Regulatory Framework for Business Transactions ATTY. JOHNSON A.H.

ONG, CPA, MBA

RFBT Social Security Act of 2018 SUMMER 2021
STUDENT HANDOUTS

Social Security Act of 2018 – R.A. 11199 f. Compensation – All actual remuneration for employment,
including :he mandated cost-of-living allowance, as well as
Declaration of Policy the cash value of any remuneration paid in any medium
It is the policy of the State to establish, develop, promote and other than cash except that part of the remuneration
perfect a sound and viable tax-exempt social security system received during the month in excess of the maximum
suitable to the needs of the people throughout the Philippines salary credit as provided in this Act.
which shall promote social justice through savings, and ensure g. Monthly salary credit – The compensation base for
meaningful social security protection to members and their contributions and benefits as indicated in this
beneficiaries against the hazards of disability, sickness, Act: Provided, That in the computation of benefits, the
maternity, old age, death, and other contingencies resulting in maximum monthly salary credit to be considered shall be
loss of income or financial burden. Towards this end. the State Twenty thousand pesos (₱20,000.00), until adjusted as
shall endeavor to extend social security protection to Filipino provided in Section 4(a)(9).
workers, local or overseas, and their beneficiaries. h. Monthly – The period from one end of the last payroll
In the pursuit of this policy, a social security program shall be period of the preceding month to the end of the last payroll
developed emphasizing the value of "work, save, invest and period of the current month if compensation is on hourly,
prosper". The maximum profitability of investible funds and daily or weekly basis; if on any other basis, ‘monthly’ shall
resources of the program shall be ensured through a culture of mean a period of one (1) month.
excellence in management grounded upon sound and efficient i. Contribution – The amount paid to the SSS by and on behalf
policies employing internationally recognized best practices. of the members in accordance with the schedule provided
in this Act.
Terms Defined j. Employment – Any service performed by an employee for
For purposes of this Act, the following terms shall, unless the his employer except:
context indicates otherwise, have the following meanings: 1. Services where there is no employer-employee
a. SSS – The Social Security System created by this Act. relationship in accordance with existing labor laws,
b. Commission – The Social Security Commission as herein rules, regulations and jurisprudence;
created. 2. Service performed in the employ of the Philippine
c. Employer – Any person, natural or juridical, domestic or Government or instrumentality or agency thereof;
foreign, who carries on in the Philippines any trade, 3. Service performed in the employ of a foreign
business, industry, undertaking, or activity of any kind and government or international organization, or their
uses the services of another person who is under his wholly-owned instrumentality: Provided,
orders as regards the employment, except the government however, That this exemption notwithstanding, any
and any of its political subdivisions, branches or foreign government, international organization or
instrumentalities, including corporations owned or their wholly-owned instrumentality employing
controlled by the Government: Provided, That a self- workers in the Philippines or employing Filipinos
employed person shall be both employee and employer at outside of the Philippines, may enter into an
the same time. agreement with the Philippine Government for the
d. Employee – Any person who performs services for an inclusion of such employees in the SSS except those
employer in which either or both mental or physical efforts already covered by their respective civil service
are used and who receives compensation for such services, retirement systems: Provided, further, That the terms
where there is an employer-employee of such agreement shall conform with the provisions
relationship: Provided, That a self-employed person shall of this Act on coverage and amount of payment of
be both employee and employer at the same time. contributions and benefits: Provided, finally, That the
e. Dependents – The dependents shall be the following: provisions of this Act shall be supplementary to any
1. The legal spouse entitled by law to receive support such agreement; and
from the member; 4. Such other services performed by temporary and
2. The legitimate, legitimated or legally adopted, and other employees which may be excluded by regulation
illegitimate child who is unmarried, not gainfully of the Commission. Employees of bona
employed, and has not reached twenty-one (21) years fide independent contractors shall not be deemed
of age, or if over twenty-one (21) years of age, he is employees of the employer engaging the service of
congenitally or while still a minor has been said contractors.
permanently incapacitated and incapable of self- k. Beneficiaries – The dependent spouse until he or she
support, physically or mentally: and remarries, the dependent legitimate, legitimated or legally
3. The parent who is receiving regular support from the adopted, and illegitimate children, who shall be the
member. primary beneficiaries of the member: Provided, That the

