SOCIAL WELFARE LEGISLATION:

Defined as those laws that provide particular kinds of protection or

benefits to society or segments thereof in furtherance of social justice.

A. The
Social Security System: A Program Description
(Republic Act No. 11199)

The Social Security System (SSS) is a publicly managed pension

institution responsible for providing social protection to all private sector
workers in the Philippines. The mandatory social security program
administered by the SSS basically provides financial benefits to qualified
members to cover real life contingencies such as retirement, disability,
death, maternity, sickness and employment-related injury that may result in
income loss or financial burden.

Membership in the program is compulsory for employed and self-

employed workers not over 60 years old and earning an income of at least
P1,000.00 a month. The mandatory program is a contributory scheme that
has a contribution rate of 8.4%. The payment of the monthly premium
contribution is shared by the employee (3.33%) and employer (5.07%), in
the case of covered employees. For the self-employed and the voluntary
member, the premium monthly contribution is fully shouldered by the
worker.

Concurrently, the SSS administers the Employees Compensation

(EC) Program for private sector workers. The EC Program provides
sickness, death and disability benefits to formal sector workers for
employment-related injuries. The monthly contribution to the EC Program
amounts to 1% of the monthly income to a maximum salary base of P1,000
and is shouldered solely by the employers. EC benefits are in the form of
pensions and/or medical services.

The Social Security Law is not a law of succession. It is not the heirs
of the employee who are entitled to receive the social security benefits, but
the designated beneficiaries. The heirs would be entitled to the social
security benefits only when:

(1) The beneficiary is the estate;

(2) There is no designated beneficiary; or
(3) The designation of beneficiary is void.

The Social Security Law (SSL) is Not Part of the Taxation System
because it is not intended for raising revenues but for the promotion of the
general welfare.

Who are NOT covered by the SSS:

 (1) Government employees;
(2) Employees of foreign governments, international organizations,
and their wholly-owned instrumentality;
(3) Services where there is no employer-employee relationship;
(4) Temporary employees, if excluded by regulation of the Social
Security Commission.

Compulsory Coverage under the SSS is as follows:

(1) All employers;

(2) All employees not over 60 years of age;
(3) Domestic helpers;
(4) Self-employed persons including:
(a) 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”;
(d) Professional athletes, coaches, trainers and jockeys; and
(e) Individual farmers and fishermen.
(5) Overseas Filipino workers, whether land-based or sea-based.

SSS Coverage of OFWs:

All sea-based and land-based overseas Filipino workers (OFWs) shall

be compulsorily covered by the SSS provided, that they are not over 60
years of age.

Manning agencies, being agents of their principals, are considered as

employers of sea-based OFWs.

Land-based OFWs are considered in the same manner as self-

employed persons until such time when the Department of Foreign Affairs
(DFA), the DOLE and all its agencies involved in deploying OFws for
employment abroad are able to negotiate bilateral labor agreements with
the host countries to ensure that the employers of land-based OFWs pay
the required SSS contributions.

Upon the termination of their employment overseas, OFWs may

continue to pay contributions on a voluntary basis to maintain their rights to
full benefits.

Voluntary Coverage:
 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
engaged in a vocation or employment which is subject to mandatory
coverage.

Primacy of Regular Employment Over Self- Employment.

If a person is both self-employed and an employee of a firm, he shall

pay the contributions under both status and coverage. However, when the
combined contributions paid to SSS as employee and as self-employed
member exceed the maximum contributions prevailing at the time of
simultaneous coverage, the excess shall be refunded to the member. The
excess contributions to be refunded shall be taken from the self-employed
contributions.

Effective Date of SSS Coverage:

(1) For employers – on the first day of his operation;

(2) For employees – on the first day of his employment;
(3) For the self-employed – upon his registration with the SSS

The mere fact that a person has obtained an SSS number does not
automatically make him an SSS member. He will be considered as a
member only when he has been reported for SSS coverage and has paid
at least one month contribution.

SSS Members Cannot Withdraw Their Membership:

When a person registers for SSS membership, he becomes a

member for life. Therefore, during such time that the member failed to remit
contributions, the benefits and loan privileges provided by the SSS can still
be availed of as long as the member meets the qualifying conditions for
entitlement thereto.

