THE SOCIAL SECURITY LAW

Development of the Law

RA 1161 (Social Security Act of 1954) has undergone several amendments:
RA 1792: deleted provisions of unemployment benefits
RA 2658: coverage was broadened
RA 3839: retirement benefits were increased & minimum age requirement for coverage was
removed
RA 4482: reimbursable amount of sickness benefits was increased
Several other laws increasing the amount of social security benefits were promulgated
RA 8282: approved on May 1, 1997

Rationale behind enactment

Policy of the State: To establish, develop, promote and perfect a sound and viable taxexempt social security service:
suitable to the needs of the people
promote social justice
provide meaningful protection to members and their beneficiaries against:
hazards of disability
sickness
maternity
old age
death
other contingencies resulting in loss of income or financial burden
SOCIAL SECURITY SYSTEM
directed and controlled by a Social Security Commission:
Secretary of Labor and Employment or his duly designated undersecretary
SSS president (CEO)
Seven appointive members [Term: 3 years]
three from the workers' group (at least one of whom shall be a woman)
three from the employers' group (at least one of whom shall be a woman)
one from the general public (must have adequate knowledge and experience
regarding social security)
POWERS & DUTIES OF THE SOCIAL SECURITY COMMISSION
adopt rules and regulations necessary to carry out the SSS Law
establish and maintain a provident fund for the members which will consist of the
contributions
approve restructuring proposals for the payment of due but unremitted contributions
submit annually not later than April 30, a public report to the President of the Philippines and
to the Congress of the Philippines covering its activities during the preceding year
establish offices of the SSS to cover as many areas
sue and be sued in court
SOCIAL SECURITY LAW
Legitimate exercise of police power: promotion of social justice to insure the well-being and
economic security of all the people
Must be liberally construed in favor of those seeking its benefits
Not a law on succession (the designated beneficiaries, not the heirs of the employee, are to
receive the social security benefits)
Not part of the taxation system
Funds of the SSS are private funds

ROMAN CATHOLIC ARCHBISHOP OF MANILA VS. SSS

1961)

G.R. NO. L-15045 (JANUARY 20,

FACTS: The Roman Catholic Archbishop of Manila filed with the Social Security Commission a request
that Catholic charities and all religious and charitable institutions and organizations be exempted
from compulsory coverage of SSS.
ISSUE: Whether the inclusion of religious organizations under the coverage of the SSS violates the
constitutional prohibition against the application of public funds for the use, benefit or support of any
priest who may be employed by the Church
RULING: NO. The funds contributed to the Social Security System are not public funds. The funds
belong to the members and are merely held in trust by the Government
COMPULSORY COVERAGE
a) All employers engaged in business in the Philippines, including religious, charitable or nonprofit institutions
b) All employees not over 60 years of age
c) Domestic helpers receiving at least Php 1,000/month
d) Aliens employed in the Philippines
e) Self-employed persons
f) Self-employed professionals
g) Partners and single proprietors of businesses
h) Actors, actresses, directors, scriptwriters, and news correspondents
i) Professional athletes, coaches, trainers and jockeys
j) Individual farmers and fishermen
VOLUNTARY COVERAGE
Spouses who devote full time to managing the household and family affairs
Filipinos recruited for overseas employment by foreign-based employers
EFFECTIVE DATE OF COVERAGE
For employers on the 1st day of operation
For employees on the 1st day of his employment
For the self-employed upon his registration with the SSS
Employees not covered by the SSS Law
Purely casual employees
Employees serving on an alien vessel, when such vessel is outside of the Philippines
Employees of the Philippine government
Employees of foreign government, international organization, and their wholly-owned
instrumentality
Temporary employees, if excluded by regulation of the SSC
Obligations of Employer
a) To make a timely report of its employees for coverage
b) To make timely remittance of premiums (within the first 7 days of the month)
Effect of non-reporting and non-remittance of contributions:
Employee : still entitled to social security benefits
Employer: must pay all unpaid contributions plus a penalty of 3% three percent per month;
and liable for a criminal offense punishable by fine and/or imprisonment
MENDOZA VS. PEOPLE OF THE PHILIPPINES

G.R. NO. 183891 (AUGUST 3, 2010)