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dependent illegitimate children shall be entitled to fifty in the regular financial statement of the issuing or
percent (50%) of the share of the legitimate, legitimated or assuming institution.
legally adopted children: Provided, further, That in the u. Fixed charges – Recurring expense such as amortization of
absence of the dependent legitimate, legitimated or legally debt discount and rentals for leased properties, including
adopted children of the member, his/her dependent interest on funded and unfunded debt. (Sec 8)
illegitimate children shall be entitled to one hundred
percent (100%) of the benefits. In their absence, the Coverage
dependent parents who shall be the secondary a. Compulsory coverage of all employees
beneficiaries of the member. In the absence of all the Coverage in the SSS shall be compulsory upon all
foregoing, any other person designated by the member as employees including kasambahays or domestic workers
his/her secondary beneficiary. not over sixty (60) years of age and their employers:
l. Contingency – The retirement, death, disability, injury or That any benefit already earned by the employees under
sickness and maternity of the member. private benefit plans existing at the time of the approval of
m. Average monthly salary credit – The result obtained by this Act shall not be discontinued, reduced or otherwise
dividing the sum of the last sixty (60) monthly salary impaired.
credits immediately preceding the semester of That private plans which are existing and in force at the
contingency by sixty (60), or the result obtained by time of compulsory coverage shall be integrated with the
dividing the sum of all the monthly salary credits paid prior plan of the SSS in such a way where the employers
to the semester of contingency by the number of mohthly contribution to his private plan is more than that required
contributions paid in the same period, whichever is of him in this Act, he shall pay to the SSS only the
greater: Provided, That the injury or sickness which caused contribution required of him and he shall continue his
the disability shall be deemed as the permanent disability contribution to such private plan less his contribution to
for the purpose of computing the average monthly salary the SSS so that the employer’s total contribution to his
credit. benefit plan and to the SSS shall be the same as his
n. Average daily salary credit – The result obtained by contribution to his private benefit plan before the
dividing the sum of the six (6) highest monthly salary compulsory coverage: Provided, further, That any changes,
credits in the twelve-month period immediately preceding adjustments, modifications, eliminations or improvements
the semester of contingency by one hundred eighty (180). in the benefits to be available under the remaining private
o. Semester – A period of two (2) consecutive quarters plan, which may be necessary to adopt by reason of the
ending in the quarter of contingency. reduced contributions thereto as a result of the
p. Quarter – A period of three (3) consecutive calendar integration, shall be subject to agreements between the
months ending on the last day of March. June. September employers and employees concerned: Provided,
and December. further, That the private benefit plan which the employer
q. Credited years of service – For a member covered prior to shall continue for his employees shall remain under the
January nineteen hundred and eighty-five (1985) minus employer‘s management and control unless there is an
the calendar year of coverage plus the number of calendar existing agreement to the contrary: Provided, finally, That
years in which six (6) or more contributions have been nothing in this Act shall be construed as a limitation on the
paid from January nineteen hundred and eighty-five right of employers and employees to agree on and adopt
(1985) up to the calendar year containing the semester benefits which are over and above those provided under
prior to the contingency. For a member covered in or after this Act.
January nineteen hundred and eighty-five (1985), the • Spouses who devote full time to managing the
number of calendar years in which six (6) or more household and family affairs, unless they are also
contributions have been paid from the year of coverage up engaged in other vocation or employment which is
to the calendar year containing the semester prior to the subject to mandatory coverage, may be covered by the
contingency: Provided, That the Commission may provide SSS on a voluntary basis. (Sec 9)
for a different number of contributions in a calendar year b. Compulsory coverage for self employed
for it to be considered as a credited year of service. Coverage in the SSS shall also be compulsory upon such
r. Member – The worker who is covered under Section 9, self-employed persons as may be determined by the
Section 9-A and Section 9-B of this Act. Commission under such rules and regulations as it may
s. Self-employed – Any person whose income is not derived prescribe, including, but not limited to the following:
from employment, as defined under this Act, as well as 1. All seif-empioyed professionals;
those workers enumerated in Section 9-A hereof. 2. Partners and single proprietors of businesses;
t. Net earnings – Net income before income taxes plus non- 3. Actors and actresses, directors, scriptwriters and
cash charges such as depreciation and depletion appearing news correspondents who do not fall within the

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definition of the term "employee" in Section 8(d) of 5. The DFA, the DOLE and, the SSS shall ensure
this Act; compulsory coverage of OFWs through bilateral social
4. Professional athletes, coaches, trainers and jockeys; security and labor agreements and other measures for
and enforcement.
5. Individual farmers and fishermen. 6. Upon the termination of their employment overseas,
• Unless otherwise specified herein, all provisions OFWs may continue to pay contributions on a
of this Act applicable to covered employees shall voluntary basis to maintain their rights to full benefits.
also be applicable to the covered self-employed 7. Filipino permanent migrants, including Filipino
persons. (Sec 9-A) immigrants, permanent residents and naturalized
c. Compulsory Coverage of Overseas Filipino Workers (OFWs) citizens of their host countries may be covered by the
1. Coverage in the SSS shall be compulsory upon all sea- SSS on a voluntary basis. (Sec 9 -B)
based and land-based OFWs as defined under
Republic Act No. 8042, otherwise known as the Effective Date of compulsory Coverage
Migrant Workers and Overseas Filipinos Act of 1995. 1. Employer - First day of his operation
as amended by Republic Act No. 10022: Provided, That 2. Employee - Day of his employment
they are not over sixty (60) years of age. 3. Self-employed - Registration with the SSS. (Sec 10)
All benefit provisions under this Act shall apply to all
covered OFWs. The benefits include, among others, Effect of Separation from Employment
retirement, death, disability, funeral, sickness and When an employee under compulsory coverage is separated
maternity. from employment, his employer’s contribution on his account
2. Manning agencies are agents of their principals and and his obligation to pay contributions arising from that
are considered as employers of sea-based OFWs. employment shall cease at the end of the month of separation,
For purposes of the implementation of this Act, any but said employee shall be credited with all contributions paid
law to the contrary notwithstanding manning agencies on his behalf and entitled to benefits according to the
are jointly and severally or solidarity liable with their provisions of this Act. He may, however, continue to pay the
principals with respect to the civil liabilities incurred total contributions to maintain his right to full benefit. (Sec 11)
for any violation of this Act.
The persons having direct control, management or Effect of Interruption of Business or Professional Income
direction of the manning agencies shall be held If the self-employed member realizes no income in any given
criminally liable for any act or omission penalized month, he shall not be required to pay contributions for that
under this Act notwithstanding Section 28(f) hereof. month. He may, however, be allowed to continue paying
3. Land-based OFWs are compulsory members of the SSS contributions under the same rules and regulations applicable
and considered in the same manner as self-employed to a separated employee member: Provided, That no
persons under such rules and regulations that the retroactive payment of contributions shall be allowed other
Commission shall prescribe. than as prescribed under Section 22-A hereof. (Sec 11-A)
4. The Department of Foreign Affairs (DFA), the
Department of Labor and Employment (DOLE) and all Monthly Pension
its agencies involved in deploying OFWs for (a) The monthly pension shall be the highest of the following
employment abroad are mandated to negotiate amounts:
bilateral labor agreements with the OFWs’ host (1) The sum of the following:
countries to ensure that the employers of land-based (i) Three hundred pesos (₱300.00); plus
OFWs, similar to the principals of sea-based OFWs, pay (ii) Twenty percent (20%) of the average
the required SSS contributions, in which case these monthly salary credit; plus
land-based OFWs shall no longer be considered in the (iii) Two percent (2%) of the average monthly
same manner as self-employed persons in this Act. salary credit for each credited year of service
Instead, they shall be considered as compulsorily in excess of ten (10) years; or
covered employees with employer and employee (2) Forty percent (40%) of the average monthly salary
shares in contributions that shall be provided for in credit; or
the bilateral labor agreements and their implementing (3) One thousand pesos (₱1,000.00): Provided, That the
administrative agreements: Provided, That in monthly pension shall in no case be paid for an
countries which already extend social security aggregate amount of less than sixty (60) months.
coverage to OFWs, the DFA through the Philippine (b) Notwithstanding the preceding paragraph, the minimum
embassies and the DOLE shall negotiate further pension shall be One thousand two hundred pesos
agreements to serve the best interests of the OFWs. (₱1,200.00) for members with at least ten (10) credited
years of service and Two thousand four hundred pesos

