Photo from Pexels | Angie Reyes
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The government provides social welfare services to Filipinos through the Social Security System (SSS) and the Government Service Insurance System (GSIS). To ensure access to these services, both employers and employees are legally required to contribute to these agencies through salary deductions or contributions, as specified in the Social Security Act and the Government Service Insurance System Act.
The GSIS and SSS offer financial support to government and private sector employees and their families during contingencies such as death, old age, sickness, and disability due to work, with funding derived from the contributions of members and their employers.
Under Republic Act No. 11199 also known as the Social Security Act of 2018, coverage in the SSS shall be compulsory upon the following:
a. All employees including kasambahays or domestic workers not over sixty (60) years of age and their employers.
b. Self-employed persons as may be determined by the Social Security Commission, including, but not limited to the following:
(a) All self-employed professionals;
(b) Partners and single proprietors of businesses;
(c) Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term “employee” in Section 8(d) of R.A. No. 11199
(d) Professional athletes, coaches, trainers and jockeys; and
(e) Individual farmers and fishermen.
c. All sea-based and land-based Overseas Filipino Workers (OFWs) provided they are not over sixty (60) years of age.
Spouses who devote full time to managing the household and family affairs may be covered by the SSS on a voluntary basis, unless they are also engaged in other vocation or employment which is subject to mandatory coverage.
What are the benefits under the SSS law?
1. Retirement Benefit – A member who has paid at least 120 monthly contributions prior to the semester of retirement and who: (1) has reached the age of 60 years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age 65 years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first 18 monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS.
A covered member who is 60 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.
Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within 60 months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period, excluding the dependents’ pension.
The monthly pension of a member who retires after reaching age 60 shall be the higher of either: (1) the monthly pension computed at the earliest time he could; have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires. (Section 12-B, R.A. No. 11199)
2. Death Benefit – Upon the death of a member who has paid at least 36 monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. If he has not paid the required 36 monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher. (Section 13, R.A. No. 11199)
3. Permanent Disability Benefit – Upon the permanent total disability of a member who has paid at least 36 monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required 36 monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve 12 times the monthly pension, whichever is higher.
A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. (Section 13-A, R.A. No. 11199)
4. Funeral Benefit – A funeral grant equivalent to ₱12,000.00 shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree. (Section 13-B, R.A. No. 11199)
5. Sickness Benefit – A member who has paid at least 3 monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three 3 days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to 90% of his average daily salary credit, subject to the conditions set forth under Section 14 of R.A. No. 11199.
6. Maternity Leave Benefit – Any pregnant female worker in the private sector shall be granted a maternity leave 105 days with full pay, regardless of whether she gave birth via caesarian section or natural delivery, while maternity leave of 60 days with full pay shall be granted for miscarriage or emergency termination of pregnancy.
A female Social Security System (SSS) member who has paid at least three monthly contributions in the twelve-month period immediately preceding the semester of her childbirth, miscarriage, or emergency termination of pregnancy shall be paid her daily maternity benefit which shall be computed based on her average monthly salary credit for 105 days, regardless of whether she gave birth via caesarian section or natural delivery, subject to the following conditions:
(1) That the female worker 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;
(2) That the full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application;
(3) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided under Republic Act No. 1161, as amended, for the same period for which daily maternity benefits have been received;
(4) That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits advanced to the female worker by the employer upon receipt of satisfactory and legal proof of such payment; and
(5) That if a female worker should give birth or suffer a miscarriage or emergency termination of pregnancy 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 the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said female member would otherwise have been entitled to.
In case the employee qualifies as a solo parent under Republic Act No. 8972, the employee shall be paid an additional maternity benefit of fifteen (15) days. (Section 5, R.A. No. 11210)
7. Unemployment Insurance or Involuntary Separation Benefit – A member who is not over 60 years of age who has paid at 36 months contributions 12 months of which should be in the eighteen-month period immediately preceding the involuntary unemployment or separation shall be paid benefits in the form of monthly cash payments equivalent to 50% of the average monthly salary credit for a maximum of 2 months.
An employee who is involuntarily unemployed can only claim unemployment benefits once every 3 years. In case of concurrence of two or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe.
On the other hand, Republic Act No. 8291 also known as the Government Service Insurance System Act of 1997 provides that membership in the GSIS shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status.
The following are excluded from the coverage of the GSIS law:
- Members of the Armed Forces of the Philippines and the Philippine National Police, subject to the condition that they must settle first their financial obligation with the GSIS.
- Contractuals who have no employer and employee relationship with the agencies they serve.
What are the benefits under the GSIS law?
Except for the members of the judiciary and constitutional commissions who shall have life insurance only, all members of the GSIS shall have the following benefits:
- Separation Benefits – It shall consist of:
(a) a cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000 payable upon reaching 60 years of age upon separation, whichever comes later: Provided, that the member resigns or separates from the service after he has rendered at least three 3 years of service but less than 15 years; or
(b) a cash payment equivalent to 18 times his basic monthly pension at the time of resignation or separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life upon reaching the age of 60: Provided, that the member resigns or separates from the service after he has rendered at least 15 years of service and is below 60 years of age at the time of resignation or separation.
