Republic Act No. 1161 June 18, 1954
AN ACT TO CREATE A SOCIAL SECURITY SYSTEM PROVIDING SICKNESS, UNEMPLOYMENT, RETIREMENT, DISABILITY AND DEATH BENEFITS FOR EMPLOYEES
SECTION 1. Short Title. — This Act shall be known as the "Social Security Law" (As amended by Sec. 1, P.D. No. 24, S-1972)."
Section 2. Declaration of Policy. — It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines which shall provide to covered employees and their families protection against the hazards of disability, sickness, old age and death, with a view to promoting their well-being in the spirit of social justice. (As amended by Sec. 1, R.A. 1792 and Sec. 2, P.D. No. 24, S-1972)
A. Administration
SECTION 3. Social Security System. — (a) To carry out the purposes of this Act, the Social Security System with principal place of business in Metro Manila, Philippines is hereby created. The SSS shall be directed and controlled by a Social Security Commission composed of the Secretary of Labor and Employment, the SSS Administrator and seven appointive members: three of whom shall represent the labor group, one of whom shall be a woman; three, the management group, one of whom shall be a woman; and, one, the general public, to be appointed by the President of the Philippines. The Chairman of the Commission shall be designated by the President from among its members. The term of the appointive members shall be three years: Provided, That the terms of the first six appointive members shall be one, two and three years for every two members, respectively.
All vacancies, except through the expiration of the term, shall be filled for the unexpired term only. The apppointive members of the Commission shall receive one thousand five hundred pesos per diem for each meeting actually attended by them: Provided, That no compensation shall be paid for more than eight meetings a month. Members of the Commission who hear cases pending before the Commission, shall also receive a per diem of one thousand five hundred pesos. (As amended by Sec. 2, R.A. 1792, Sec. 1, R.A. 2658, Sec. 1, R.A. 4857; Sec. 3, P.D. No. 24, S-1972; Sec. 1, P.D. No. 347, S-1973; Sec. 1, P.D. 735, S-1975; Sec. 1, P.D. No. 1202, S-1977; Sec. 1, E.O. No. 102, S-1986; and R.A. 7688)
(b) The general conduct of the operations and management functions of the SSS shall be vested in the Administrator who shall serve as the chief executive officer immediately responsible for carrying out the program of the SSS and the policies of the Commission. The administrator shall be a person who has had previous experience in technical and administrative fields related to the purposes of this Act. He shall be appointed by the President of the Philippines and shall receive a salary to be fixed by the Commission with the approval of the President, payable from the funds of the SSS. (As amended by Sec. 1, R.A. 2658; Sec. 3, P.D. No. 24, S-1972; and Sec. 1, P.D. No. 735, S- 1975)
(c) The Commission, upon the recommendation of the Administrator shall appoint an actuary, and such other personnel as may be deemed necessary; fix their compensation; prescribe their duties and establish such methods and procedures as may insure the efficient, honest and economical administration of the provisions and purposes of this Act. Provided, however, That the personnel of the SSS shall be selected only from civil service eligibles certified by the commissioner of civil service and be subject to civil service rules and regulations. (As amended by Sec. 1, R.A. 2658 and Sec. 1, P.D. No. 735, S-1975)
Section 4. Powers and Duties of the Commission. — For the attainment of its main objectives as set forth in section two hereof, the Commission shall have the following powers and duties:
(a) To adopt, amend and rescind, subject to the approval of the President, such rules and regulations as may be necessary to carry out the provisions and purposes of this Act.
(b) To submit annually not later than March 31, a public report to the President of the Philippines covering its activities in the administration and enforcement of this Act during the preceding year including information and recommendations on broad policies for the development and perfection of the program of the SSS. (As amended by Sec. 2, P.D. No. 735, S-1975)
(c) To require the Actuary to submit a valuation report on the SSS benefit program every five years, or more frequently as may be necessary, and to undertake the necessary actuarial studies and calculations concerning increases in benefits and the financial stability of the SSS and to provide for the feasible increases in benefits and the addition of new ones under such rules and regulations as the Commission may adopt subject to the approval of the President: President, That the actuarial soundness of the reserve fund shall be guaranteed: Provided, further, That such increases in benefits shall not require any increase in the rate of contribution. (As amended by Sec. 1, P.D. No. 1636, S-1979 and Sec. 2, E.O. No. 102, S-1986)
(d) To establish branches of the System whenever and wherever it may be expedient or necessary, and to inspect or cause to be inspected periodically such branches.
(e) To enter into agreements or contracts for such service and aid, as may be needed for the proper, efficient and stable administration of the System.
(f) To adopt from time to time a budget of expenditures including salaries of personnel, against all funds available to the System under this Act. (As amended by Sec. 3, R.A. 1792)
(g) To set up its accounting system and provide the necessary personnel therefor. (As amended by Sec. 3, R.A. 1792)
(h) To require reports, compilations and analyses of statistical and economic data and to make investigations as may be needed for the proper administration and development of the System.
(i) To acquire property, real or personal, which may be necessary or expedient for the attainment of the purposes of this Act.
(j) To acquire, receive, or hold, by way of purchase, expropriation or otherwise, public or private property for the purpose of undertaking housing projects preferably for the benefit of low-salaried employees and for the maintenance of hospitals and institutions for the sick, aged and infirm employees and immediate members of their families. (As amended by Sec. 2, R.A. 2658 and Sec. 2., P.D. No. 735, S-1975)
(k) To sue and be sued in court.
(l) To perform such other acts as it may deem appropriate for the proper enforcement of this Act.
Section 5. Settlement of Disputes. — (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within twenty days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission. (As amended by Sec. 3, R.A. 2658; Sec. 2, R.A. 4857; and Sec. 3, P.D. No. 735, S-1975)
(b) Appeal to Courts. — Any decision of the Commission, in the absence of an appeal therefrom as herein provided, shall become final fifteen days after the date of notification, and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission. The Commission shall be deemed to be a party to any judicial action involving any such decision, and may be represented by an attorney employed by the Commission, or when requested by the Commission, by the Solicitor General or any fiscal.
(c) Court Review. — The decision of the Commission upon any disputed matter may be received both upon the law and the facts by the Court of Appeals. For the purpose of such review the procedure concerning appeals from the Court of First Instance shall be followed as far as practicable and consistent with the purposes of this Act. Appeal from a decision of the Commission must be taken within fifteen days from notification of such decision. If the decision of the Commission involves only questions of law, the same shall be reviewed by the Supreme Court. No appeal bond shall be required. The case shall be heard in a summary manner, and shall take precedence over all cases, except that in the Supreme Court, criminal cases wherein life imprisonment or death has been imposed by the trial court shall take precedence. No appeal shall act as a supersedeas or a stay of the order of the Commission, unless the Commission itself, or the Court of Appeals or the Supreme Court, shall so order.
