SSS Law-Reviewer Pension PDF

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THE PHILIPPINE SOCIAL SECURITY LAWLegal Basis : R. 1161, R. 8282, R. 11199 or the “Social Security Act of 2018”RATIONALE BEHIND THE ENACTMENT OF THE SOCIAL SECURITY LAWSection 2. Declaration of Policy. - It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-...

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THE PHILIPPINE SOCIAL SECURITY LAW Legal Basis: R.A. 1161, R.A. 8282, R.A. 11199 or the “Social Security Act of 2018” RATIONALE BEHIND THE ENACTMENT OF THE SOCIAL SECURITY LAW Section 2. Declaration of Policy. - It is the policy of the State 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 through savings, and ensure meaningful social security 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. Towards this end, the State shall endeavor to extend social security protection to Filipino workers, local or overseas, and their beneficiaries. In the pursuit of this policy, a social security program shall be developed emphasizing the value of "work, save, invest and prosper". The maximum profitability of investible funds and resources of the program shall be ensured through a culture of excellence in management grounded upon sound and efficient policies employing internationally recognized best practices.

by the law pursuant to the policy of the State to provide social security to the workingman. The benefits are specifically declared not transferable and exempt from tax, legal processes and liens. (SSS vs. Davac, et. al., G.R. No.21642, July 30, 1966) EXCEPTION: The estate may basically become the “beneficiary” when: o The beneficiary is the estate itself; o No beneficiary was expressly designated; or o If the designation of the beneficiary is void. - Tax exempt. Its purpose is not for raising revenues. (Cons Estate vs. SSS) - The funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the hazards provided by the law occur. - Funds herein are private funds which belongs to the members and are merely held in trust by the government. (Roman Catholic Archbishop of Manila vs. SSC)

VALIDITY OF THE SOCIAL SECURITY LAW The enactment of the Social Security Law is a legitimate exercise of police power. It 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 vs. SSC) IMPORTANT PRINCIPLES TO REMEMBER - Construed liberally in favor of those seeking its benefits. (Franklin Baker Co. vs. SSS) - Not a law of succession. It is not the heirs of the employee but the DESIGNATED BENEFICIARIES who are to receive the social security benefits. (Tecson vs. SSS, 3 SCRA 735) - Not part of the estate of a member. Benefits receivable under the SSS Law are in the nature of a special privilege or an arrangement secured

WHO ARE CONSIDERED AS EMPLOYERS AND EMPLOYEES UNDER SEC. 8, R.A. 11199 EMPLOYER

EMPLOYEE

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.

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.

Except: Government and any of its political subdivisions, branches or instrumentalities,

OBLIGATION TO PAY PREMIUMS/CONTRIBUTIONS - Employee - Employer Provided, That a - Self-employed self-employed person shall be both employee Note: Under Sec. 24e of RA 11191, the law requires the and employer at presentation of the Social Security Number of a person as a condition for employment. This social security the same time. number will become yoursto keep and once you become a member of the SSS, you will always be a member for life.

including corporations owned or controlled by the Government; Provided, That a self-employed person shall be both employee and employer at the same time.

COVERAGE Sec. 9, RA 11199

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 vs. People, 2009) CONTINGENCIES (when the right to avail of the benefits under the law arises) - Disability - Sickness/Injury - Maternity - Retirement - Death - Other contingencies resulting in loss of income or financial burden. (Sec. 2) SOCIAL SECURITY SYSTEM VS. EMPLOYEES COMPENSATION PROGRAM SSS

ECC

Contingencies may not be workrelated.

Contingencies must be work-related.

(a) 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. (underscoring supplied) WHO ARE COVERED UNDER SEC. 9, RA 11199 Covered

Type of coverage

ALL EMPLOYEES including kasambahays or domestic workers who are NOT over 60 years old; and

Exception

Compulsory

FULL TIME managing household family affairs 9(b)]

to the and [Sec.

Compulsory

Such as, but not limited to: (a) All self employed professionals; (b) Partners and single proprietors of businesses;

Their employers. [Sec. 9(a)] SPOUSES who devote

SELF-EMPLOYED PERSONS (Sec. 9-A)

Voluntary

Engaged in

other vocation or employme nt which is subject to mandatory coverage

(c) 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; (d) Professional athletes, coaches, trainers and jockeys; and (e) Individual farmers and fishermen. OVERSEAS FILIPINO WORKERS (OFW), whether sea-based or land-based, who are NOT over 60 years old.

