Social Security System

Policy

Effectivity

May 24, 1997

Vision

A viable social security institution providing universal and equitable social protection through world-class
service.

Overview

The concept of social security evolved from an age-old search of man for protection against
poverty.

a social insurance program for employees in the Philippines.

Founded in 1957, the SSS is a government agency that provides retirement and health benefits to
all paid up employees in the Philippines.

Legislative History

On Jan. 26, 1948, Pres. Manuel A. Roxas proposed a bill seeking to establish a social security
system for wage earners and low-salaried employees.

Pres. Elpidio Quirino created the Social Security Study Commission on July 7, 1948.

On May 1, 1997, Pres. Fidel V. Ramos signed RA 8282, further strengthening the SSS. Also
known as the Social Security Act of 1997

Social Security provides replacement income for workers in times of death, disability, sickness,
maternity and old age.

Programs

Member Loans

Business Loans

Housing Loan

Member Loans

Salary Loan
 A cash loan granted to an employed, currently- paying self-employed or voluntary member. It is
intended to meet the member's short-term credit needs.

Business Loans

SSS is a reliable partner in the government's economic stabilization program through SSS' massive
purchases of T-notes and T-bills. By investing heavily in government securities, SSS indirectly supports
the government construction of roads, bridges, irrigation networks, dams, and other infrastructure
necessary for the growing economy.

Business Development Loan Facility

Social Development Loan Facility

Fixed-Term Credit Facility

ASENSO Program (Access of Small Enterprises to Sound Lending Opportunities

Housing Loans

Direct Housing Loan Facility for Workers' Organization Members

Direct Housing Loan Facility for OFWs

House Repair/Improvement Loan

Assumption of Mortgage

Compulsory Coverage

Coverage of Employees

Coverage of Self-Employed Persons

A self-employed person, regardless of trade, business or occupation, with an income of at least P1,000 a
month and not over 60 years old, should register with the SSS.

RP v. Asiapro Cooperative

Although the aforesaid provision speaks merely of claims for Social Security, it would necessarily include
issues on the coverage thereof, because claims are undeniably rooted in the coverage by the system.

All elements of E-E Relationship are present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent cooperative which has the
exclusive discretion in the selection and engagement of the owners-members as well as its team leaders
who will be assigned at Stanfilco.

Second. The weekly stipends or the so-called shares in the service surplus given by the respondent
cooperative to its owners-members were in reality wages, as the same were equivalent to an amount not
lower than that prescribed by existing labor laws, rules and regulations, including the wage order
applicable to the area and industry; or the same shall not be lower than the prevailing rates of wages

Third. It is also stated in the above-mentioned Service Contracts that it is the respondent cooperative
which has the power to investigate, discipline and remove the owners-members and its team leaders who
were rendering services at Stanfilco.

Fourth. It is the respondent cooperative which has the sole control over the manner and means of
performing the services under the Service Contracts with Stanfilco as well as the means and methods of
work. Also, the respondent cooperative is solely and entirely responsible for its owners-members, team
leaders and other representatives at Stanfilco.

SSS v. CA

Whether or not an agricultural laborer who was hired on "pakyaw" basis can be considered an employee
entitled to compulsory coverage and corresponding benefits under the Social Security Law.

SC:

There was no shred of evidence to show that Tana was only a seasonal worker. All witnesses, including
Ayalde, testified that Tana and his family resided in the plantation. The only logical explanation for this
set up was that Tana was working for most part of the year exclusively for Ayalde. A closer scrutiny of
the records revealed that while Ayalde may not have directly imposed on Tana the manner and methods
to follow in performing his tasks, she did exercise control through her overseer. Under the circumstances,
the relationship between Ayalde and Tana has more of the attributes of employer-employee than that of
an independent contractor hired to perform a specific project.

Lazaro v. SSC

Is a sales supervisor of a company engaged in the sale of home appliances an employee of such
company?

SSC, as upheld by the Court of Appeals, found that Laudato was a sales supervisor and not a mere agent.
As such, Laudato oversaw and supervised the sales agents of the company, and thus was subject to the
control of management as to how she implements its policies and its end results. SC disinclined to reverse
this finding, in the absence of countervailing evidence from Lazaro and also in light of the fact that
Laudato's calling cards from Royal Star indicate that she is indeed a sales supervisor.

SSC v. Alba

Whether an administrator could be considered an employer? Yes.

Far Alba was no ordinary administrator. He was no less than the son of the hacienda's owner and as such
he was an owner-in-waiting prior to his father's death.

Lamboso testified that he was selected and his services were engaged by Far Alba himself. Corollarily,
Far Alba held the prerogative of terminating Lamboso's employment. Lamboso also testified in a direct
manner that he had been paid his wages by Far Alba. This testimony was seconded by Lamboso's co-
worker.