(d) Execution of decisions — Any decision or award of the Commission after the same has become final and executory shall be enforced and executed in the same manner as decisions of Courts of First Instance and the Commission shall have the power to issue to the City or provincial sheriff or the sheriff whom it may appoint such writs of execution as may be necessary for the enforcement of such decision or award and any person who shall fail or refuse to comply with such decision, award, or writ, after being required to do so shall, upon application by the Commission, be punished by the proper court for contempt. (As amended by Sec. 4, P.D. No. 24, S-1972)
Section 6. Auditor and Counsel. — (a) The Commissioner on Auditor shall be the ex-officio Auditor of the SSS. He or his representative shall check and audit all the accounts, funds and properties of the SSS in the same manner and as frequently as the accounts, funds and properties of the government are checked and audited under existing laws; and he shall have, as far as practicable, the same powers and duties as he has with respect to the checking and auditing of public accounts, funds and properties in general.
(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He or his representative shall act as legal adviser and counsel thereof. (As amended by Sec. 4, P.D. No. 735, S-1975)
Section 7. Oaths, Witnesses, and Production of Records. — When authorized by the Commission, an official or employee thereof shall have the power to administer oath and affirmation, take depositions, certify to official acts, and issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books, papers, correspondence and other records deemed necessary as evidence in connection with any question arising under this Act. Any case of contumacy shall be dealt with in accordance with the provisions of section five hundred eighty of the Administrative Code.
B. Definitions
SECTION 8. Terms Defined. — For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings:
(a) SSS — The Social Security System created by this Act. (As amended by Sec. 2, P.D. No. 1636, S-1979)
(b) Commission — The Social Security Commission as herein created.
(c) Employer — 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 professional shall be both employee and employer at the same time. (As amended by Sec. 2, P.D. No. 1636, S-1979)
(d) 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: Provided, That a self-employed professional shall be both employee and employer at the same time. (As amended by Sec. 4, R.A. 2658 and Sec. 2, P.D. No. 1636, S-1979)
(e) Dependent — The legitimate, legitimated or legally adopted child who is unmarried, not gainfully employed, and not over twenty-one years of age, or over twenty-one years of age, provided that he is congenitally incapacitated and incapable of self-support, physically or mentally; the legitimate spouse dependent for support upon the employee; and the legitimate parents wholly dependent upon the covered employee for regular support. (As amended by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; and Sec. 5, P.D. No. 735, S-1975)
(f) Compensation — All actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration in excess of three thousand pesos received during the month. (As amended by Sec. 4, R.A. 1792; Sec. 4 R.A. 2658; Sec. 5, P.D. No. 24, S-1972; and Sec. 3, E.O. No. 102, S-1986)
(g) Monthly salary credit — The compensation base for contributions and benefits as indicated in the schedule in section eighteen of this Act. (As amended by Sec. 4, R.A. 2658 and Sec. 5 P.D. No. 24, S-1972)
(h) Monthly — The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis, "monthly" shall mean a period of one month.
(i) Contribution — The amount paid to the SSS by the employee and by his employer in accordance with section eighteen of this Act. (As amended by Sec. 5, P.D. No. 24, S-1972)
(j) Employment. — Any service performed by an employee for his employer, except —
1. Agricultural labor when performed by a share or leasehold tenant or worker who is not paid any regular daily wage or base pay and who does not work for an uninterrupted period of at least six months in a year; (As amended by Sec. 4, R.A. 2658)
2. Domestic service in a private home;
3. Employment purely casual and not for the purposes of occupation or business of the employer;
4. Service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of twenty-one years in the employ of his parents;
5. Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines;
6. Service performed in the employ of the Philippine Government or an instrumentality or agency thereof;
7. Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality: Provided, however, That his exemption notwithstanding, any foreign government, international organization, or their wholly-owned instrumentality employing workers in the Philippines or employing Filipinos outside of the Philippines may enter into an agreement with the Philippine Government for the inclusion of such employees in the SSS except those already covered by their respective civil service retirement systems: Provided, further, That the terms of such agreement shall conform with the provisions of this Act on coverage and amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement. (As amended by Sec. 1, R.A. 3839; Sec. 3, RA 4857; and Sec. 5, P.D. No. 735, S-1975)
8. Such other services performed by temporary employees who may be excluded by regulation of the Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors. (As amended by Sec. 5, P.D. No. 735, S-1975)
(k) Beneficiaries — The dependent spouse until he remarries and dependent children, who shall be the primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on dependent children, the legitimate descendents and illegitimate children who shall be the secondary beneficiaries. In the absence of any of the foregoing, any other person designated by the covered employee as secondary beneficiary. (As amended by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; Sec. 1, P.D. No. 177, S-1973; and Sec. 5, P.D. No. 735, S-1975)
(l) Contingency — The retirement, death, permanent disability, injury or sickness of the covered employee. (As amended by Sec. 5, P.D. No. 735, S-1975)
(m) Average monthly salary credit — The result obtained by dividing the sum of the monthly salary credits in the sixty-month period immediately preceding the semester of contingency by the number of months of coverage in the same period, 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 calendar months of coverage in the same period, whichever is greater: except where the month of contingency falls within eighteen months from the month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits paid prior to the month of contingency by the total number of calendar months of coverage in the same period: Provided, That the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit. (As amended by Sec. 3, R.A. 4857 and Sec. 5, P.D. No. 735, S-1975)
(n) Average daily salary credit — The result obtained by dividing the sum of the six highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty. (As amended by Sec. 3, R.A. 4857; Sec. 5, P.D. No. 735, S-1975; and Sec. 3, E.O. No. 102, S-1986)
(o) Semester — A period of two consecutive quarters ending in the quarter of contingency. (As amended by Sec. 5, P.D. No. 735, S-1975)
(p) Quarter — A period of three consecutive calendar months ending on the last day of March, June, September and December. (As amended by Sec. 3, R.A. 4857)
(q) Replacement ratio — The sum of twenty per cent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average monthly salary credit. (As amended by Sec. 2, P.D. No. 1636, S-1979)
(r) Credited years of service — For a member covered prior to January 1975, nineteen hundred seventy five minus the calendar year of coverage plus the number of calendar years in which six or more contributions have been paid from January 1975 up to the calendar year containing the semester prior to the contingency. For a member covered in or after January 1975, the number of calendar years in which six or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency. (As amended by Sec. 2, P.D. No. 1636, S-1979)
C. Scope of the System
SECTION 9. Compulsory coverage. — (a) Coverage in the SSS shall be compulsory upon all employees not over sixty years of age and their employers: Provided, That any benefit already earned by 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 employer's contribution to his private plan is more that 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 private benefit plan and to the Social Security System 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 contribution 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. (As amended by Sec. 5, R.A. 1972; Sec. 5, R.A. 2658; and Sec. 2, R.A. 3839)
(b) Filipinos recruited in the Philippines by foreign-based employers for employment abroad may be covered by the SSS on a voluntary basis. (As amended by Sec. 2, P.D. No. 177, S-1973 and Sec. 6, P.D. No. 735, S-1975)
Section 9-A. Compulsory Coverage of the Self-employed. — Coverage in the SSS shall also be compulsory upon all self-employed persons earning P1,800 or more per annum: Provided, That the effectivity of coverage of certain groups of self-employed shall be determined by the Commission under such rules and regulations it may prescribe: Provided, further, That the effectivity of the coverage of the following self-employed persons shall be in accordance with section ten (b) hereof:
1. All self-employed professionals licensed by the Professional Regulations Commission or those licensed to practice law.