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(₱2,400.00) for those with twenty (20) credited years of He shall again be subject to Section Eighteen and his
service: Provided, That the Commission, upon employer to Section Nineteen of this Act.
determination of actuarial soundness, may provide (d) Upon the death of the retired member, his primary
pension increase than the amounts specified herein. beneficiaries as of the date of his retirement shall be
(c) Additional Benefit Allowance. - Pursuant to Memorandum entitled to receive the monthly pension: Provided, That if
from the Executive Secretary dated 22 February 2017, by he has no primary beneficiaries and he dies within sixty
authority of the President of the Republic of the (60) months from the start of his monthly pension, his
Philippines, an additional monthly benefit allowance secondary beneficiaries shall be entitled to a lump sum
amounting to One thousand pesos (₱1,000.00) shall be benefit equivalent to the total monthly pensions
given to all retirement, death, and disability pensioners corresponding to the balance of the five-year guaranteed
receiving monthly pensions in or after January two period, excluding the dependents’ pension.
thousand seventeen (2017). The Commission may (e) The monthly pension of a member who retires after
determine the grant of additional benefit reaching age sixty (60) shall be the higher of either: (1) the
allowance: Provided, That the actuarial soundness of the monthly pension computed at the earliest time he could;
reserve fund shall be guaranteed. All other additional have retired had he been separated from employment or
allowances to monthly pension subsequent to the ceased to be self-employed plus all adjustments thereto; or
Memorandum of the Executive Secretary dated February (2) the monthly pension computed at the time when he
22, 2017 shall be subject to the requirement of fund actually retires.
viability and sustainability as determined by the
Commission based on the recommendations of the Office Death Benefits
of the Chief Actuary guaranteeing the actuarial soundness Upon the death of a member who has paid at least thirty-six
of the grant of such allowances. (Sec 12) (36) monthly contributions prior to the semester of death, his
primary beneficiaries shall be entitled to the monthly
Dependents’ Pension pension: Provided, That if he has no primary beneficiaries, his
Where monthly pension is payable on account of death, secondary beneficiaries shall be entitled to a lump sum benefit
permanent total disability or retirement, dependents’ pension equivalent to thirty-six (36) times the monthly pension. If he
equivalent to ten percent (10%) of the monthly pension or Two has not paid the required thirty-six (36) monthly
hundred fifty pesos (₱250.00), whichever is higher, shall also contributions, his primary or secondary beneficiaries shall be
be paid for each dependent child conceived on or before the entitled to a lump sum benefit equivalent to the monthly
date of the contingency but not exceeding five (5), beginning pension times the number of monthly contributions paid to the
with the youngest and without substitution: Provided, That SSS or twelve (12) times the monthly pension, whichever is
where there are legitimate and illegitimate children, the former higher. (Sec 13)
shall be preferred. (Sec 12-A)
Permanent Disability Benefits
Retirement Benefit a. Upon the permanent total disability of a member who has
(a) A member who has paid at least one hundred twenty (120) paid at least thirty-six (36) monthly contributions prior to
monthly contributions prior to the semester of retirement the semester of disability, he shall be entitled to the
and who: (1) has reached the age of sixty (60) years and is monthly pension: Provided, That if he has not paid the
already separated from employment or has ceased to be required thirty-six (36) monthly contributions, he shall be
self-employed; or (2) has reached the age of sixty-five (65) entitled to a lump sum benefit equivalent to the monthly
years, shall be entitled for as long as he lives to the monthly pension times the number of monthly contributions paid
pension: Provided, That he shall have the option to receive to the SSS or twelve (12) times the monthly pension,
his first eighteen (18) monthly pensions in lump sum whichever is higher. A member who (1) has received a
discounted at a preferential rate of interest to be lump sum benefit; and (2) is reemployed or has resumed
determined by the SSS. self-employment not earlier than one (1) year from the
(b) A covered member who is sixty (60) years old at date of his disability shall again be subject to compulsory
retirement and who does not qualify for pension benefits coverage and shall be considered a new member.
under paragraph (a) above, shall be entitled to a lump sum b. The monthly pension and dependents’ pension shall be
benefit equal to the total contributions paid by him and on suspended upon the reemployment or resumption of self-
his behalf: Provided, That he is separated from employment or the recovery of the disabled member from
employment and is not continuing payment of his permanent total disability or his failure to present
contributions to the SSS on his own. himself for examination at least once a year upon notice by
(c) The monthly pension shall be suspended upon the the SSS.
reemployment or resumption of self-employment of a c. Upon the death of the permanent total disability
retired member who is less than sixty-five (65) years old. pensioner, his primary beneficiaries as of the date of