- Unemployment or Involuntary Separation Benefits – Monthly cash payments equivalent to 50% of the average monthly compensation shall be paid to a permanent employee who is involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganization: Provided, That he has been paying integrated contributions for at least one year prior to separation.
- Retirement Benefits – A member who retires from the service shall be entitled to retirement benefits provided that (a) he has rendered at least fifteen years of service; (b) he is at least 60 years of age at the time of retirement; and (c) he is not receiving a monthly pension benefit from permanent total disability.
Retirement benefits shall be:
(a) the lump sum payment payable at the time of retirement plus an old-age pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of the five-year (5) guaranteed period covered by the lump sum; or
(b) cash payment equivalent to 18 months of his basic monthly pension plus monthly pension for life payable immediately with no five-year (5) guarantee.
- Permanent Disability Benefits – A member who suffers permanent disability for reasons not due to his grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another, shall be entitled to the following benefits, subject to the corresponding conditions thereof:
a. Permanent Total Disability Benefits – he shall receive a monthly income benefit for life equal to the basic monthly pension effective from the date of disability: Provided, that: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least 36 monthly contributions within the 5 year period immediately preceding disability, or has paid a total of at least 180 monthly contributions, prior to his disability. If at the time of disability, he was in the service and has paid a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension. A member cannot enjoy the monthly income benefit for permanent disability and the old-age retirement simultaneously. (Section 16 (a))
If a member does not satisfy the above-mentioned conditions, but has rendered at least 3 years of service at the time of his disability, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000.00 which should have been his separation benefit. (Section 16 (b))
The following disabilities shall be deemed total and permanent:
(1) complete loss of sight of both eyes;
(2) loss of two limbs at or above the ankle or wrist;
(3) permanent complete paralysis of two limbs;
(4) brain injury resulting in incurable imbecility or insanity; and
(5) such other cases as may be determined by the GSIS. (Section 16 (d))
b. Permanent Partial Disability Benefits – he shall receive a cash payment in accordance with a schedule of disabilities to be prescribed by the GSIS: Provided, That he satisfies either conditions (1) or (2) of Section 16 (a);
The following disabilities shall be deemed permanent partial: (1) complete and permanent loss of the use of any finger, any toe, one arm, one hand, one foot, one leg, one or both ears, hearing of one or both ears, sight of both eyes; and (2) such other cases as may be determined by the GSIS.
- Temporary Disability Benefits – A member who suffers temporary total disability for reasons not due to any of the conditions enumerated in Section 15 hereof shall be entitled to 75% of his current daily compensation for each day or fraction thereof of temporary disability benefit not exceeding 120 days in one calendar year after exhausting all his sick leave credits and collective bargaining agreement sick leave benefits, if any, but not earlier than the fourth day of his temporary total disability: Provided, That: he is in the service at the time of his disability; or if separated, he has rendered at least 3 years of service and has paid at least 6 monthly contributions in the twelve-month period immediately preceding his disability.
A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously. If the disability requires more extensive treatment that lasts beyond 120 days, the payment of temporary total disability benefit may be extended by the GSIS but not to exceed 240 days.
- Survivorship Benefits – When a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits consisting of (a) the basic survivorship pension which is 50% of the basic monthly pension and (b) the dependent children’s pension not exceeding 50% of the basic monthly pension.
Upon the death of a member, the primary beneficiaries shall be entitled to the following options:
(a) Survivorship Pension: Provided, that the deceased was in the service at the time of his death or if separated from service, has at least 3 years of service at the time of his death and has paid 36 monthly contributions within the five-year period immediately preceding his death or has paid a total of at least 180 monthly contributions prior to his death; or
(b) Survivorship Pension + Cash Payment equivalent to 100% of his average monthly compensation for every year of service: Provided, that the deceased was in the service at the time of his death with at least 3 years of service; or
(c) Cash Payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less that P12,000.00: Provided: that the deceased has rendered at least 3 years of service prior to his death but does not qualify for the above-written benefits.
- Funeral Benefits – The amount of the funeral benefits shall be determined and specified by the GSIS in the rules and regulations but shall not be less than P12,000.00: Provided, That it shall be increased to at least P18,000.00 after 5 years and shall be paid upon the death of:
a. an active member; or
b. a member who has been separated from the service, but who may be entitled to future benefit; or
c. a pensioner; or
d. a retiree who at the time of his retirement was of pensionable age but who opted to retire under Republic Act No. 1616.
- Life Insurance Benefits – All employees except for Members of the AFP and the PNP shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance.
An annual dividend may be granted to all members of the GSIS whose life insurance is in force for at least one (1) year in accordance with a dividends allocation formula to be determined by the GSIS.
RELATED ARTICLES:
- Updates on SSS Funeral Benefits
- SSS Unemployment Benefits (Unemployment Insurance or Involuntary Separation Benefits)
- Understanding SSS and its benefits
- What are disability benefits under the GSIS Act of 1997?
- PAYMENT OF SSS AND GSIS CONTRIBUTIONS BY THE SAME PERSON AT THE SAME TIME
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
All rights reserved.
