent migrants, including Filipino immigrants, permanent residents and naturalized citizens of their host countries may be covered by the SSS on a voluntary basis. (Section 9[g], Ibid.)

b. Who are excluded

1) Government

Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time. (Section 8[c], Ibid.)

c. Effective Date of Coverage

Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment: Provided, That the compulsory coverage of the self-employed person shall take effect upon his registration with the SSS. (Section 10, Ibid.)

d. Non-Transferability of Benefits

The SSS shall promptly pay the benefits provided in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act:

Provided, That the SSS shall pay the retirement benefits on the day of contingency to qualified members who have submitted the necessary documents at least six (6) months before:

Provided, further, That the beneficiary who is a national of a foreign country which does not extend benefits to a Filipino beneficiary residing in the Philippines, or which is not recognized by the Philippines, shall not be entitled to receive any benefit under this Act:

Provided, further, That notwithstanding the foregoing, where the best interest of the SSS will be served, the Commission may direct payments without regard to nationality or country of residence:

Provided, further, That if the recipient is a minor or a person incapable of administering his own affairs, the Commission shall appoint a representative under such terms and conditions as it may deem proper:

Provided, further, That such appointment shall not be necessary in case the recipient is under the custody of or living with the parents or spouse of the member in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient. Such benefits are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits:

Provided, further That in case of death benefits, if no beneficiary qualifies under this Act, said benefits shall be paid to the legal heirs in accordance with the law of succession. (Section 15, Ibid.)

2. Dependents and beneficiaries

a. Dependents

The dependents shall be the following:

1) The legal spouse entitled by law to receive support from the member;

2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally: and

3) The parent who is receiving regular support from the member. (Section 8[e], Ibid.)

1) Dependents’ Pension

Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (₱250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate and illegitimate children, the former shall be preferred. (Section 12-A, Ibid.)

b. Beneficiaries

1) Primary beneficiaries

The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member:

Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children:

Provided, further, That in the absence of the dependent legitimate, legitimated or legally adopted children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. (Section 8[k], Ibid.)

2) Secondary beneficiaries

In their absence, the dependent parents who shall be the secondary beneficiaries of the member.

In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. (Section 8[k], Ibid.)

3. Benefits

a. Sickness

The sickness benefit is a daily cash allowance paid for the number of days a member is unable to work due to sickness or injury. (pp. 58-59, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

A member is qualified to avail himself/herself of this benefit if:

1) He/she is unable to work due to sickness or injury and is confined either in a hospital or at home for at least four (4) days;

2) He/she has paid at least three (3) monthly contributions within the 12-month period immediately before the semester of sickness or injury;

3) He/she has used up all company sick leaves with pay for the current year; and

4) He/she has notified his/her employer. (Ibid.)

The amount of the member’s Sickness Benefit Allowance is equivalent to ninety percent (90%) of his/her average daily salary credit (ADSC). (Ibid.)

The Sickness Benefit is granted up to a maximum of 120 days in a calendar year. (Ibid.)

1) Sickness Benefit

A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average daily salary credit, subject to the following conditions:

(1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one (1) calendar year, nor shall any unused portion of the one hundred twenty (120) days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year;

(2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of the same confinement; and

(3) The employee member shall notify his employer of the fact of his sickness or injury within five (5) calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is not necessary: Provided, That if the member is unemployed or self-employed, he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification. (Section 14[a], R.A. 11199, Social Security Act of 2018)

a) When compensable confinement starts

The compensable confinement shall begin on the first day of sickness, and the payment of such allowances shall be promptly made by the employer every regular payday or on the fifteenth and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted. (Section 14[b], Ibid.)

One hundred percent (100%) of the daily benefits provided in the preceding paragraph shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the confinement within five (5) calendar days after receipt of the notification from the employee member: Provided, further, That if the notification to the SSS is made by the employer beyond five (5) calendar days after receipt of the notification from the employee member, said employer shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement. (Section 14[c], Ibid.)

b) When employer fails to provide notice to the SSS

Where the employee member has given the required notification but the employer fails to notify the SSS of the confinement or to file the claim for reimbursement within the period prescribed in this section resulting in the reduction of the benefit or denial of the claim, such employer shall have no right to recover the corresponding daily allowance he advanced to the employee member as required in this section. (Section 14[d], Ibid.)

b. Maternity

(See discussions under Maternity Leave.)

c. Disability

It is a cash benefit paid granted to a member who becomes permanently disabled, either partially or totally. A member who suffers partial or total permanent disability with at least one (1) contribution paid to the SSS prior to the semester of contingency is qualified to avail the benefit. (p. 59, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

Types of disability benefits:

1) Monthly pension is paid to a disabled member who has paid at least 36 monthly contributions to the SSS; or

2) Lump sum amount is granted to those with less than 36 monthly contributions. (Ibid.)

