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University of Santo Tomas Faculty of Civil Law Professor – 2C (2017-2018)Social Security System Law (Republic Act No. 1161, as amended)Q: What is the purpose of the SSS Law?A: to establish, develop, promote and perfect a sound and viable tax-exempt social security system suitable to the needs of the...

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Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

Social Security System Law (Republic Act No. 1161, as amended) Q: What is the purpose of the SSS Law? A: to establish, develop, promote and perfect a sound and viable tax-exempt social security system –suitable to the needs of the people throughout the Philippines –which shall promote social justice and –provide meaningful protection to members and their beneficiaries against the hazards of  disability,  sickness,  maternity,  old age,  death, and  other contingencies resulting in loss of income or financial burden.

A: Yes the definition of the term "employer" is, we think, sufficiently comprehensive as to include religious and charitable institutions or entities not organized for profit, like here in appellant, within its meaning. This is made more evident by the fact that it contains an exception in which said institutions or entities are not included. And, certainly, had the Legislature really intended to limit the operation of the law to entities organized for profit or gain, it would not have defined an "employer" in such a way as to include the Government and yet make an express exception of it. (In re Catholic Archbishop of Manila v. Social Security Commission, G.R. No. L15045, [January20,1961], 110 PHIL 616-622) 2. Employees All employees not over sixty (60) years of age

Towards this end, the State shall endeavor to extend social security protection to workers and their beneficiaries.

Employee -- Any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship

Its purpose is to provide social security, which means funds for the beneficiary, if the employee dies, or for the employee himself and his dependents if he is unable to perform his task because of illness or disability xxx (Tecson v. SSS, G.R. No. L-15798, [December 28, 1961], 113 PHIL 703-707)

Well-settled is the rule that the mandatory coverage of RA 1161, as amended, is premised on the existence of an employer-employee relationship. (Co v. People, G.R. No. 160265, [July 13, 2009], 610 PHIL 60-71)

Q: Who are compulsorily covered by the SSS? A: 1. Employers 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. Q: Are religious, charitable and non-profit institutions covered?

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3. Domestic helpers earning not less than One thousand pesos (P1,000.00) a month The minimum wage of domestic workers is now P1,500 to P2,500 pursuant to Section 24 of RA 10361 (Batas Kasambahay). Consequently, all domestic workers should be covered. Per RA 10361, a domestic worker who has rendered at least one (1) month of service shall be covered by the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits in accordance with the pertinent provisions provided by law. 4. Self Employed Persons Including, but not limited to the following: 1. All self-employed professionals; Page 1 of 14

Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

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 Sec. 8 4. (d) of this Act; 5. Professional athletes, coaches, trainers and jockeys; and 6. Individual farmers and fishermen. Q: Is this compulsory coverage and therefore, compulsory contribution, Constitutional? A: Yes. The Social Security Law is a legitimate exercise of the police power of the State. It affords protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the "promotion of social justice to insure the well-being and economic security of all the people.― (Roman Catholic Archbishop of Manila v. SSC; GR L-15045, January 20, 1961) Q: Can the parties still agree to a private benefit plan providing for greater benefits? A: Yes. 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) Q: Who may volunteer for coverage? A: 1. Spouses who devote full time to managing the household and family affairs; and 2. Filipinos recruited by foreign-based employers for employment abroad. Q: Who are excluded from the coverage of the law? A: 1. Purely casual employees; (see also Viernes case) Casual means occasional, coming without regularity. The work is purely casual when it is not a part of the business in which the employer is engaged. (Mansal v. P.P. Agrarian Law and Social Legislation Reviewer