Obligations of Employers Under the Social Security Law:

(1) To report his employees for coverage. Failure to report an

employee for SSS coverage will hold the employer liable to the SSS for
damages in an amount equivalent to the benefits to which the employee
would have been entitled had his name been reported on time. In case of
pension benefits, the amount of damages is equivalent to whichever is
higher between: (a) the accumulated pension due as of the date of
settlement of the claim; or (b) to the five (5) years’ monthly pension,
including dependents monthly pensions.
 The employer is not liable for damages for failure to report an
employee if the contingency occurs within thirty (30) days from the date of
employment.

(2) To deduct the employee’s contribution from his monthly salary.

The employer shall deduct from such employee’s monthly compensation
the employee’s contribution in an amount corresponding to his salary,
wage, compensation or earnings during the month in accordance with the
monthly salary credits, the schedule and the rate of contributions.

(3) To pay the employer’s contributions. The obligation of an

employer to pay SSS premium contributions subsists only during the term
of employment of his employee. When the employee is separated from
employment, the employer’s obligation to pay contribution ceases at the
end of the month of separation.

(4) To remit the contributions to the SSS within the first ten (10) days
of each month. Failure of an employer to remit the SSS contributions will
not only subject him to criminal liability – he will also have to pay the
unremitted contributions, plus 2% penalty per month from the date the
contribution fell due.

The principal is subsidiarily liable for the civil liabilities of his

contractor.

Contributions of the Self-Employed.

The self-employed SSS member pays both the employer’s and

employee’s contributions.

The monthly earnings declared by the self-employed member at the

time of his registration shall be the basis of his monthly earnings.

If the self-employed member does not earn any income in any given
month, he is not required to pay contributions for that month. Retroactive
payment of contribution is not allowed.

The provisions of the SSL are to be liberally construed in favor of

those seeking its benefits. The Social Security System (SSS) is the
implementing arm of the Social Security Act. It is a corporate body with a
personality separate and distinct from the Government, directed and
controlled by the Social Security Commission.

The funds of the SSS are private funds. The funds contributed to the
SSS are not public funds. The funds belong to the members and are
merely held in trust by the Government. Thus, the inclusion of religious
organizations under the coverage of the SSL does not violate 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.

A. Long Term Benefits: Retirement, Survivorship and Disability

Retirement Benefit

The SSS retirement benefit is a cash benefit in the form of monthly

pensions or a one-time lump sum payment. A covered employee is entitled
to the monthly old-age pension for life, including a 13th month pension,
granted every December if he has paid at least 120 monthly contributions
and (1) if retired, has reached the age of sixty years or (2) if still employed,
has reached the age of sixty-five.

A covered member who does not qualify for the monthly pension is
entitled to a lump sum benefit equal to the total contributions paid by him
and his previous employers, plus interest earned. He must be at least 60
years old, separated from employment and has not opted to continue
payment of contributions.

Upon the death of an SSS pensioner, his primary beneficiaries as of

the date of retirement are entitled to continue receiving his pension. If a
retirement pensioner dies within sixty months from the start of his monthly
pension and is not survived by primary beneficiaries, his secondary
beneficiaries are entitled to a lump sum benefit equivalent to the total
amount of contributions paid by the member and his employer, plus
interest.

Disability Benefit

An SSS member who suffers partial permanent or total permanent

disability is eligible to receive a monthly pension if he has contributed at
least 36 monthly contributions. If the member has less than the required
number of contributions, he will receive a one-time lump sum payment
equivalent to the monthly pension multiplied by the number of monthly
contributions paid to SSS or the monthly pension times 12, whichever is
higher. The minimum disability pension is set at P1,000.00.

Upon the death of a totally disabled pensioner, his primary beneficiary

as of the date of disability shall be entitled to receive 100% of the monthly
pension. If a totally disabled pensioner dies within sixty months from the
start of his monthly pension and is not survived by primary beneficiaries,
his secondary beneficiaries are entitled to a lump sum benefit equivalent to
the difference of 60 times the monthly pension and the total monthly
pensions paid by the SSS.
 Death Benefit

The death of an SSS member who has paid at least 36 monthly

contributions entitles his primary beneficiaries to a monthly pension.
Beneficiaries of SSS members with less than 36 contributions are entitled
to a lump sum benefit.

Dependent's Allowance

Upon a member's retirement, permanent disability and death, up to

five minor dependent children shall receive a dependent's pension
equivalent to P250 or 10% of the member's monthly pension, whichever is
higher. The dependent's pension stops only when any of the following
occurs: (1) the child reaches 21 years old, (2) the child gets married, (3) the
child gets employed and earns at least P300 a day, or (4) the child dies.