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 eight (d) of this Act.
4. Professionals athletes, coaches, trainers licensed by the Games and Amusement Board as well as jockeys and trainers licensed by the Philippine Racing Commission.
Unless otherwise specified herein, all provisions of the SSS Law applicable to covered employees shall also be applicable to the covered self-employed persons. (As amended by Sec. 3, P.D. No. 1636, S-1979)
Section 10. 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 self-employed persons referred to in paragraphs (1) to (4) shall take effect on the first day of January following the calendar year they started the practice of their profession or business operations but in no case earlier than January 1, 1980. (As amended by Sec. 6, R.A. 1972; Sec. 6, R.A. 2658; and Sec. 4, P.D. No. 1636, S-1979)
Section 11. 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. (As amended by Sec. 4, R.A. 4857 and Sec. 7, P.D. No. 735, S-1975)
Section 11-A. Effect of Interruption of Business or Professional Income. — If the self-employed realizes no net professional or business income in any calendar year, he shall not be required to pay contributions for the succeeding year. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to separated covered employees. (As amended by Sec. 5, P.D. No. 1636, S-1979)
D. Benefits
SECTION 12. Monthly Pension. — (a) The monthly pension shall be the sum of the following:
The average monthly salary credit multiplied by the replacement ratio; and
One and a half per cent of the average monthly salary credit for each credited year of service in excess of ten years.
(b) The monthly pension shall in no case be less than two hundred pesos nor paid in an aggregate amount of less than sixty times the monthly pension except to a secondary beneficiary: Provided, That the monthly pension of surviving pensioners as of December 31, 1986 shall be increased by twenty per cent. (As amended by Sec. 7, R.A. 1792; Sec. 7, R.A. 2658; Sec. 5, R.A. 4857; Sec. 6, P.D. No. 24, S-1972; Sec. 3, P.D. No. 177, S-1973; Sec. 8, P.D. No. 735, S-1975; Sec. 2, P.D. No. 1202, S-1977; Sec. 6, P.D. No. 1636, S-1979; Sec. 1, E.O. No. 28, S-1986; and Sec. 4, E.O. No. 102, S-1986)
Section 12-A. Dependents' Pension. — The dependents' pension shall be equivalent to ten per cent of the monthly pension for each dependent child but not exceeding five, beginning with the youngest and without substitution. (As amended by Sec. 3, P.D. No. 1202, S-1977)
Section 12-B. Retirement Benefits. — (a) A covered employee who has paid at least one hundred twenty monthly contributions prior to the semester of retirement; and who (1) has reached the age of sixty years and is not receiving monthly compensation of at least three hundred pesos or (2) has reached the age of sixty-five years, shall be entitled for as long as he lives to the monthly pension: Provided, That his dependents born before his retirement of a marriage subsisting when he was fifty-seven years old shall be entitled to the dependents' pension. (As amended by Sec. 4, P.D. No. 1202, S-1977)
(b) A covered member who is sixty 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.
(c) The monthly pension shall be reduced upon the re-employment of a retired employee who is less than sixty-five years old by an amount equivalent to one-half his earnings over three hundred pesos. He shall again be subject to section eighteen and his employer to section nineteen of this Act. (As amended by Sec. 7, R.A. 1792; Sec. 7, R.A. 2658; Sec. 6, P.D. No. 24, S-1972; Sec. 3, P.D. No. 177, S-1973; Sec. 8, P.D. No. 735; S-1975; Sec. 4, P.D. No. 1202, S-1977; and Sec. 7, P.D. No. 1636, S-1979)
(d) Upon the death of the retired employee pensioner, his primary beneficiaries as of the date of his retirement shall be entitled to eighty per cent of the monthly pension and his dependents to the dependents' pension: Provided, That if he has no primary beneficiaries and he dies within sixty months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the bigger of (1) twenty times the monthly pension or (2) the difference of sixty times the monthly pension and the total monthly pensions paid by the SSS excluding the dependents' pension. (As amended by Sec. 7, P.D. No. 1636, S-1979 and E.O. No. 102, S-1986)
Section 13. Death Benefits. — Upon the covered employee's death, his primary beneficiaries shall be entitled to the monthly pension and his dependents to the dependents' pension: Provided, That he has paid at least thirty-six monthly contributions prior to the semester of death: Provided, further, That if the foregoing condition is not satisfied his primary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-five times the monthly pension: Provided, further, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to twenty times the monthly pension: Provided, however, That the minimum death benefit shall not be less than the total contributions paid by him and his employer on his behalf nor less than one thousand pesos: Provided, finally, That the beneficiaries of the covered employee who dies without having paid at least three monthly contributions shall be entitled to the minimum benefit. (As amended by Sec. 5, P.D. No. 1202, S-1977 and Sec. 8, P.D. No. 1636, S-1979)
Section 13-A. Permanent disability benefits. — (a) Upon the covered employee's permanent total disability, if such disability occurs after he had paid at least thirty-six monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension and his dependents to the dependents' Pension: Provided, That if the disability occurs before he has paid thirty-six monthly contributions prior to the semester of disability, he shall be entitled to a lump sum benefit equivalent to thirty-five times the monthly pension: Provided, further, That the minimum disability benefit shall not be less than the total contributions paid by him and his employer on his behalf nor less than one thousand pesos: Provided, further, That a covered employee who becomes permanently totally disabled without having paid at least three monthly contributions shall be entitled to the minimum benefit: Provided, finally, That a member who (1) received a lump sum benefit and (2) is re-employed not earlier than one year from date of his disability shall again be subject to compulsory coverage and considered a new member. (As amended by Sec. 6, P.D. No. 1202, S-1977)
(b) The monthly pension shall be reduced upon his re-employment by an amount equivalent to one-half of his earnings over three hundred pesos. The monthly pension and dependents' pension shall be suspended upon his recovery from the permanent total disability, or his failure to present himself for examination at least once a year upon notice by the SSS. (As amended by Sec. 6, P.D. No. 1202, S-1977 and Sec. 9, P.D. No. 1636, S-1979)
(c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to eighty per cent of the monthly pension and his dependents to the dependents' pension: Provided, That if he has no primary beneficiaries and he dies within sixty months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the bigger of (1) twenty times the monthly pension or (2) the difference of sixty times the monthly pension and the total monthly pensions paid by the SSS excluding the dependents' pension. (As amended by Sec. 9, P.D. No. 1636, S-1979 and Sec. 6, E.O. No. 102, S-1986)
(d) The following disabilities shall be 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 as determined and approved by the SSS.