Gocheco Lumber Co., G.R. No. L-8017, [April 30, 1955], 96 PHIL 941-946) In the case at bar the employment of respondent A to help in the repair or replacement of the eave of a commercial store owned by petitioner UC was purely casual because such work was needed only when the said structure was damaged or broken. When it would be broken and repaired nobody could foresee. Work on the eave could not be made at fixed intervals. The employment of a carpenter and a tinsmith for its repair or replacement was therefore only occasional, sporadic and for a short time. (Uy Chao v. Aguilar, G.R. No. L-9069, [March 28, 1958], 103 PHIL 219-223) 2. Employees on an alien vessel employed when such vessel is outside the Philippines; 3. Employees of the Philippine Government or instrumentality or agency thereof; 4. Employees of a foreign government or international organization, or their wholly- owned instrumentality; and 5. Temporary and other employees excluded by regulation of the Commission. Q: What are the effective dates of coverage of employers and employees? A: Section 10 of RA 1161 Employer = on the 1st day of operation. Employee = on the day of his employment. Self-employed = upon registration. Q: What are the obligations of an employer under the law? A: 1. Reporting of Covered Employees; Section 24(a). 2. Remittance of Contributions; Sections 18, 19, 19-A, and 22. Q: What is the employer required to report? A: Names, ages, civil status, occupations, salaries and dependents of all his employees who are subject to compulsory coverage Q: In case of a legitimate contracting arrangement, who has the obligation to report? Page 2 of 14

Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

A: Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors. (Section 8(j)) – Principal shall be subsidiarily liable for the civil liabilities of the contractor under the SSS Law. Q: What are the consequences of an employer’s failure to report? A: Effect of Failure to Report; Section 24(a) 1. DAMAGES if the employee subject to compulsory coverage 2. Dies; 3. Becomes sick or disabled; or 4. Reaches the age of sixty (60) Without the SSS having previously received any report or written communication about him from his employer. 1. The said employer shall pay to the SSS damages  equivalent to the benefits to which said employee member would have been entitled had his name been reported on time by the employer to the SSS In case of pension benefits, damages shall be equivalent to the accumulated pension due as of the date of settlement of the claim or the five (5) years' pension, whichever is higher, including dependents' pension. 2. The employer shall also be liable for the payment of the corresponding unremitted contributions and penalties thereon. 3. Section 28(e) -- where the violation consists in failure or refusal to register employees xxx the penalty shall be a FINE of not less than Five thousand pesos (P5,000) nor more than Twenty thousand pesos (P20,000) AND IMPRISONMENT for not less than six (6) years and one (1) day nor more than twelve (12) years. Q: When does the employer’s obligation to deduct and contribute begin? A: The last day of the calendar month when an employee's compulsory coverage takes effect. (Sections 18 and 19) Agrarian Law and Social Legislation Reviewer

Example: If employee begins work on June 20, deduction and contribution should be made by June 30. Q: What about the obligation to remit? A: The contribution imposed in the preceding section shall be remitted to the SSS within the first ten (10) days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. (Section 22) Example: June contributions should be remitted by July 10. Q: What are the consequences if the employer fails or refuses to remit? A: Employer shall be liable for: 1. Payment of the contributions. 2. Penalty of 3% per month from due date until paid. 3. Fine and imprisonment under Section 28(e). 4. Estafa under Article 315 of the RPC. Misappropriation is presumed if he deducts but does not remit within 30 days. Section 28(h). 5. If employer fails to remit prior to date of contingency, resulting in reduction of benefits, employer shall be liable to pay the SSS damages equivalent to the difference between the amount of benefit which the member should have received and the amount payable based on the contributions actually remitted. o except that in case of pension benefits, the employer shall be liable to pay the SSS damages equivalent to the accumulated pension due as of the date of settlement of the claim or the five (5) years' pension, whichever is higher, including dependents' pension o Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of the coverage.

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Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

Q: The United Christian Missionary Society is a religious organization. It believed that it is not covered by the SSS and therefore, did not remit any contribution to the System. It filed a petition for the condonation of penalties. Decide.

BENEFITS Q: What are the benefits given under the SSS Law? A:

A: Good faith or bad faith is rendered irrelevant, since the law makes no distinction between an employer who professes good reasons for delaying the remittance of premiums and another who deliberately disregards the legal duty imposed upon him to make such remittance. From the moment the remittance of premiums due is delayed, the penalty immediately attaches to the delayed premium payments by force of law. No discretion or alternative is granted respondent Commission in the enforcement of the law's mandate that the employer who fails to comply with his legal obligation to remit the premiums to the System within the prescribed period shall pay a penalty of three (3%) per month. Being a mere trustee of the funds of the System which actually belong to the members, respondent Commission cannot legally perform any acts affecting the same, including condonation of penalties, that would diminish the property rights of the owners and beneficiaries of such funds without an express or specific authority therefor. (United Christian Missionary Society, et al. v. Social Security Commission, et al. (G.R. No. L-26712-16, December 27, 1969) Q: What is the effect of separation of employee on the obligation to contribute and remit? A: 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,  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) Any contribution paid in advance by the employer but not due shall be credited or refunded to his employer. (Section 22)

Agrarian Law and Social Legislation Reviewer

1. 2. 3. 4. 5. 6. 7.