FACTS: Mendoza, president of Summa Alta Tierra Industries, Inc. (SATII), failed to remit the monthly
premium contributions of his employees. He requested for several extensions of time to settle the
amount due but he failed to remit the said amount. He sought to exculpate himself by claiming good
faith and explaining that during the period of non-remittance, SATII shut down due to the general

decline in the economy. He claimed that he is merely a conduit of SATII and, therefore, should not be
held personally liable for its liabilities.
ISSUE: Whether Mendoza, as president of SATII, should be liable for failure to remit the monthly
premium contributions of his employees despite his good faith
RULING: YES. Mendoza, as president of SATII, is the managing head who is liable for the act or
omission penalized under the Social Security Act.
The Social Security Act is a special law (malum prohibutum) and the penalty for failure to
remit premium contribution is punitive in character, hence, lack of criminal intent or good
faith is not a defense.
From the moment the remittance of premiums due is delayed, the penalty immediately
attaches to the delayed premium payments by force of law.
DUE DATES OF CONTRIBUTIONS

OFWs: Payment of contributions for the months of January to December of a given year may be paid
within the same year; contributions for the months of October to December of a given year may also
be paid on or before the 31st of January of the succeeding year.
FOR EMPLOYED MEMBERS
It is important that you are aware of the payment deadlines for contributions and member
loans in order to avoid incurring penalties. If you are an employee-member, your employer must pay
your contributions and member loans monthly in accordance with the prescribed schedule of
payment which is according to the 10th digit of the Employer's ID Number. Late payments will result
to penalties and delays in the processing of your benefits and loans.
The frequency of payment is on a monthly basis for business and household employers.
FOR SELF-EMPLOYED AND VOLUNTARY MEMBERS
If you are a self-employed or a voluntary member, the prescribed schedule of payment is also
being followed, (depending on the 10th (last digit) of the SE/VM SS number). However, the frequency
of contribution payments for self-employed or a voluntary member can be on a monthly or quarterly
basis. A quarter covers three (3) consecutive calendar months ending on the last day of March, June,
September and December. Any payment for one, two or all months for a calendar quarter may be
made.
Securing an SSS number does not automatically make a person an SSS member. He is
considered a member when he:
has been reported for SSS coverage
has paid at least 1 month contribution
Social Security Law requires the presentation of SSS number as a condition for employment.
A member cannot withdraw membership with the SSS (when a person registers and is
covered for SSS membership, he/she becomes a member for life)
Effect of separation from employment:

 Employer's obligation to pay SSS contributions ceases at the end of the month of separation
Effect of Interruption of Business or Professional Income:
No income in any given month: Not required to pay contributions for that month
No retroactive payment is allowed

SOCIAL SECURITY BENEFITS

Maternity leave benefit

Sickness benefit
Permanent disability benefits
Retirement benefits
Death benefits
Funeral benefit

TYPE OF BENEFIT

QUALIFYING CONDITIONS

AMOUNT OF BENEFIT

MATERNITY
A daily cash allowance
granted to a female
member who is unable to
work due to childbirth or
miscarriage

At least 3 months of
contributions within the 12month period immediately
before the semester of her
childbirth or miscarriage;
Procedure:
- Employee should notify
employer of her pregnancy &
probable date of childbirth
- Employer shall advance
payment within 30 days
from filing of maternity
leave application
- SSS shall reimburse the
employer the amount paid

Average daily salary

credit
x
60 days
(normal delivery or
miscarriage)
Average daily salary
credit
x
78 days
(caesarian section delivery)
- Granted up to the first
4 deliveries or
miscarriages only.