Compulsory

Covered OFWs shall enjoy all the benefits under the law. Note: Under the old law, OFWs are not compulsorily covered.

CIVIL LIABILITY; SOLIDARY LIABILITY OF MANNING AGENCIES OF SEA-BASED OFW

separation. However, the member employee shall be credited with all the contributions paid on his behalf and remain entitled to the benefits and privileges available, As to sea-based OFWs, their manning agencies are as long as the member employee meet the necessary deemed agents of their principals and are considered, in qualifying conditions set forth by the SSS. the eyes of the law, as their employers. These manning agencies are jointly and severally liable with their This time, the member may opt to continue paying the principals with respect to civil liabilities incurred for any total contributions as a voluntary member to maintain violation of RA 11199. (Sec.9-B) his right to full benefits. CRIMINAL LIABILITY OF MANNING AGENCIES OF SEA BASED OFW

What happens if the member is re-employed with the private sector? The member can stop paying as a voluntary member The persons having direct control, management or and resume payment of contributions as an employee direction of the manning agencies shall be held of his new employer. criminally liable for any act or omission penalized under this Act notwithstanding Section 28(f) hereof. What if the member is re-employed with the government (where he will be covered by another (Sec.9-B) system: GSIS)? The member is given an option to continue paying LAND-BASED OFW Treated in the same manner as “self-employed persons”. contributions to the SSS as a voluntary member so that Exception: Bilateral social security and labor agreements he may enjoy social security benefits under BOTH by the Philippine government with their host countries systems. ensuring payment of SSS contributions. EFFECT OF TERMINATION OF EMPLOYMENT OVERSEAS The OFWs may opt to continue to pay contributions on a voluntary basis to maintain their rights to full benefits under SSS law. EFFECTIVE DATE OF COVERAGE When will the compulsory coverage start? (Sec. 10) EMPLOYER

First day of operation

EMPLOYEE

First day of work

SELF-EMPLOYED

Upon registration with SSS

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. (Sec. 11) Note: After separation from employment, the employer’s obligation to pay their share in the SSS contribution ceases at the end of the month of

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. (Sec. 11-A) Note: Should the member misrepresent as to declaration of no income, he may incur criminal liability. DEPENDENTS 1. Legal spouse entitled by law to receive support from the member; 2. 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. Parent who is receiving regular support from the member. BENEFICIARIES PRIMARY BENEFICIARIES

1. Dependent spouse until he or she remarries; 2. Dependent legitimate, legitimated or legally adopted, and illegitimate children;

the employer. Employer will report to the SSS and pay you your benefit. The employer will just be reimbursed by the SSS. Notice must be given within 5 calendar days after the start of confinement.

Note: The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, RETIREMENT BENEFITS (Sec. 12-B) legitimated or legally adopted children. However, in the absence of the dependent legitimate or legitimated children of the member, his/her dependent illegitimate Retirement benefit is a cash benefit either monthly children shall be entitled to 100% of the benefits. pension or lump sum period paid to a member who can no longer work due to old age. SECONDARY BENEFICIARIES Two Types of Retirement Benefits 1. Dependent parent, in the absence of the primary beneficiaries; Monthly Pension Lump Sum 2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all the foregoing primary beneficiaries and dependent parents. BENEFITS They are not transferable. When the person entitled to receive them is unavailable to receive his/her benefits, he/she cannot delegate another person to receive them in his/her place. Another person can only be authorized to receive the benefits if the person entitled is physically incapacitated. SOCIAL SECURITY BENEFITS 1. Sickness 2. Maternity Leave 3. Retirement 4. Unemployment Insurance or Involuntary Separation 5. Disability 6. Death 7. Funeral

SICKNESS BENEFIT (Sec.14) 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.

Eligibility 1. Member has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of sickness or injury; 2. Confined for more than 3 days in the hospital or elsewhere with the approval of the SSS; 3. Notice of the fact or sickness of the employee to

Lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions prior to the semester of retirement.

Granted to those who has not paid the required 120 monthly contributions. This is equal to the total contributions paid by the employer including interest.

Provided, that he shall have the option to receive his first 18 monthly pensions in lump sum discounted at preferential rate of interest to be determined by SSS. NOTE: A covered member who is 60 years old at retirement and who does not qualify above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf. Provided, he is: 1. Separated from employment; and 2. Not continuing payment of contributions on his own.

Retirement of Underground Mineworkers Entitled to retirement benefits if he has: 1. Reached the age of 60 yrs old whether employed or not 2. Reached 55 yrs old and is an underground mineworker for at least 5 yrs a. continuous or accumulated, and b. has paid at least 120 monthly contributions

Q: What happens if a retired member dies? Primary beneficiaries shall be entitled to receive monthly pensions.