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 ATTY. JOHNSON A.H. ONG, CPA, MBA

disability shall be entitled to receive the monthly (100%), in which case, the member shall be deemed as
pension: Provided, That if he has no primary beneficiaries permanently totally disabled.
and he dies within sixty (60) months from the start of his h. In case of permanent partial disability, the monthly
monthly pension, his secondary beneficiaries shall be pension benefit shall be given in lump sum if it is payable
entitled to a lump sum benefit equivalent to the total for less than twelve (12) months.
monthly pensions corresponding to the balance of the five- i. For the purpose of adjudicating retirement, death and
year guaranteed period excluding the dependents’ permanent total disability pension benefits, contributions
pension. shall be deemed paid for the months during which the
d. The following disabilities shall be deemed permanent member received partial disability pension: Provided, That
total: such contributions shall be based on his last contribution
1. Complete loss of sight of both eyes; prior to his disability.
2. Loss of two limbs at or above the ankle or wrists; j. Should a member who is on partial disability pension
3. Permanent complete paralysis of two limbs; retire or die, his disability pension shall cease upon his
4. Brain injury resulting to incurable imbecility or retirement or death. (Sec 13-A)
insanity; and
5. Such cases as determined and approved by the SSS. Funeral Benefit
e. If the disability is permanent partial, and such disability A funeral grant equivalent to Twelve thousand pesos
occurs before thirty-six (36) monthly contributions have (₱12,000.00) shall be paid, in cash or in kind, to help defray the
been paid prior to the semester of disability, the benefit cost of funeral expenses upon the death of a member, including
shall be such percentage of the lump sum benefit described permanently totally disabled member or retiree. (Sec 13-B)
in the preceding paragraph with due regard to the degree
of disability as the Commission may determine. Sickness Benefit
f. If the disability is permanent partial and such disability a. A member who has paid at least three (3) monthly
occurs after thirty-six (36) monthly contributions have contributions in the twelve-month period immediately
been paid prior to the semester of disability, the benefit preceding the semester of sickness or injury and is
shall be the monthly pension for permanent total disability confined therefor for more than three (3) days in a hospital
payable not longer than the period designated in the or elsewhere with the approval of the SSS, shall, for each
following schedule: day of compensable confinement or a fraction thereof, be
paid by his employer, or the SSS, if such person is
Complete and permanent loss Number of Months unemployed or self-employed, a daily sickness benefit
of/use of equivalent to ninety percent (90%) of his average daily
One thumb 10 salary credit, subject to the following conditions:
One index finger 8 1. In no case shall the daily sickness benefit be paid
One middle finger 6 longer than one hundred twenty (120) days in one (1)
One ring finger 5 calendar year, nor shall any unused portion of the one
One little finger 3 hundred twenty (120) days of sickness benefit granted
One big toe 6 under this section be carried forward and added to the
One hand 39 total number of compensable days allowable in the
One arm 50 subsequent year;
2. The daily sickness benefit shall not be paid for more
One foot 31
than two hundred forty (240) days on account of the
One leg 46
same confinement; and
One ear 10
3. The employee member shall notify his employer of the
Both ears 20
fact of his sickness or injury within five (5) calendar
Hearing of one ear 10 days after the start of his confinement unless such
Hearing of both ears 50 confinement is in a hospital or the employee became
Sight of one eye 25 sick or was injured while working or within the
g. The percentage degree of disability which is equivalent to premises of the employer in which case, notification to
the ratio that the designated number of months of the employer is not necessary: Provided, That if the
compensability bears to seventy-five (75), rounded to the member is unemployed or self-employed, he shall
next higher integer, shall not be additive for distinct, directly notify the SSS of his confinement within five
separate and unrelated permanent partial disabilities, but (5) calendar days after the start thereof unless such
shall be additive for deteriorating and related permanent confinement is in a hospital in which case notification
partial disabilities, to a maximum of one hundred percent is also not necessary: Provided, further, That in cases
where notification is necessary, the confinement shall