1) Permanent Disability Benefits

Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. (Section 13-A[a], R.A. 11199)

2) When pension is suspended

The monthly pension and dependents’ pension shall be suspended upon the reemployment or resumption of self-employment or the recovery of the disabled member from his permanent total disability or his failure to present himself for examination at least once a year upon notice by the SSS. (Section 13-A[b], R.A. 11199)

3) Upon death of pensioner

Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents’ pension. (Section 13-A[c], R.A. 11199)

4) When paid lump sum

(h) In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than twelve (12) months. (Section 13-A[h], R.A. 11199)

5) Adjudicating retirement, death, permanent total disability

For the purpose of adjudicating retirement, death and permanent total disability pension benefits, contributions shall be deemed paid for the months during which the member received partial disability pension: Provided, That such contributions shall be based on his last contribution prior to his disability. (Section 13-A[i], R.A. 11199)

Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death. (Section 13-A[j], R.A. 11199)

d. Retirement

It is a cash benefit granted to a member who can no longer work due to old age. (pp. 59-60, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

A member who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement is qualified to receive a monthly pension of lifetime cash benefit if:

1) He/she is at least 60 years old and separated from employment or ceased to ne self-employed/OFW/household worker (optional retirement).

2) He/she is at least 65 years old, whether employed/self-employed, working as OFW/household helper or not (technical retirement).

3) He/she is a surface or underground mineworker and is:

a) At least 55 years old (optional retirement) or at least 60 years old (technical retirement) whose date of actual retirement is not earlier than March 13, 1998 but not later than April 26, 2016 or at least 50 years old (optional retirement) or at least 60 years old (technical retirement) whose date of actual retirement is not earlier than April 27, 2016; and

b) He/she must have been working as surface or underground mineworker for at least five (5) years, either continuous or accumulated, prior to the semester of retirement.

(4) He/she is a racehorse jockey and is:

a) At least 55 years old (technical retirement) and whose date of actual retirement is not earlier than May 24, 2016;

b) He/she must have been employed and certified as racehorse jockey by his employer, who must be duly licensed by the Philippine Racing Commission (PHILRACOM)

c) He/she must have been working as a racehorse jockey for at least five (5) years, either continuous or accumulated, prior to the semester of retirement. (Ibid.)

1) If less than 120 contributions

If the member has less than 120 contributions, the member shall be entitled to a lump sum equivalent to the contributions paid by him/her or on his/her behalf. However, the member has the option to continue paying contributions to complete the 120 months to become eligible for monthly pension. (p. 60, Ibid.)

2) Retirement Benefits

A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS. (Section 12-B[a], R.A. 11199)

A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. (Section 12-B[b], Ibid.)

3) When pension is suspended

The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act. (Section 12-B[c], Ibid.)

4) Upon death of retired member

Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period, excluding the dependents’ pension. (Section 12-B[d], Ibid.)

5) Monthly pension

The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could; have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires. (Section 12-B[e] , Ibid.)

e. Death

It is a cash benefit granted to the beneficiaries of a deceased member. (pp. 60-61, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

The primary beneficiaries are the legitimate dependent spouse until he or she remarries and legitimate, legitimated, legally adopted or illegitimate dependent children of the member. In the absence of primary beneficiaries, the secondary beneficiaries are the dependent parents of the member. In their absence, the person designated by the member as beneficiary in his/her member’s record will be the recipient. (Ibid.)

For primary beneficiaries to be entitled to monthly pension, deceased member must have paid at least 36 monthly contributions prior to the semester of death. If with less than 36 monthly contributions prior to the semester of death, a lump sum amount is granted to the primary beneficiaries. (Ibid.)

Secondary/designated beneficiaries and legal heirs are entitled to lump sum benefit only regardless of the number of contributions paid by the member. (Ibid.)

1) Death Benefits

Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. (Section 13, R.A. 11199)

f. Funeral

It is a cash benefit given to whoever paid for the funeral expenses of the deceased member. (p. 61, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

To be qualified for the benefit, the employee-member must have been:

1) Reported for coverage by his/her employer; or

2) Subject to compulsory coverage but was not reported for covered by his/her employer. (Ibid.)

1) Funeral Benefit

A funeral grant equivalent to Twelve thousand pesos (₱12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree. (Section 13-B, R.A. 11199)

g. Unemployment / a.k.a. Involuntary Separation

It is a cash benefit granted to covered employees, including Kasambahay and OFWs who are involuntary separated from employment (e.g. due to retrenchment or downsizing, closure or cessation of operation, installation of labor-saving devices, redundancy, etc.) (p. 61, 2020 Handbook Workers’ Statutory Monetary Benefits, DOLE-BWC, 2020 edition)

1) Effect of Separation from Employment

When an employee under compulsory coverage is separated from employment, his employer’s contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit. (Section 11, R.A. 11199)

2) Effect of Interruption of Business or Professional Income

If the self-employed member realizes no income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section 22-A hereof. (Section 11-A, Ibid.)

3) Unemployment Insurance or Involuntary Separation Benefits

A member who is not over sixty (60) years of age who has paid at least thirty-six (36) months contributions twelve (12) months of which should be in the eighteen-month period immediately preceding the involuntary unemployment or separation shall be paid benefits in the form of monthly cash payments equivalent to fifty percent (50%) of the average monthly salary credit for a maximum of two (2) months: Provided, That an employee who is involuntarily unemployed can only claim unemployment benefits once every three (3) years: Provided, further, That in case of concurrence of two or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe. (Section 14-B, Ibid.)

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