SICKNESS
A daily cash allowance
paid for the number of
days a member is unable
to work due to sickness or
injury

Confined either in a
hospital or at home for
at least 4 days;
- Has paid at least 3
monthly contributions in
the 12-month period
immediately preceding
the semester of
sickness;
- Has exhausted the
company sick leave
with pay
Procedure:
Employee must notify
employer within 5 days
after the start of
confinement
-

90% of his/her average daily

salary credit
- Granted up to a
maximum of 120 days
in one calendar year
- Cannot be paid for
more than 240 days
on account of the
same confinement
- Unused portion of the 120
cannot be carried forward to
subsequent year

Employer shall advance

sickness allowances
SSS shall reimburse the
amount paid by the employer
-

PERMANENT TOTAL
DISABILITY
A cash benefit granted
either as a monthly
pension or a lump sum
amount to a member
who becomes permanently
disabled

PERMANENT PARTIAL
DISABILITY

disablement to do the
same or similar kind of
work that the SSS
member was trained
for and accustomed to
perform because of:
(a) Complete loss of sight of
both eyes
(b) Loss of 2 limbs at or above
the ankle or wrists
(c) Permanent or complete
paralysis of two limbs
(d) Brain injury resulting in
incurable imbecility or insanity
(e) Such cases as determined
and approved by the SSS
-

Employee is unable to continue

with his former work because
of complete and permanent
loss of use of the following the
anatomical parts provided by
law

RETIREMENT

Monthly pension - at least

36 monthly contributions
prior to the semester of
disability
Lump sum benefit - less
than 36 monthly
contributions
Monthly Pension
x
Number of Monthly
Contributions Paid
or
12 x Monthly Pension
(whichever is higher)

Percentage of the lump

sum benefit if disability
occurs before 36
contributions have been paid
prior to the semester of
disability
Monthly pension if the
disability occurs after 36
contributions

A cash benefit granted

either as a monthly
pension or a
lumpsum amount to a
member who can no
longer work due to old
age.

- Reached the age of 60 years

old or the compulsory
retirement age of 65 years old
- Retired from service or
ceased to be self-employed

- Lump sum benefit equal

to the total contributions
paid by him and on his
behalf: if member who
retired at 60 years old has
not paid at least 120
monthly contributions prior
to his retirement

DEATH
A cash benefit granted
either as a monthly
pension or a lump sum
amount to the
beneficiaries of a
deceased member.

- Monthly pension for as

long as he lives: if member
paid at least 120 monthly
contributions prior to the
semester of his retirement

Primary Beneficiary:
Monthly Pension: member
has paid at least 36 monthly
contributions prior to the
semester of death

Computation of Lump
Sum:

Lump sum amount: member

has less than 36 monthly
contributions
If there are no primary
beneficiaries, the member's
secondary beneficiaries shall
be given a lump sum amount.

If member has paid at least

at least 36 monthly
contributions prior to the
semester of death:
36 x Monthly Pension
If member has not paid the
36 monthly contributions:
Monthly Pension
x
Number of Monthly
Contributions Paid
or
12 x Monthly Pension
(whichever is higher)

MONTHLY PENSION - shall be the highest of the following amounts:

(1) Sum of the following:
Php 300.00; plus
20% of the average monthly salary credit; plus
2% of the average monthly salary credit for each credited year of service in excess
of ten (10) years; or
(2) 40% of the average monthly salary credit; or
(3) Php 1,000.00
EFFECT IF THE RETIRED MEMBER DIES:
Primary beneficiaries as of the date of his retirement are entitled to receive the monthly
pension
No primary beneficiaries & he dies within 60 months from start of his monthly pension
Secondary beneficiaries are entitled to a lump sum benefit equivalent to the total monthly
pensions corresponding to the balance of the 5 year guaranteed period, excluding the
dependents' pension

FUNERAL BENEFITS

Funeral grant: Php 12,000.00 (in cash or in kind)

to help defray the cost of funeral expenses upon the death of a member

PRIMARY BENEFICIARIES
Dependent spouse until he or she remarries
Dependent legitimate, legitimated or legally adopted, and illegitimate children
Dependent illegitimate children entitled to 50% of the share of the legitimate,
legitimated or legally adopted children
Absence of the dependent legitimate & legitimated children dependent
illegitimate children shall be entitled to 100% of the benefits
SECONDARY BENEFICIARIES

Dependent parents
Any other person designated by the member

DEPENDENTS

 Legal spouse
Legitimate, legitimated or legally adopted, and illegitimate child who is:
unmarried;
not gainfully employed; and
has not reached 21 years of age; or
if over 21 years of age, he is congenitally or while still a minor has been permanently
incapacitated and incapable of self-support, physically or mentally;
Parent receiving regular support from the member