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be deemed to have started not earlier than the fifth day full pay, regardless of whether she gave birth via caesarian
immediately preceding the date of notification. section or natural delivery, while maternity leave of sixty (60)
b. The compensable confinement shall begin on the first day days with full pay shall be granted for miscarriage or
of sickness, and the payment of such allowances shall be emergency termination of pregnancy. (Sec 5, R.A. 11210)
promptly made by the employer every regular payday or a. A female Social Security System (SSS) member who has
on the fifteenth and last day of each month, and similarly paid at least three (3) monthly contributions in the twelve
in the case of direct payment by the SSS, for as long as such (12)-month period immediately preceding the semester of
allowances are due and payable: Provided, That such her childbirth, miscarriage, or emergency termination of
allowance shall begin only after all sick leaves of absence pregnancy shall be paid her daily maternity benefit which
with full pay to the credit of the employee member shall shall be computed based on her average monthly salary
have been exhausted. credit for one hundred five (105) days, regardless of
c. One hundred percent (100%) of the daily benefits whether she gave birth via caesarian section or natural
provided in the preceding paragraph shall be reimbursed delivery, subject to the following conditions:
by the SSS to said employer upon receipt of satisfactory 1. That the female worker shall have notified her
proof of such payment and legality thereof: Provided, That employer of her pregnancy and the probable date of
the employer has notified the SSS of the confinement her childbirth, which notice shall be transmitted to the
within five (5) calendar days after receipt of the SSS in accordance with the rules and regulations it
notification from the employee member: Provided, may provide;
further, That if the notification to the SSS is made by the 2. That the full payment shall be advanced by the
employer beyond five (5) calendar days after receipt of the employer within thirty (30) days from the filing of the
notification from the employee member, said employer maternity leave application;
shall be reimbursed only for each day of confinement 3. That payment of daily maternity benefits shall be a bar
starting from the tenth calendar day immediately to the recovery of sickness benefits provided under
preceding the date of notification to the SSS: Provided, Republic Act No. 1161, as amended, for the same
finally, That the SSS shall reimburse the employer or pay period for which daily maternity benefits have been
the unemployed member only for confinement within the received;
one-year period immediately preceding the date the claim 4. That the SSS shall immediately reimburse the
for benefit or reimbursement is received by the SSS, except employer of one hundred percent (100%) of the
confinement in a hospital in which case the claim for amount of maternity benefits advanced to the female
benefit or reimbursement must be filed within one (1) year worker by the employer upon receipt of satisfactory
from the last day of confinement. and legal proof of such payment; and
d. Where the employee member has given the required 5. That if a female worker should give birth or suffer a
notification but the employer fails to notify the SSS of the miscarriage or emergency termination of pregnancy
confinement or to file the claim for reimbursement within without the required contributions having been
the period prescribed in this section resulting in the remitted for her by her employer to the SSS, or without
reduction of the benefit or denial of the claim, such the latter having been previously notified by the
employer shall have no right to recover the corresponding employer of the time of the pregnancy, the employer
daily allowance he advanced to the employee member as shall pay to the SSS damages equivalent to the benefits
required in this section. which said female member would otherwise have
e. The claim of reimbursement shall be adjudicated by the been entitled to.
SSS within a period of two (2) months from receipt In case the employee qualifies as a solo parent under Republic
thereof: Provided, That should no payment be received by Act No. 8972, or the "Solo Parents’ Welfare Act", the employee
the employer within one (1) month after the period shall be paid an additional maternity benefit of fifteen (15)
prescribed herein for adjudication, the reimbursement days.
shall thereafter earn simple interest of one percent (1%)
per month until paid. b. An additional maternity leave of thirty (30) days, without
f. The provisions regarding the notification required of the pay, can be availed of, at the option of the female worker:
member and the employer as well as the period within Provided, That the employer shall be given due notice, in
which the claim for benefit or reimbursement may be filed writing, at least forty-five (45) days before the end of her
shall apply to all claims filed with the SSS. (Sec 14) maternity leave: Provided, further, That no prior notice
shall be necessary in the event of a medical emergency but
Maternity Leave Benefit subsequent notice shall be given to the head of the agency.
Maternity Leave for Female Workers in the Private Sector c. Workers availing of the maternity leave period and
Any pregnant female worker in the private sector shall be benefits must receive their full pay. Employers from the
granted a maternity leave of one hundred five (105) days with private sector shall be responsible for payment of the