Not to be forgotten is the definition of an employer under Article 167 (f) of the Labor Code which deals
with employees' compensation and state insurance fund. It defines a person as "any individual,
partnership, firm, association, trust, corporation or legal representative thereof". Plainly, Far Alba, as the
hacienda administrator, acts as the legal representative of the employer and is thus an employer within the
meaning of the law liable to pay the SS contributions.

Voluntary Coverage

Coverage of Separated Members

A member who is separated from employment or ceased to be self-employed/OFW/non-working

spouse and would like to continue paying his/her contributions.

Coverage of Overseas Filipino Workers (OFWs)

A Filipino recruited in the Philippines by a foreign-based employer for employment abroad;

having a source of income in the foreign country; and permanent resident in a foreign country.

Coverage of non-working Spouse of SSS Members

Effectivity of coverage

Compulsory coverage

1. For an employee on the first day of employment

2. For an employer on the first day the employer hires employee/s.

Employer is given 30 days from date of employment to report the employee for coverage to SSS.

3. For self-employed upon payment of first valid contribution, in case of initial coverage.

Voluntary coverage

1. For OFW upon first payment of contribution, in case of initial coverage.

2. For non-working spouse upon first payment of contribution.

3. For separated member on the month the person resumed payment of contribution.
Legal Dependents of Member

The legal beneficiaries of a member are:

Legally married dependent spouse until he or she remarries;

Dependent legitimate, legitimated or legally adopted and illegitimate children.

These two are primary beneficiaries.

If single, benefits will go to dependent parents who are considered secondary beneficiaries.

In absence of both primary and secondary, any other person designated by member.

Dependents

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

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

(3) The parent who is receiving regular support from the member

SSS v. Bailon

That the SSC is empowered to settle any dispute with respect to SSS coverage, benefits and contributions,
there is no doubt. In so exercising such power, however, it cannot review, much less reverse, decisions
rendered by courts of law as it did in the case at bar when it declared that the December 10, 1970 CFI
Order was obtained through fraud and subsequently disregarded the same, making its own findings with
respect to the validity of Bailon and Alice's marriage on the one hand and the invalidity of Bailon and
respondent's marriage on the other.

In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law
does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its
authority to determine the beneficiaries of the SSS.

In the case at bar, as no step was taken to nullify, in accordance with law, Bailon's and respondent's
marriage prior to the former's death in 1998, respondent is rightfully the dependent spouse-beneficiary of
Bailon.
Employment services excluded

1. Purely casual employment and not for the purpose of occupation or business of the employer

2. Services performed or in connection with an alien vessel by an employee if he/she is employed

when such vessel is outside the Philippines

3. Services performed in the employ of the Philippine government

4. Service performed in the employ of a foreign government or international organization, or their

wholly-owned instrumentality unless there is an agreement with the Philippine Government for
the inclusion of such employees in the SSS

5. Such other temporary services performed by temporary employees which may be excluded by
regulation. Employees of bona fide independent contractors shall not be deemed employees of the
employer engaging the service of said contractors.

Duties of employee-members

SS Number

The SS number assigned to a member is the lifetime number and must always be used in all transactions
with the SSS. The member should not secure another number at any other time.

Contributions

SSS 10.4% of the monthly salary credit not exceeding P15,000 and payable by both employer (7.07%)
and employee (3.33%) effective Jan. 1, 2007.

EC Starting Jan. 1, 2007, P10 for a monthly salary credit of P14,500 and below and P30 for employees
with an MSC of P15,000 and payable only by employer.

Benefits under social security program

Covered employees are entitled to a package of benefits under social security and EC in the event
of death, disability, sickness, maternity, and old-age

Self-employed and voluntary members also get same benefits except those benefits under the EC
program

Sickness benefit

A daily cash allowance paid for the number of days a member is unable to work due to sickness
or injury. The amount is equivalent to 90% of the members average daily salary credit.

Requirements:

Maternity Benefit
 It is a daily cash allowance granted to female member who was unable to work due to childbirth
or miscarriage.

It is equivalent to 100% of members average daily salary credit multiplied by 60 days for normal
delivery pr miscarriage, 78 days for caesarian section delivery.

Qualifications for entitlement:

Deliveries covered:

Only for the first four deliveries or miscarriages shall be paid starting May 24, 1997 (effectivity of RA
8282)

Notice required:

As soon as pregnancy is confirmed.

Disability Benefit

Disability any restriction or lack (lack from impairment) of ability to perform an activity in the manner
or within the range considered normal for a human being.

Impairment any loss or abnormality of psychological, physiological, or anatomical structure or

function.