(As amended by Sec. 9, P.D. No. 1636, S-1979)
(e) If the disability is permanent partial, and such disability occurs before thirty-six monthly contributions have been paid prior to the semester of disability, the benefit shall be such percentage of the lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the Commission may determine. (As amended by Sec. 9, P.D. No. 1636, S-1979)
(f) If the disability is permanent partial and such disability occurs after thirty-six monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in the following schedule:
Complete and permanent loss of use of
|
Number of Months
|
One thumb
|
10
|
One index finger
|
8
|
One middle finger
|
6
|
One right finger
|
5
|
One little finger
|
3
|
One big toe
|
6
|
One hand
|
39
|
One arm
|
50
|
One foot
|
31
|
One leg
|
46
|
One ear
|
10
|
Both ears
|
20
|
Hearing of one ear
|
10
|
Hearing of both ears
|
20
|
Sight of one eye
|
25
|
(As amended by Sec. 10, P.D. No. 735, S-1975 and Sec. 9, P.D. No. 1636, S-1979)
(g) The percentage degree of disability, which is equivalent to the ratio that the designated number of months of compensability bears to seventy-five, rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities, to a maximum of one hundred per cent, in which case the employee shall be deemed as permanently totally disabled. (As amended by Sec. 9, P.D. No. 1636, S-1979)
Section 13-B. Funeral Benefit. — A funeral grant of two thousand pesos shall be paid to help defray the cost of funeral expenses upon the death of a covered member, permanently totally disabled employee or retiree. (As amended by Sec. 11, P.D. No. 735, S-1975; Sec. 2, E.O. No. 28, S-1986; and Sec. 7, E.O. No. 102, S-1986)
Section 14. Sickness Benefit. — (a) A covered employee who has paid at least three monthly contributions in the twelve-month period immediately preceding the semester of sickness and is confined for more than three days in a hospital or elsewhere with the Commission's approval, shall, for each day of compensable confinement or fraction thereof, be paid by his employer, or the SSS, if such person is unemployed, an allowance equivalent to ninety per cent of his average daily salary credit, subject to the following conditions: (As amended by Sec. 3, E.O. No. 28, S-1986)
(1) In no case shall the total amount of such daily allowance be less than seven pesos and fifty centavos nor exceed seventy-five pesos nor paid longer than one hundred twenty days in one calendar year; nor shall any unused portion of the one hundred twenty 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; (As amended by Sec. 3, E.O. No. 28, S-1986 and Sec. 8, E.O. No. 102, S-1986)
(2) No employee shall be paid any sickness benefit for more than two hundred forty days on account of the same confinement; and
(3) The employee shall notify his employer of the fact of his sickness or injury within five 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 he shall directly notify the SSS of his confinement within five 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. (As amended by Sec. 9, R.A. 2658; Sec. 7, R.A. 4857; Sec. 8, P.D. No. 24, S-1972; Sec. 12, P.D. No. 735, S-1975; and Sec. 10, P.D. No. 1636, S-1979)
(b) 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 shall have been exhausted. (As amended by Sec. 9, R.A. 2658; Sec. 7, R.A. 4857; Sec. 8, P.D. No. 24, S-1972; Sec. 5, P.D. No. 177, S-1973; and Sec. 14, P.D. No. 735, S-1975)
(c) One hundred per cent 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 calendar days after receipt of the notification from the employee: Provided, further, That if the notification to the SSS is made by the employer beyond five calendar days after receipt of the notification from the employee, 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 year from the last day of confinement. (As amended by Sec. 9, R.A. 2658; Sec. 1, R.A. 4482; Sec. 7, R.A. 4857; and Sec. 8, P.D. No. 24, S-1972)
(d) Where the employee 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 as required in this section. (As amended by Sec. 8, P.D. No. 24, S-1972 and Sec. 12, P.D. No. 735, S-1972)
(e) The claim of reimbursement shall be adjudicated by the SSS within a period of two months from receipt thereof; Provided, That should no payment be received by the employer within one month after the period prescribed herein for adjudication the reimbursement shall thereafter earn simple interest of one per cent per month until paid. (As amended by Sec. 8, P.D. No. 24, S-1972)
(f) The provisions regarding the notification required of the covered employee and the employer as well as the period within which the claim for benefit or reimbursement may be filed shall apply to all claims filed with the SSS beginning January 1, 1973. (As amended by Sec. 8, P.D. No. 24, S-1972)
Section 14-A. Maternity Leave Benefit. — A covered female employee who has paid at least three monthly maternity contributions in the twelve-month period preceding the semester of her childbirth, abortion, or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred per cent of her present basic salary, allowances and other benefits or the cash equivalents of such benefits for sixty days subject to the following conditions:
(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide;
(b) That the payment shall be advanced by the employer in two equal installments within thirty days from the filing of the maternity leave application;
(c) That in case of caesarian delivery, the employees shall be paid the daily maternity benefit for seventy-eight days;
(d) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same compensable period of sixty days for the same childbirth, abortion, or miscarriage;
(e) That the maternity benefits provided under this section shall be paid only for the first four deliveries after March 13, 1973;
(f) That the SSS shall immediately reimburse the employer of one hundred per cent of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and
(g) That if an employee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the employee concerned. (As amended by Sec. 7, P.D. No. 1202, S-1977; Sec. 11, P.D. No. 1636, S-1979; and R.A. 7322)
Section 15. Non-transferability of Benefits. — The SSS shall pay the benefits provided for in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act: Provided, 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 employee in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient. Such benefits are not transferrable 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: Provided, finally, That notwithstanding any law to the contrary, the payment of benefits under this Act shall bar the recovery of similar benefits under Title II of Book IV of the Labor Code of the Philippines, as amended, during the period of such payment for the same contingency, and conversely. (As amended by Sec. 10, R.A. 2658; Sec. 4, R.A. 3839; Sec. 8, R.A. 4857; Sec. 8-A, P.D. No. 24, S-1972; and Sec. 13, P.D. No. 735, S-1975)
Section 16. Exemption from Tax, Legal Process and Lien. — All laws to the contrary notwithstanding the SSS and all its assets and properties, all contributions collected and all accruals thereto and income or investment earnings therefrom as well as all supplies, equipment, papers or documents which may be required in connection with the operation or execution of this Act shall be exempt from any tax, assessment, fee, charge, or customs or import duty; and all benefit payments made by the SSS shall likewise be exempt from all kinds of taxes, fees or charges, and shall not be liable to attachments, garnishments, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the covered employee to the SSS. No tax measure hereafter enacted shall apply to the SSS, unless it expressly revokes the declared policy of the State in section two hereof granting tax-exemption to the SSS. Any tax assessment against, and still unpaid by the SSS shall be null and void. (As amended by Sec. 9, P.D. No. 24, S-1972 and Sec. 14, P.D. No. 735, S-1975)
Section 17. Fee of Agents, Attorneys, etc. — No agent, attorney or other person in charge of the preparation, filing or pursuing any claim for benefit under this Act shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Act for the payment of fees for such services is prohibited: Provided, however, That any member of the Philippine Bar who appears as counsel in any case heard by the Social Security Commission shall be entitled to attorney's fees not exceeding ten per cent of the benefits awarded by the Commission, which fees shall not be payable before the actual payment of the benefits, and any stipulation to the contrary shall be null and void.