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salary differential between the actual cash benefits to the benefits which said employee member would
received from the SSS by the covered female workers and otherwise have been entitled to.
their average weekly or regular wages, for the entire
duration of the maternity leave, with the following Unemployment. Insurance or Involuntary Separation
exceptions, subject to the guidelines to be issued by the Benefits.
Department of Labor and Employment (DOLE): A member who is not over sixty (60) years of age who has paid
1. Those operating distressed establishments; at least thirty-six (36) months contributions twelve (12)
2. Those retail/service establishments and other months of which should be in the eighteen-month period
enterprises employing not more than ten (10) immediately preceding the involuntary unemployment or
workers; separation shall be paid benefits in the form of monthly cash
3. Those considered as micro-business enterprises and payments equivalent to fifty percent (50%) of the average
engaged in the production, processing, or monthly salary credit for a maximum of two (2)
manufacturing of products or commodities including months: Provided, That an employee who is involuntarily
agro-processing, trading, and services, whose total unemployed can only claim unemployment benefits once every
assets are not more than Three million pesos three (3) years: Provided, further, That in case of concurrence
(₱3,000,000.00); and of two or more compensable contingencies, only the highest
4. Those who are already providing similar or more than benefit shall be paid, subject to the rules and regulations that
the benefits herein provided. the Commission may prescribe. (Sec 14-B)
Provided, That said exemptions shall be subject to an annual
submission of a justification by the employer claiming Non-Transferability of Benefits
exemption for the approval of the DOLE. The SSS shall promptly pay the benefits provided in this Act to
such persons as may be entitled thereto in accordance with the
A female member who has paid at least three (3) monthly provisions of this Act: Provided, That the SSS shall pay the
contributions in the twelve-month period immediately retirement benefits on the day of contingency to qualified
preceding the semester of her childbirth or miscarriage shall members who have submitted the necessary documents at
be paid a daily maternity benefit equivalent to one hundred least six (6) months before: Provided, further, That the
percent (100%) of her average daily salary credit for sixty (60) beneficiary who is a national of a foreign country which does
days or seventy-eight (78) days in case of caesarian delivery, not extend benefits to a Filipino beneficiary residing in the
subject to the following conditions: Philippines, or which is not recognized by the Philippines, shall
(a) That the employee shall have notified her not be entitled to receive any benefit under this Act: Provided,
employer of her pregnancy and the probable date of further, That notwithstanding the foregoing, where the best
her childbirth, which notice shall be transmitted to the interest of the SSS will be served, the Commission may direct
SSS in accordance with the rules and regulations it payments without regard to nationality or country of
may provide; residence: Provided, further, That if the recipient is a minor or
(b) The full payment shall be advanced by the a person incapable of administering his own affairs, the
employer within thirty (30) days from the filing of the Commission shall appoint a representative under such terms
maternity leave application; and conditions as it may deem proper: Provided, further, That
(c) That payment of daily maternity benefits shall be a such appointment shall not be necessary in case the recipient
bar to the recovery of sickness benefits provided by is under the custody of or living with the parents or spouse of
this Act for the same period for which daily maternity the member in which case the benefits shall be paid to such
benefits have been received; parents or spouse, as representative payee of the recipient.
(d) That the maternity benefits provided under this Such benefits are not transferable and no power of attorney or
section shall be paid only for the first four (4) other document executed by those entitled thereto in favor of
deliveries or miscarriages; any agent, attorney or any other person for the collection
(e) That the SSS shall immediately reimburse the thereof on their behalf shall be recognized, except when they
employer of one hundred percent (100%) of the are physically unable to collect personally such
amount of maternity benefits advanced to the benefits: Provided, further That in case of death benefits, if no
employee by the employer upon receipt of satisfactory beneficiary qualifies under this Act, said benefits shall be paid
proof of such payment and legality thereof; and to the legal heirs in accordance with the law of succession. (Sec
(f) That if an employee member should give birth or 15)
suffer miscarriage without the required contributions
having been remitted for her by her employer to the Exemption from Tax, Legal Process and Lien
SSS, or without the latter having been previously All laws to the contrary notwithstanding, the SSS and all its
notified by the employer of the time of the pregnancy, assets and properties, all contributions collected and all
the employer shall pay to the SSS damages equivalent accruals thereto and income or investment earnings therefrom

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 ATTY. JOHNSON A.H. ONG, CPA, MBA

as well as all supplies, equipment, papers or documents shall this Act. Notwithstanding any contract to the contrary, an
be exempt from any tax, assessment, fee, charge, or customs or employer shall not deduct, directly or indirectly, from the
import duty; and all benefit payments made by the SSS shall compensation of his employees covered by the SSS or
likewise be exempt from all kinds of taxes, fees or charges, and otherwise recover from them the employer’s contributions
shall not be liable to attachments, garnishments, levy or seizure with respect to such employees.
by or under any legal or equitable process whatsoever, either b. The remittance of such contributions by the employer shall
before or after receipt by the person or persons entitled be supported by a quarterly collection list to be submitted
thereto, except to pay any debt of the member to the SSS. No to the SSS at the end of each calendar quarter indicating
tax measure of whatever nature enacted shall apply to the SSS, the correct ID number of the employer, the correct names
unless it expressly revokes the declared policy of the State in and the SSS numbers of the employees and the total
Section 2 hereof granting tax-exemption to the SSS. Any tax contributions paid for their account during the quarter.
assessment imposed against the SSS shall be null and void. (Sec (Sec 19)
16)
Contributions of the Self-Employed Member
Fee of Agents, Attorneys, Etc The contributions to the SSS of the self-employed member shall
No agent, attorney or other person in charge of the preparation, be determined in accordance with the schedule provided in
filing or pursuing any claim for benefit under this Act shall this Act: Provided, That the monthly earnings declared by the
demand or charge for his services any fee, and any stipulation self-employed member at the time of his registration with the
to the contrary shall be null and void. The retention or SSS shall be considered as his monthly compensation and he
deduction of any amount from any benefit granted under this shall pay both the employer and the employee
Act for the payment of fees for such services is contributions: Provided, further, That the contributions of self-
prohibited: Provided, however, That any member of the employed persons earning One thousand pesos (₱1,000.00)
Philippine Bar who appears as counsel in any case heard by the monthly or below may be reduced by the Commission.
Commission shall be entitled to attorney‘s fees not exceeding The monthly earnings declared by the self-employed member
ten percent (10%) of the benefits awarded by the Commission, at the time of his registration shall remain the basis of his
which fees shall not be payable before the actual payment of monthly salary credit, unless he makes another declaration of
the benefits, and any stipulation to the contrary shall be null his monthly earnings, in which case such latest declaration
and void.
Any violation of the provisions of this Section shall be punished Remittance of Contributions
by a fine of not less than Five hundred pesos (₱500.00) nor a. The contribution imposed in the preceding section shall be
more than Five thousand pesos (₱5,000.00). or imprisonment remitted to the SSS within the first ten (10) days of each
for not less than six (6) months nor more than one (1) year, or calendar month following the month for which they are
both, at the discretion of the court. (Sec 17) applicable or within such time as the Commission may
prescribe. Every employer required to deduct and to remit
Employee’s Contributions such contributions shall be liable for their payment and if
Beginning on the last day of the calendar month when an any contribution is not paid to the SSS as herein
employee’s compulsory coverage takes effect and every month prescribed, the delinquent employer shall pay besides the
thereafter during his employment, the employer shall deduct contribution a penalty thereon of two percent (2%) per
and withhold from such employee’s monthly salary, wage, month from the date the contribution falls due until paid.
compensation or earnings, the employee’s contribution in an If deemed expedient and advisable by the Commission, the
amount corresponding to his salary, wage, compensation or collection and remittance of contributions shall be made
earnings during the month in accordance with the monthly quarterly or semi-annually in advance, the contributions
salary credits, the schedule and the rate of contributions as payable by the employees to be advanced by their
may be determined and fixed by the Commission, subject to the respective employers: Provided, That upon separation of
provisions of Section 4(a)(9) of this Act. an employee, any contribution so paid in advance but not
The monthly salary credits, the schedule and the rate of due shall be credited or refunded to his employer.
contributions shall also apply to self-employed, voluntary, and b. The contributions payable under this Act in cases where an
other members. (Sec 18) employer refuses or neglects to pay the same shall be
collected by the SSS in the same manner as taxes are made
Employer’s Contributions collectible under the National Internal Revenue Code, as
a. Beginning on the last day of the month when an employee’s amended. Failure or refusal of the employer to pay or remit
compulsory coverage takes effect and every month the contributions herein prescribed shall not prejudice the
thereafter during his employment, his employer shall pay, right of the covered employee to the benefits of the
with respect to such covered employee, the employer’s coverage.
contribution in accordance with the schedule provided in