Who is qualified?

Some partial permanent disabilities:

Some total permanent disabilities:

Ortega v. SSC

Claims under the Labor Code for compensation and under the Social Security Law for benefits are not the
same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code govern
compensability of work-related disabilities or when there is loss of income due to work-connected or
work-aggravated injury or illness.

And unlike under the Social Security Law, a disability is total and permanent under the Labor Code if as a
result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous
period exceeding 120 days regardless of whether he loses the use of any of his body parts.

Types of disability benefits:

Monthly pension cash benefit paid to a disabled member who has paid at least 36 monthly
contributions to the SSS prior to the semester of disability.
 In addition to monthly pension, supplemental allowance of P500 is paid to the total or partial
disability pensioner.

Lump sum amount granted to those who have not paid the required 36 monthly contributions.

Is monthly pension for life?

Prescriptive period in filing a disability claim:

Retirement Benefit

Who may qualify?

Dycaico v. SSS

SSC opined that under Section 12-B(d) of Rep. Act No. 8282, the primary beneficiaries who are entitled
to survivor's pension are those who qualify as such as of the date of retirement of the deceased member.
Hence, the petitioner, who was not then the legitimate spouse of Bonifacio as of the date of his retirement,
could not be considered his primary beneficiary.

SC:

The proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282, which
qualifies the term "primary beneficiaries," is unconstitutional for it violates the due process and equal
protection clauses of the Constitution.

For Underground Mineworkers:

Types of retirement benefits:

1. Monthly pension

2. Lump sum amount

Death Benefit

It is a cash benefit either in monthly pension or lump sum paid to the beneficiaries of a deceased
member.

Types of death benefit:

1. Monthly pension

2. Lump sum amount

Beneficiaries:

Signey v. SSS

Who is entitled to the social security benefits of a Social Security System (SSS) member who was
survived not only by his legal wife, but also by two common-law wives with whom he had six children?

Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by
substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no
legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled
to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a
"dependent, the only requirements are that he/she must be below 21 years of age, not married nor
gainfully employed.

SSS v. De Los Santos

The obvious conclusion then is that a wife who is already separated de facto from her husband cannot be
said to be "dependent for support" upon the husband, absent any showing to the contrary. Conversely, if it
is proved that the husband and wife were still living together at the time of his death, it would be safe to
presume that she was dependent on the husband for support, unless it is shown that she is capable of
providing for herself.

If deceased member is survived by legitimate, legitimated or legally adopted and illegitimate

children, how is monthly pension to be divided?

For how long will the dependent child receive the pension?

Right to Institute

Sec. 22 - The right to institute the necessary action against the employer may be commenced within
twenty (20) 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.

Lo v. CA

SC:

Supreme Court dismissed the petition, and affirmed the decision of the Court of Appeals. Section 22 (b),
par. 2, of Republic Act No. 1161, or the SSS Law, expressly provides that 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. The provision is clear that the period of prescription commences to run only upon the
discovery of the violation, which took place in 1985. When the complaint was filed on August 14, 1985,
less than one year had passed since private respondent discovered the delinquency. Therefore, the claim
was timely instituted.

Penal Clause

Who are liable and what are the penalties.

Who can file?

Garcia v. SSC

SSC found Garcia, the sole surviving director of Impact Corporation, petitioner herein, liable for
unremitted SSS contributions.

Issue is whether or not petitioner, as the only surviving director of Impact Corporation, can be made
solely liable for the corporate obligations of Impact Corporation pertaining to unremitted SSS premium
contributions and penalties therefore.

Although a corporation once formed is conferred a juridical personality separate and distinct from the
persons comprising it, it is but a legal fiction introduced for purposes of convenience and to subserve the
ends of justice. The concept cannot be extended to a point beyond its reasons and policy, and when
invoked in support of an end subversive of this policy, will be disregarded by the courts.

Tan v. Ballena

In answer to criminal complaint for violation of SS law, petitioners interposed the defenses of lack of
criminal intent and good faith as their failure to remit was brought about by alleged economic difficulties,
and they have already agreed to settle their obligations with the SSS through a memorandum of
agreement to pay in installments.

SC:

As held by the Court of Appeals, the claims of good faith and absence of criminal intent for the
petitioners' acknowledged non-remittance of the respondents' contributions deserve scant consideration.
The violations charged in this case pertain to the SSS Law, which is a special law. As such, it belongs to a
class of offenses known as mala prohibita.

Social Security Commission

SSS v. Atlantic Gulf

Which body has jurisdiction to entertain a controversy arising from the non-implementation of a
dacion en pago agreed upon by the parties as a means of settlement of private respondents' liabilities?

How to Apply

Settlement of Disputes