Any violation of the provisions of this Section shall be punished by a fine of not less than five hundred pesos nor more than five thousand pesos, or imprisonment for not less than six months nor more than one year, or both, at the discretion of the court. (As amended by Sec. 4, P.D. No. 347, S-1973 and Sec. 8, P.D. No. 1202, S-1977)
E. Sources of Funds — Employment Records and Reports
SECTION 18. Employee's Contribution. — (a) Beginning as of the last day of the calendar month when an employee's compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee's monthly salary, wage, compensation or earnings, the employee's contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the following schedule effective on January 1, 1987:
Salary Bracket Number
|
Range of Compensation
|
Monthly Salary Credit
|
Monthly Contribution
|
Employer
|
Employee
|
Total
|
| I |
P 1 - 149.99
|
P 125.00
|
P 6.40
|
P 4.10
|
P 10.50
|
| II |
150 - 199.99
|
175
|
9
|
5.7
|
14.7
|
| III |
200 - 249.99
|
225
|
11.4
|
7.5
|
18.9
|
| IV |
250 - 349.99
|
300
|
15.2
|
10
|
25.2
|
| V |
350 - 499.99
|
425
|
21.6
|
14.1
|
35.7
|
| VI |
500 - 699.99
|
600
|
30.4
|
20
|
50.4
|
| VII |
700 - 899.99
|
800
|
40.5
|
26.7
|
67.2
|
| VIII |
900 - 1099.99
|
1,000.00
|
50.7
|
33.3
|
84
|
| IX |
1100 - 1399.99
|
1,250.00
|
63.3
|
41.7
|
105
|
| X |
1400 - 1749.99
|
1,500.00
|
76
|
50
|
126
|
| XI |
1750 - 2249.99
|
2,000.00
|
101.3
|
66.7
|
168
|
| XII |
2250 - 2749.99
|
2,500.00
|
126.7
|
83.3
|
210
|
| XIII |
2750 - OVER
|
3,000.00
|
152
|
100
|
252
|
The tabulated schedule for the monthly contribution of the self-employed and voluntary members effective January 1, 1987 shall be as follows:
Salary Bracket Number
|
Range of compensation
|
Monthly Salary Credit
|
Monthly Contribution
|
| I |
P 1 - 149.99
|
P 125.00
|
P 10.00
|
| II |
150 - 199.99
|
175
|
14
|
| III |
200 - 249.99
|
225
|
18
|
| IV |
250 - 349.99
|
300
|
24
|
| V |
350 - 499.99
|
425
|
34
|
| VI |
500 - 699.99
|
600
|
48
|
| VII |
700 - 899.99
|
800
|
64
|
| VIII |
900 - 1,099.99
|
1,000.00
|
80
|
| IX |
1,100 - 1,399.99
|
1,250.00
|
100
|
| X |
1,400 - 1,749.99
|
1,500.00
|
120
|
| XI |
1,750 - 2,249.99
|
2,000.00
|
160
|
| XII |
2,250 - 2,749.99
|
2,500.00
|
200
|
| XIII |
2,750 - OVER
|
3,000.00
|
240
|
The maximum covered earnings or compensation of all SSS members shall be limited to three thousand pesos per month as provided in the foregoing schedules unless otherwise provided by the Social Security Commission through rules and regulations taking into consideration actual calculations and rate of benefits. (As amended by Sec. 10, R.A. 1792; Sec. 11, R.A. 2658; Sec. 10, P.D. No. 24, S-1972; and Sec. 9, P.D. No. 1202, S-1986)
(b) Every employer shall issue a receipt for all contributions deducted from the employee's compensation or shall indicate such deductions on the employee's pay envelopes. (As amended by Sec. 12, P.D. No. 1636, S-1979)
Section 19. Employer's Contributions. — (a) Beginning as of the last day of the month when an employee's compulsory coverage takes effect and every month thereafter during his employment, his employer shall pay, with respect to such covered employee, the employer's contribution in accordance with the schedule indicated in section eighteen of this Act. Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, from the compensation of his employees covered by the SSS or otherwise recover from them the employer's contributions with respect to such employees.
(b) The remittance of such contributions by the employer shall be supported by a quarterly collection list to be submitted to the SSS at the end of each calendar quarter indicating the correct ID number of the employer, the correct names and SS numbers of the employees and the total contributions paid for their account during the quarter. (As amended by Sec. 13, P.D. No. 1636, S-1979)
Section 19-A. Contributions of the Self-employed. — The contributions to the SSS of the self-employed shall be determined in accordance with section eighteen of this Act: Provided, That the average monthly net earnings declared by the self-employed at the time of his registration with the SSS shall be considered as his monthly compensation and he shall pay both the employer and employee contributions.
Net earnings as understood under this section shall be the net income from his business or profession as reflected in the income tax return for the immediately preceding year, excluding rental income, dividend, interest investments and the like or all types of incomes which are not derived from his business registered with the SSS or from the practice of his profession.
The average monthly net earnings declared by the self-employed member at the time of his registration shall remain the basis of his monthly salary credit, unless he makes, at the start of the year, another declaration of his average monthly net earnings based on his income tax returns for the immediately preceding year, in which case such latest declaration becomes the new basis of his monthly salary credit. (As amended by Sec. 14, P.D. No. 1636, S-1979)
Section 20. Government Contribution. — As the contribution of the Government to the operation of the System, the Congress shall annually appropriate out of any funds in the National Treasury not otherwise appropriated, the necessary sum or sums to meet the estimated expenses of the System for each ensuing year. In addition to this contribution, the Congress shall appropriate from time to time such sum or sums as may be needed to assure the maintenance of an adequate working balance of the funds of the System as disclosed by suitable periodic actuarial studies to be made of the operations of the System.