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 ATTY. JOHNSON A.H. ONG, CPA, MBA

The right to institute the necessary action against the entitled had his name been reported on time by the
employer may be commenced within twenty (20) years employer to the SSS, except that in case of pension benefits,
from the time the delinquency is known or the assessment the employer shall be liable to pay the SSS damages
is made by the SSS, or from the time the benefit accrues, as equivalent to the accumulated pension due as of the date
the ease may be. of settlement of the claim or to the five (5) years’ pension,
c. Should any person, natural or juridical, defaults in any whichever is higher, including dependents’
payment of contributions, the Commission may also collect pension: Provided, further, That if the contingency occurs
the same in either of the following ways: within thirty (30) days from the date of employment, the
1. By an action in court, which shall hear and dispose of employer shall be relieved of his liability for
the case in preference to any other civil action; or damages: Provided, further, That any person or entity
2. By issuing a warrant to the Sheriff of any province or engaging the services of an independent contractor shall
city commanding him to levy upon and sell any real be subsidiarily liable with such contractor for any civil
and personal property of the debtor. The Sheriffs sale liability incurred by the latter under this Act: Provided,
by virtue of said warrant shall be governed by the finally, That the same person or entity engaging the
same procedure prescribed for executions against services of an independent contractor shall require such
property upon judgments by a court of record. contractor to post a surety bond to guarantee the payment
d. The last complete record of monthly contributions paid by of the worker’s benefits.
the employer or the average of the monthly contributions b. Should the employer misrepresent the true date of
paid during the past three (3) years as of the date of filing employment of the employee member or remit to the SSS
of the action for collection shall be presumed to be the contributions which are less than those required in this Act
monthly contributions payable by and due from the or fail to remit any contribution due prior to the date of
employer to the SSS for each of the unpaid month, unless contingency, resulting in a reduction of benefits, such
contradicted and overcome by other employer shall pay to the SSS damages equivalent to the
evidence: Provided, That the SSS shall not be barred from difference between the amount of benefit to which the
determining and collecting the true and correct employee member or his beneficiary is entitled had the
contributions due the SSS even after full payment pursuant proper contributions been remitted to the SSS and the
to this paragraph, nor shall the employer be relieved of his amount payable on the basis of contributions actually
liability under Section Twenty-eight of this Act. (Sec 22) remitted: Provided, That if the employee member or his
beneficiary is entitled to pension benefits, the damages
Remittance of Contributions of Self-Employed Member shall be equivalent to the accumulated pension due as of
Self-employed members shall remit their monthly the date of settlement of the claim or to the five (5) years’
contributions quarterly on such dates and schedules as the pension, whichever is higher, including dependents’
Commission may specify through rules and pension.
regulations: Provided, That no retroactive payment of In addition to the liability mentioned in the preceding
contributions shall be allowed, except as provided in this paragraphs (a) and (b) hereof, the employer shall also
Section. (Sec 22-A) be liable for the payment of the corresponding
unremitted contributions and penalties thereon.
Method of Collection and. Payment c. The records and reports duly accomplished and submitted
The SSS shall require a complete and proper collection and to the SSS by the employer or the member, as the case may
payment of contributions and proper identification of the be, shall be kept confidential by the SSS except in
employer and the employee. Payment may be made in cash, compliance with a subpoena duces tecum issued by the
checks, stamps, coupons, tickets, or other reasonable devices courts, shall not be divulged without the consent of the SSS
that the Commission may adopt. (Sec 23) President or any official of the SSS duly authorized by him,
shall be presumed correct as to the data and other matters
Employment Records and Reports stated therein, unless the necessary corrections to such
a. Each employer shall immediately report to the SSS the records and reports have been properly made by the
names, ages, civil status, occupations, salaries and parties concerned before the right to the benefit being
dependents of all his employees who are subject to claimed accrues, and shall be made the basis for the
compulsory coverage: Provided, That if an employee adjudication of the claim. If as a result of such adjudication
subject to compulsory coverage should die or become sick the SSS in good faith pays a monthly pension to a
or disabled or reach the age of sixty (60) without the SSS beneficiary who is inferior in right to another beneficiary
having previously received any report or written or with whom another beneficiary is entitled to share, such
communication about him from his employer, the said payments shall discharge the SSS from liability unless and
employer shall pay to the SSS damages equivalent to the until such other beneficiary notifies the SSS of his claim
benefits to which said employee member would have been prior to the payments.