UNEMPLOYMENT INSURANCE OR INVOLUNTARY SEPARATION (Sec. 14-B) A member, who is not over 60 years old who has paid at least 36 monthly contributions, 12 months of should be in the 18-month period If he has no primary beneficiaries and he dies within which preceding the involuntary 60 months from the start of monthly pension, his immediately unemployment or separation, shall be paid: secondary beneficiaries shall be entitled to a lump sum benefit equivalent of the total monthly pensions corresponding to the balance of the 5-year Monthly cash payments equivalent to 50% of the guaranteed period. Excluding the dependents average monthly salary credit for a maximum of 2 pension. months, provided that; 1. He can only claim benefits once every 3 years, MONTHLY PENSION (Sec. 12) and 2. In case of concurrence of two or more Amount of Monthly Pension compensable contingencies, only the highest 1. The sum of P300 plus twenty percent (20%) of benefit shall be paid. the average monthly salary credit (AMSC) plus two percent (2%) of the AMSC for each credited year of service (CYS) in excess of ten DISABILITY BENEFITS (10) years; or 2. Forty percent (40%) of the AMSC; or Permanent Total Disability (Sec. 13-A) 3. P1,000 if the member had less than ten (10) A member who has paid at least 36 monthly CYS; P1,200 if with at least ten (10) CYS; or contributions prior to the semester of disability shall P2,400 if with at least twenty (20) CYS. be entitled to monthly pension. Provided: 1. If he has not paid the required contributions,

Note: Average monthly salary credit – the result obtained by dividing the sum of the last 60 monthly salary credits immediately preceding the semester of contingency by 60, or the result obtained by dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period, whichever is greater.

he

shall be entitled to: ▪ Lump sum benefit equivalent to monthly pension times the number of monthly contributions

paid to the SSS; or 12 times the monthly pension, whichever is higher.

Additional Monthly Benefit Allowance

If a person decides to reemploy, he shall again be Additional P1000 shall be given to all retirement, subject to compulsory coverage and shall be death, and disability pensioners receiving monthly considered a new member. pensions in or after January 2017. What if the pensioner with permanent total disability dies? Dependents’ Pension (Sec. 12-A) In the event that the pensioner had died, had Primary beneficiaries shall be entitled to receive the permanent total disability or had retired, the monthly pension. Provided; If he has no primary dependents shall be paid 10% of the monthly beneficiaries, if he has no primary beneficiaries and he dies within 60 months from the start of monthly pension or P250, whichever is higher. pension, his secondary benefits shall be entitled to a This shall be paid for each dependent child born on lump sum benefit equivalent of the total monthly or before the contingency but not exceeding 5, pensions corresponding to the balance of the 5- year beginning with the youngest and without guaranteed period excluding the dependents pension. substitution. Legitimate children are preferred.

What disabilities are deemed permanent total? 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 deemed and approved by SSS. Permanent Partial Disability (Sec. 13-A) Before 36 Monthly Contributions

Percentage of the lump sum benefit.

After 36 Monthly Contributions

Monthly pension for permanent total disability payable not longer than the period designated by law.

If a person who is on partial disability retire or dies, his disability pension shall cease upon his retirement or death.

Amount of Benefits The monthly pension depends on the member’s paid contributions including the credited years of service and the number of dependent minor children but not to exceed 5. Note: If a deceased member is survived by less than 5 minor legitimate, legitimated, or legally adopted children, the illegitimate minor children will be entitled to 50% of the share of legitimate, legitimated, or legally adopted children in the basic pension and 100% of the dependents’ pension. If there are no legitimate, legitimated, or legally adopted children, the illegitimate children shall be entitled to 100% of the basic pension. The entitlement to benefits as a primary beneficiary requires not only legitimacy but also dependence upon the member

FUNERAL BENEFIT (Sec. 13-B) Amount: Funeral grant is equivalent to P12,000 paid in cash or kind.

Qualification of Spouse-Beneficiary DEATH BENEFITS (Sec. 13) Death Benefit is a cash benefit either in monthly pension or lump sum paid to the beneficiaries of a deceased member.

Types of Death Benefits Monthly Pension Granted only to the primary beneficiaries of a deceased member who had paid 36 monthly contributions before the semester of death.

Lump Sum Granted to primary beneficiaries of a deceased member who had paid less than 36 m...