Section 21. Government Guarantee. — The benefits prescribed in this Act shall not be diminished and to guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the System. (As amended by Sec. 13, R.A. 1792)
Section 22. Remittance of Contributions. — (a) The contribution imposed in the preceding section shall be remitted to the SSS within the first seven days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer required to deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three per cent per month from the date the contribution falls due until paid. If deemed expedient and advisable by the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the contributions payable by the employees to be advanced by their respective employers: Provided, That upon separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to his employer. (As amended by Sec. 12, P.D. No. 24, S-1972)
(b) The contributions payable under this Act in cases where an employer refuses or neglects to pay the same shall be collected by the SSS in the same manner as taxes are made collectible under the National Internal Revenue Code, as amended. 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.
The right to institute the necessary action against the employer may be commenced within twenty years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be. (As amended by Sec. 15, P.D. No. 1636, S-1979)
(c) Should any person, natural or juridical, default in any payment of contributions, the Commission may also collect the same in either of the following ways:
(1) By an action in court, which shall hear and dispose of the case in preference to any other civil action, or
(2) By issuing a warrant to the Sheriff of any province or city commanding him to levy upon and sell any real and personal property of the debtor. The Sheriff's sale by virtue of said warrant shall be governed by the same procedure prescribed for executions against property upon judgments by a court of record.
(d) The last complete record of monthly contributions paid by the employer or the average of the monthly contributions paid during the past three years as of the date of filing of the action for collection shall be presumed to be the monthly contributions payable by and due from the employer to the SSS for each of the unpaid month, unless contradicted and overcome by other evidence: Provided, That the SSS shall not be barred from determining and collecting the true and correct contributions due the SSS even after full payment pursuant to this paragraph, nor shall the employer be relieved of his liability under section twenty-eight of this Act. (As amended by Sec. 12, P.D. No. 24, S-1972 and Sec. 11, P.D. No. 1202, S-1977)
(e) For purposes of this Section, any employer who is delinquent or has not remitted all the monthly contributions due and payable may within six months from the issuance of this Executive Order remit said contributions to the SSS and submit the corresponding collection lists herefore without incurring the prescribed three per cent penalty. In case the employer fails to remit to the SSS the said contributions within the six months grace period, the penalty of three per cent shall be imposed from the time the contributions first became due as provided in paragraph (a) of this section. (As amended by Sec. 12, P.D. No. 24, S-1972; Sec. 6, P.D. No. 177, S-1973; and Sec. 4, E.O. No. 28, S-1986)
Section 22-A. Remittance of Contributions of Self-employed. — Self-employed members shall remit their monthly contributions quarterly on such dates and schedules, as the Commission may specify through rules and regulations.
The penalty of three per cent per month for late payments provided for in paragraph (a) of section twenty-two of this Act and the manner of collection of contributions specified in paragraphs (b), (c) and (d) of section twenty-two of this Act are also applicable to the collection of penalties and contributions of the covered self-employed. (As amended by Sec. 16, P.D. No. 1636, S-1979)
Section 23. Method of Collection and Payment. — The SSS shall require a complete and proper collection and payment of contributions and proper identification of the employer and the employee. Payment may be made in cash, checks, stamp, coupons, tickets, or other reasonable devices that the Commission may adopt. (As amended by Sec. 15, P.D. No. 735, S-1975)
Section 24. Employment Records and Reports. — (a) Each employer shall immediately report to the SSS the names, ages, civil status, occupations, salaries and dependents of all his employees who are subject to compulsory coverage: Provided, That if an employee subject to compulsory coverage should die or become sick or disabled or reach the age of sixty without the SSS having previously received any report or written communication about him from his employer or a contribution paid in his name by his employer, the said employer shall pay to the SSS the damages equivalent to the benefits to which said employee would have been entitled had his name been reported on time by the employer to the SSS, except that in case of pension benefits, the employer shall be liable to pay the SSS damages equivalent to five year's monthly pension; including dependents' pension: Provided, further, That if the contingency occurs within thirty days from the date of employment, the employer shall be relieved of his liability for damages. (As amended by Sec. 15, R.A. 1792; Sec. 9, R.A. 4857; Sec. 13, P.D. No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and Sec. 12, P.D. No. 1202, S-1977)
(b) Should the employer misrepresent the true date of employment of his employees or remit to the SSS contributions which are less than those required in this Act, resulting in a reduction of benefits, the employer shall pay to the SSS damages to the extent of such reduction. (As amended by Sec. 13, P.D. No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and Sec. 17, P.D. No. 1636, S-1979)
In addition to the liability mentioned in the preceding paragraphs (a) and (b) hereof, the employer shall also be liable for the payment of the corresponding unremitted contributions and penalties thereon. (As amended by Sec. 17, P.D. No. 1636, S-1979)
(c) The records and reports duly accomplished and submitted to the SSS by the employee or the employer, as the case may be, shall be kept confidential by the SSS except in compliance with a subpoena duces tecum issued by the Courts, shall not be divulged without the consent of the Administrator or any official of the SSS duly authorized by him, shall be presumed correct as to the data and other matters stated therein, unless the necessary corrections to such records and reports have been properly made by the parties concerned before the right to the benefit being claimed accrues, and shall be made the basis for the adjudication of the claim. If as a result of such adjudication the SSS in good faith pays a monthly pension to a beneficiary who is inferior in right to another beneficiary or with whom another beneficiary is entitled to share, such payments shall discharge the SSS from liability, unless and until such other beneficiary notifies the SSS of his claim prior to the payments. (As amended by Sec. 13, P.D. No. 24, S-1972 and Sec. 16, P.D. No. 735, S-1975)
(d) Every employer shall keep true and accurate work records for such period and containing such information as the Commission may prescribe, in addition to an "Annual Register of New and Separated Employees" which shall be secured from the SSS wherein the employer shall enter on the first day of employment or on the effective date of separation, the names of the persons employed or separated from employment, their SSS numbers, and such other data that the Commission may require and said annual register shall be submitted to the SSS in the month of January of each year. Such records shall be open for inspection by the SSS or its authorized representatives quarterly or as often as the SSS may require.