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 ATTY. JOHNSON A.H. ONG, CPA, MBA

d. Every employer shall keep true and accurate work records compensation paid or received or whoever makes or
for such period and containing such information as the causes to be made any false statement of a material fact in
Commission may prescribe, in addition to an "Annual any claim for any benefit payable under this Act, or
Register of New and Separated Employees" which shall be application for loan with the SSS. or whoever makes or
secured from the SSS wherein the employer shall enter on causes to be made any false statement, representation,
the first day of employment or on the effective date of affidavit or document in connection with such claim or
separation, the names of the persons employed or loan, shall suffer the penalties provided for in Article One
separated from employment, their SSS numbers, and such hundred seventy-two of the Revised Penal Code.
other data that the Commission may require and said b. Whoever shall obtain or receive any money or check under
annual register shall be submitted to the SSS in the month this Act or any agreement thereunder, without being
of January of each year. Such records shall be open for entitled thereto with intent to defraud any member,
inspection by the SSS or its authorized representatives employer or the SSS, shall be fined not less than Five
quarterly or as often as the SSS may require. thousand pesos (₱5,000.00) nor more than Twenty
The SSS may also require each employer to submit, with thousand pesos (₱20,000.00) and imprisoned for not less
respect to the persons in his employ, reports needed for than six (6) years and one (1) day nor more than twelve
the effective administration of this Act. (12) years.
e. Each employer shall require, as a condition to c. Whoever buys, sells, offers for sale, uses, transfers or takes
employment, the presentation of a registration number or gives in exchange, or pledges or gives in pledge, except
secured by the prospective employee from the SSS in as authorized in this Act or in regulations made pursuant
accordance with such procedure as the SSS may thereto, any stamp, coupon, ticket, book or other device,
adopt: Provided, That in case of employees who have prescribed pursuant to Section Twenty-three hereof by the
earlier been assigned registration numbers by virtue of a Commission for the collection or payment of contributions
previous employment, such numbers originally assigned required herein, shall be fined not less than Five thousand
to them should be used for purposes of this pesos (₱5,000.00) nor more than Twenty thousand pesos
Section: Provided, further, That/ the issuance of such (₱20,000.00), or imprisoned for not less than six (6) years
registration numbers by the SSS shall not exempt the and one (1) day nor more than twelve (12) years, or both,
employer from complying with the provisions of at the discretion of the court.
paragraph (a) of this Section. d. Whoever, with intent to defraud, alters, forges, makes or
f. Notwithstanding any law to the contrary, microfilm, or counterfeits any stamp, coupon, ticket, book or other
non-erasable optical disk and other similar archival media device prescribed by the Commission for the collection or
copies of original SSS records and reports, or copies of such payment of any contribution required herein, or uses, sells,
records and reports duly certified by the official custodian lends, or has in his possession any such altered, forged or
thereof, shall have the same evidentiary value as the counterfeited materials, or makes, uses, sells or has in his
originals and be admissible as evidence in all legal possession any such altered, forged, material in imitation
proceedings. of the material used in the manufacture of such stamp,
g. Notwithstanding any law to the contrary, local government coupon, ticket, book or other device, shall be fined not less
units shall, prior to issuing any annual business license or than Five thousand pesos (₱5,000.00) nor more than
permit, require submission of certificate of SSS coverage Twenty thousand pesos (₱20,000.00) or imprisoned for
and compliance with the provisions of this not less than six (6) years and one (1) day nor more than
Act: Provided, That the certification or clearance shall be twelve (12) years, or both, at the discretion of the court.
issued by the SSS within five (5) working days from receipt e. Whoever fails or refuses to comply with the provisions of
of the request. (Sec 24) this Act or with the rules and regulations promulgated by
the Commission, shall be punished by a fine of not less than
Report and. Registration of the Self-Employed Member Five thousand pesos (₱5,000.00) nor more than Twenty
Each covered self-employed member shall, within thirty (30) thousand pesos (₱20,000.00), or imprisonment for not less
days from the first day he started the practice of his profession than six (6) years and one (1) day nor more than twelve
or business operations, register and report to the SSS his name, (12) years, or both, at the discretion of the
age, civil status, and occupation, average monthly net income court: Provided, That where the violation consists in
and his dependents. (Sec 24-A) failure or refusal to register employees or himself, in case
of the covered self-employed or to deduct contributions
Penal Clause from the employees’ compensation and remit the same to
a. Whoever, for the purpose of causing any payment to be the SSS, the penalty shall be a fine of not less than Five
made under this Act. or under an agreement thereunder, thousand pesos (₱5,000.00) nor more than Twenty
where none is authorized to be paid, shall make or cause thousand pesos (₱20,000.00) and imprisonment for not
to be made false statement or representation as to any

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 ATTY. JOHNSON A.H. ONG, CPA, MBA

less than six (6) years and one (1) day nor more than
twelve (12) years.
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 for the penalties provided in this Act for the
offense.
g. Any employee of the SSS who receives or keeps funds or
property belonging, payable or deliverable to the SSS 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 Article Two hundred
seventeen of the Revised Penal Code.
h. Any employer who, after deducting the monthly
contributions or loan amortizations from his employee’s
compensation, fails to remit the said deduction to the SSS
within thirty (30) 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 Article Three hundred fifteen of the
Revised Penal Code.
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 office is located, if the violation
was committed within its territorial jurisdiction or in
Metro Manila, at the option of the SSS. (Sec 28)

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