Sickness Benefits; Section 14 Maternity Benefits; Section 14-A. Permanent Disability Benefits; Section 13-A Retirement Benefits; Section 12-B. Death Benefits; Section 13. Funeral Benefits; Section 13-B Member loans; Section 26(e).

Sickness Benefit It is a DAILY ALLOWANCE for each day of compensable confinement or fraction thereof Remember, purpose of SSS is to provide meaningful protection against contingencies resulting in loss of income or financial burden. Equivalent to 90% of the employee‘s average daily salary credit Average daily salary credit — The result obtained by dividing the sum of the six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty (180). ―The six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency‖ Semester — A period of 2 consecutive quarters ending in the quarter of contingency. Quarter — A period of 3 consecutive calendar months ending on the last day of March, June, September and December. Q: What are the conditions for entitlement to the sickness benefit? A: 1. The member has paid at least 3 monthly contributions in the twelve-month period immediately preceding the semester of sickness. Page 4 of 14

Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

2. The member was confined for more than 3 days (whether in a hospital or elsewhere with the SSC‘s approval). 3. The member has exhausted his company granted sick leaves with pay, if any. 4. 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  notification to the employer is not necessary where - confinement is in a hospital; or  the employee became sick or was injured while working or within the premises of the employer SECTION 11. Effect of Separation from Employment. — When an employee under compulsory coverage is separated from employment xxxsaid 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. Q: What happens 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? A: 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)) Period to File Claim

Elsewhere: 1 year from start of confinement. – 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. Q: How long is the benefit payable? A: The compensable confinement shall begin on the first day of sickness (assuming notification was given on time if required) – 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.  120 days max. per year; no carry over  240 days max. per confinement Q: When payments should be made? A: 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. Maternity Benefits DAILY ALLOWANCE given to an employee who gives birth or suffers a miscarriage. It is equivalent to 100% of the employee‘s average daily salary credit. Benefits: • Normal, miscarriage = 60 days • Caesarean = 78 days Q: What are the conditions for entitlement to the maternity benefit? A:

Hospital confinement: 1 year from last day of confinement.

1. The female member has given birth or suffers a miscarriage and such is not yet in excess of four deliveries or miscarriages;

Agrarian Law and Social Legislation Reviewer

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Social Security Law Reviewer

Atty. Cesar Santamaria

University of Santo Tomas Faculty of Civil Law

Professor – 2C (2017-2018)

2. The female member has paid at least 3 monthly contributions within the 12 month period immediately preceding the semester of childbirth or miscarriage. – Same as sickness benefit.

– Remember: Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of the coverage. (Section 22(b)) Disability Benefits

Example: Delivery: December 2014 The semester of contingency would be JulyDecember 2014 The twelve (12)-month period before the semester of contingency would be July 2013 to June 2014 Assume that the six (6) highest monthly salary credits during this period are P15,000 each. The average daily allowance would be P500.00 • The daily maternity allowance would be P500.00 • The total maternity benefit due would be P30,000 for normal delivery or P39,000 for caesarian cases. Q: What is the procedure for availment of the maternity leave benefit? A: 1. The employee notifies the employer of her pregnancy and the probable date of her delivery 2. The employer transmits the notice to the SSS 3. The employer advances the payment of the benefit within 30 days from the filing of the maternity leave application; and 4. The SSS shall reimburse the employer upon satisfactory proof of such payment and legality thereof. Q: What is the effect on the member’s entitlement to the maternity benefit in case she should give birth or suffer miscarriage  without the required contributions having been remitted for her by her employer to the SSS, or  without the SSS having been previously notified by the employer of the time of the pregnancy? A: The employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

Agrarian Law and Social Legislation Reviewer

Q: What are the two types of permanent disability benefits? A: 1. Permanent TOTAL disability benefits 2. Permanent PARTIAL disability benefits Q: What disabilities are deemed PERMANENT TOTAL? A: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS. Q: What are the PT disability benefits? A: If member has paid AT LEAST 36...