The SSS may also require each employer to submit, with respect to the persons in his employ, reports needed for the effective administration of this Act. (As amended by Sec. 13, P.D. No. 24, S-1972)
(e) Effective July 1, 1973, each employer shall require as a condition to employment, the presentation of a registration number secured by the prospective employee from the SSS in accordance with such procedure as the SSS may adopt: Provided, That in case of employees who have earlier been assigned registration numbers by virtue of a previous employment, such numbers originally assigned to them should be used for purposes of this section: Provided, further, That the issuance of such registration numbers by the SSS shall not exempt the employer from complying with the provisions of paragraph (a) of this section. (As amended by Sec. 13, P.D. No. 24, S-1972)
(f) Notwithstanding any law to the contrary, microfilm copies of original SSS records and reports, duly certified by the official custodian thereof, shall have evidentiary value as the originals and be admissible as evidence in all legal proceedings. (As amended by Sec. 16, P.D. No. 735, S-1975)
Section 24-A. Report and Registration of the Self-employed. — Each covered self-employed person shall, within thirty days from the effective date of coverage, report to the SSS his name, age, civil status, and occupation, average monthly net income and his dependents: Provided, That if after said period of thirty days, he should die or become sick, or disabled or reach the age of sixty without the SSS having previously received such report, the SSS shall not pay him the corresponding benefit. (As amended by Sec. 18, P.D. No. 1636, S-1979)
F. Funds of the System
Section 25. Deposit and Disbursements. — All moneys paid to or collected by the SSS every year under this Act, and all accruals thereto shall be deposited, administered and disbursed in the same manner and under the same conditions and requirements as provided by law for other public special funds: Provided, That not more than twelve per cent of the total yearly contributions plus three per cent of other revenues shall be disbursed for salaries and wages, purchases of office equipment and materials, operational expenses and the maintenance of regional offices of the SSS: Provided, further, That if the expenses in any year are less than the maximum amount permissible, the difference shall not be availed of as additional expenses in the following years. (As amended by Sec. 16, R.A. 2658; Sec. 5, R.A. 3839; Sec. 10, R.A. 4857; Sec. 13-A, P.D. No. 24, S-1972; Sec. 17, P.D. No. 735, S-1975; and Sec. 10, E.O. No. 102, S-1986)
Section 26. Investment of Reserve Funds. — All revenues of the SSS that are not needed to meet the current administrative and operational expenses incidental to the carrying out of this Act shall be accumulated in a fund to be known as the 'Reserve Fund'. Such portions of the Reserve Fund as are not needed to meet the current benefit obligations thereof shall be invested to earn an average annual income of at least nine per cent and shall be known as the 'Investment Reserve Fund' which shall be invested in any or all of the following: (As amended by Sec. 14, P.D. No. 24, S-1972; Sec. 19, P.D. No. 1636, S-1979; and Sec. 11, E.O. No. 102, S-1986)
(a) In interest-bearing bonds or securities of the Government of the Philippines, or bonds or securities for the payment of the interest and principal to which the faith and credit of the Republic of the Philippines is pledged.
(b) In interest-bearing deposits or securities in any domestic bank doing business in the Philippines: Provided, That such deposits shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That said bank shall first have been designated as the depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas: Provided, finally, That such investment in deposits or securities shall be equitably distributed to all designated banks. (As amended by Sec. 14, P.D. No. 24, S-1972)
(c) In loans or interest-bearing advances to the National Government for the construction of permanent toll bridges, toll roads or government office buildings in accordance with actuarial considerations and the conditions prescribed by law in such cases: Provided, That the tolls shall be collected by the SSS for a reasonable fee. (As amended by Sec. 14, P.D. No. 24, S-1972)
(d) In direct housing loans to covered employees and group housing projects giving priority to the low-income groups, up to a maximum of ninety per cent of the appraised value of the properties to be mortgaged by the borrowers and in loans for the construction and the maintenance of hospitals and institutions for the sick, aged and infirmed members and their families, referred to in section 4 (j) of this Act: Provided, That such investment shall not exceed thirty per cent of the Investment Reserve Fund. (As amended by Sec. 15, R.A. 2658; Sec. 14, P.D. No. 24, S-1972; Sec. 18, P.D. No. 735, S-1975; and Sec. 11, E.O. No. 102, S-1986)
(e) In short and medium term loans to covered employees such as salary, educational, calamity and emergency loans: Provided, That not more than ten per cent of the Investment Reserve Fund at any time shall be invested for this purpose. (As amended by Sec. 15, R.A. 2658; Sec. 14, P.D. No. 24, S-1972; and Sec. 11, E.O. No. 102, S-1986)
(f) In other income earning projects and investments secured by first mortgages on real estate collaterals which, in the determination of the Commission, shall redound to the benefit of the SSS, its members, as well as the public welfare: Provided, That any such investment shall be made with due diligence and prudence to earn the highest possible interest consistent with safety. (As amended by Sec. 17, R.A. 1792; Sec. 11, R.A. 4857; and Sec. 14, P.D. No. 24, S-1972)
(g) As part of its investment operations, the SSS shall act as insurer of all or part of its interests on SSS properties mortgaged to the SSS, or lives of mortgagors whose properties are mortgaged to the SSS. For this purpose, the SSS shall establish a separate account to be known as the "Mortgagors' Insurance Account." All amounts received by the SSS in connection with the aforesaid insurance operations shall be placed in the Mortgagors' Insurance Account. The assets and liabilities of the Mortgagors' Insurance Account shall at all times be clearly identifiable and distinguishable from the assets and liabilities in all other accounts of the SSS. Notwithstanding any provision of law to the contrary, the assets held in the Mortgagors' Insurance Account shall not be chargeable with the liabilities arising out of any other business the SSS may conduct but shall be held and applied exclusively for the benefit of the owners or beneficiaries of the insurance contracts issued by the SSS under this paragraph.
(h) The SSS may insure any of its interests or part thereof with any private company or reinsurer. The Insurer Commission or its authorized representatives shall make an examination into the financial condition and methods of transacting business of the SSS at least once in two years, but such examination shall be limited to the insurance operation of the SSS as authorized under this section and shall not embrace the other operations of the SSS; and the report of said examination shall be submitted to the Commission and a copy thereof shall be furnished the office of the President of the Philippines within a reasonable time after the close of the examination: Provided, That for each examination, the SSS shall pay to the Insurance Commission an amount equal to the actual expenses of the Insurance Commission in the conduct of the examination including the salaries of the examiners and of the actuary of the Insurance Commission who have been assigned to make such examination for the actual time spent in said examination: Provided, further, That the general law on insurance promulgated thereunder shall have suppletory application insofar as it is not in conflict with the SS Law and its rules and regulations. (As amended by Sec. 14, P.D. No. 24, S-1972; Sec. 1, P.D. No. 65; Sec. 7, P.D. No. 177, S-1973; and Sec. 18, P.D. No. 735, S-1975)
(i) In bonds, debentures or other evidences of indebtedness of any solvent corporation or institution created or existing under the laws of the Philippines: Provided, That the issuing, assuming or guaranteeing entity or its predecessors shall not have defaulted in the payment of interest on any of its securities and that during each of any three including the last two of the five fiscal years next preceding the date of acquisition by the SSS of such bonds, debentures, or other evidences of indebtedness, the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges, as hereinafter defined, shall have been not less than one and one-quarter times the total of its fixed charges for such year: Provided, further, That such investment shall not exceed 10 per cent of the Investment Reserve Fund.
As used in this section, the term 'net earnings available for fixed charges' shall mean net income after deducting operating and maintenance expenses, taxes other than income taxes, depreciation and depletion; but excluding extraordinary non-recurring items of income or expense appearing in the regular financial statement of the issuing, assuming or guaranteeing institution. The Term 'fixed charges' shall include interest on funded and unfunded debt, amortization of debt discount and rentals for leased properties. (As amended by Sec. 12, E.O. No. 102, S-1986)
(j) In preferred stocks of any solvent corporation or institution created or existing under the laws of the Philippines: Provided, That the issuing, assuming, or guaranteeing entity or its predecessors has paid regular dividends upon its preferred or guaranteed stocks for a period of at least three years next preceding the date of investment in such preferred or guaranteed stocks: Provided, further, That if the stocks are guaranteed, the amount of stocks so guaranteed is not in excess of fifty percentum of the amount of the preferred or common stocks, as the case may be, of the issuing corporations: Provided, furthermore, That if the corporation or institution has not paid dividends upon its preferred stocks, the corporation or institution has sufficient retained earnings to declare dividends for at least two years on such preferred stock: Provided, finally, That such investment shall not exceed 10 per cent of the Investment Reserve Fund. (As amended by Sec. 12, E.O. No. 102, S-1986)
(k) In common stocks of any solvent corporation or institution created or existing under the laws of the Philippines listed in the stock exchange with proven track record of profitability and payment of dividends over the last three years: Provided, That such investment shall not exceed ten per cent of the Investment Reserve Fund. (As amended by Sec. 12, E.O. No. 102, S-1986)
Section 27. Records and Reports. — The administrator shall keep and cause to be keep records of operations, of the funds of the System and of disbursements thereof and all accounts of payments made out of said funds. During the month of January of each year, the Administrator shall prepare for submission to the President and to the Congress of the Philippines a report of operations of the System during the preceding year including statistical data on the number of persons covered and benefited, their occupations and employment status, the duration and amount of benefits paid, the finances of the System at the close of the said year, and recommendations. He shall also cause to be published in two newspapers of general circulation in the Philippines a synopsis of the annual report, showing in particular the status of the finances of the System and the benefits administered.
Section 28. Penal Clause. — (a) Whoever, for the purpose of causing any payment to be made under this Act, or under an agreement thereunder, where none is authorized to be paid, shall make or cause to be made any false statement or representation as to any compensation paid or received or whoever makes or causes to be made any false statement of a material fact in any claim for any benefit payable under this Act, or application for loan with the SSS, or whoever makes or causes to be made any false statement, representation, affidavit, or document in connection with such claim or loan, shall suffer the penalties provided for in Art. one hundred seventy-two of the Revised Penal Code. (As amended by Sec. 15, P.D. No. 24, S-1972; Sec. 8, P.D. No. 177, S-1973; and Sec. 5, P.D. No. 347, S-1973)
(b) Whoever shall obtain or receive any money or check under this Act or any agreement thereunder, without being entitled thereto with intent to defraud any covered employee, employer or the SSS, shall be fined not less than five hundred pesos nor more than five thousand pesos and imprisoned for not less than six months nor more than one year. (As amended by Sec. 15, P.D. No. 24, S-1972)
(c) Whoever buys, sells, offers for sale, uses, transfers, takes or gives in exchange, or pledges or gives in pledge, except as authorized in this Act or in regulations made pursuant thereto, any stamp, coupon, ticket, book or other device, prescribed pursuant to section twenty-three hereof by the Commission for the collection or payment of contributions required herein, shall be fined not less than five hundred pesos nor more than five thousand pesos, or imprisoned for not less than six months nor more than one year, or both, at the discretion of the court.
(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp, coupon, ticket, book or other device prescribed by the Commission for the collection or payment of any contribution required herein, or uses, sells, lends, or has in his possession any such altered, forged, or counterfeited materials or makes, uses, sells, or has in his possession any such altered, forged material in imitation of the material used in the manufacture of such stamp, coupon, ticket, book, or other device, shall be fined not less than one thousand pesos nor more than ten thousand pesos or imprisoned for not less than one year nor more than five years, or both, at the discretion of the court.
(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than five hundred pesos nor more than five thousand pesos, imprisonment for not less than six months nor more than one year, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed or to deduct contributions from employee's compensation and remit the same to the SSS, the penalty shall be a fine of not less than five hundred pesos nor more than five thousand pesos and imprisonment for not less than six months nor more than one year. (As amended by Sec. 19, R.A. 1792; Sec. 16, R.A. 2658, Sec. 8, P.D. No. 177, S-1973; and Sec. 20, P.D. No. 1636, S-1979)
(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.
(g) Any employee of the System who receives or keeps funds or property belonging, payable or deliverable to the System and who shall appropriate the same, or shall take or misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such property or funds, wholly or partially, or shall otherwise be guilty of misappropriation of such funds or property, shall suffer the penalties provided in Art. two hundred seventeen of the Revised Penal Code. (As amended by Sec. 16, R.A. 2658)
(h) Any employer who after deducting the monthly contributions or loan amortizations from his employee's compensation; fails to remit the said deductions to the SSS within thirty days from the date they became due shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Art. three hundred fifteen of the Revised Penal Code. (As amended by Sec. 15, P.D. No. 24, S-1972)
(i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: Provided, That such criminal action may be filed by the SSS in the city or municipality where the SSS provincial or regional office is located if the violation was committed within its territorial jurisdiction or in Metro Manila, at the option of the SSS. (As amended by Sec. 15, P.D. No. 24, S-1972; Sec. 19, P.D. No. 735, S-1975; and Sec. 13, P.D. No. 1202, S-1977)
Section 29. Government Aid. — The establishment of the Social Security System shall not disqualify the covered employees and employers from receiving such government assistance, financial or otherwise, as may be provided.
Section 30. Separability Clause. — In the event any provision of this Act or the application of such provision to any person or circumstance is declared invalid, the remainder of this Act or the application of said provision to other persons or circumstances shall not be affected by such declaration.
Section 31. Saving Clause. — The Assembly hereby reserves the right to amend, alter, or repeal any provision of this Act, and no person shall be or shall be deemed to be vested with any property or other right by virtue of the enactment or operation of this Act. (As amended by Sec. 21, R.A. 1792 and Sec. 20, P.D. No. 735, S-1975)
Section 32. Effectivity. — This Act shall take effect upon its approval.
Approved: June 18, 19541awphil@alf
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