B. Short Term Benefits: Sickness, Maternity Benefits and Funeral

Grant

Sickness Benefit

The SSS sickness benefit is a daily cash allowance for the number of
days an SSS member is unable to work due to sickness or injury. A
member is eligible to receive sickness benefit if the following conditions are
met: (1) the member has at least 3 monthly contribution within the 12-
month period prior to the semester of contingency, (2) the member has
been confined in the hospital or at home for at least 4 days, (3) the SSS
has been notified, and (4) all sick leaves have been used up.

Maternity Benefit

The SSS maternity benefit is a daily cash allowance given to

members who are unable to work due to childbirth or miscarriage. The
benefit depends on the number of compensable days and the type of
delivery. Maternity benefits are available only to female members,
regardless of frequency of pregnancy, miscarriage or emergency
termination of pregnancy. The main qualifying condition for eligibility to
claim maternity benefits is at least 3 monthly contributions during the 12-
month period prior to the semester of contingency. A female SSS member
should notify her employer of her pregnancy and the probable date of
childbirth.

The maternity leave benefit to be paid by the SSS is equivalent to

100% of the average daily salary credit. It will be paid in advance by the
employer subject to reimbursement by the SSS.

Funeral Grant
 A funeral grant amounting to a maximum of P 20,000.00 is paid by
the SSS to whoever shoulders the funeral expense upon the death of a
member or pensioner. A member must have paid at least one month's
contribution for his beneficiaries to be eligible to claim this benefit.

B. The Government Service Insurance System (GSIS):

is a social insurance institution. It provides and administers a pension

fund for employees of the government that has the following social security
benefits: compulsory life insurance, optional life insurance, retirement
benefits, and disability benefits for work-related accidents and death
benefits. (RA No. 8291)

The principal benefit package of the GSIS consists of compulsory and

optional life insurance, retirement, separation, and employee’s
compensation benefits.

 Life insurance
 Retirement programs
-Eligibility: If the member has
a) rendered at least fifteen (15) years of service
b) is at least sixty (60) years of age, and
c) is not receiving a monthly pension benefit from permanent
total disability

-Retirement Benefit Options:

a) Five (5) year lump sum equivalent to 60 months of the

basic monthly pension (BMP), subject to qualification requirements,
less all outstanding obligations of the member in accordance with the
Claims and Loans Interdependency Policy (CLIP), plus an old
age pension benefit equal to the BMP payable for life, starting on
the first day of the month following the expiration of the five (5)
year guaranteed period; or

b) Cash Payment benefit equivalent to eighteen (18) times

of the BMP, subject to qualification requirements, less outstanding
obligations of the member in accordance with the CLIP, plus monthly
pension for life payable on the first month following the date of
retirement.

 Separation

Either one of the following:

1. For those members who are separated from service and who have at
least three (3) years of service but less than fifteen (15) years shall
be entitled to cash payment equivalent to 100% of the member’s
Average Monthly Compensation (AMC) for each year of creditable
 service, but not less than P 12,000.00, payable upon reaching the
age of 60, or upon his separation if he is already 60 years of age at
the time of separation.

2. A cash payment equivalent to 18 times the basic monthly pension

payable at the time of resignation or separation, provided 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, plus an old age
pension benefit equal to the basic monthly pension payable monthly
for life upon reaching the age of sixty (60).

C. Employees Compensation Commission:

o Disability (Permanent Total Disability, Permanent Partial

Disability, Temporary Total Disability)
-Any loss or impairment of the normal functions of the
physical and/or mental faculties of a member, which
permanently or temporarily prevents him to continue with his
work or engage in any other gainful occupation resulting into a
loss of income.

Suspension of benefit when he/she:

a) Is re-employed; or
b) Recovers from his/her disability as determined by the GSIS,
whose decision shall be final and binding, or
c) Fails to present himself for medical examination when
required by the GSIS; or
d) Is receiving any other pension either from the GSIS or
another local or foreign institution or organization.

o Unemployment

o Funeral- To help defray expenses incident to the burial and

funeral of the deceased member, pensioner or retiree under
RA 660, RA 1616, PD 1146 and RA 8291.

Payable to any qualified individual, in accordance with the

following order of priority:

1) Legitimate Spouse
2) Legitimate child who spent for the funeral services, or
3) Any other person who can show incontrovertible proof that he
shouldered the funeral expenses of the deceased.

o Survivorship
o Personal insurance
o Scholarships
 Beneficiaries:

There are two (2) kinds of beneficiaries under the GSIS Law as
follows:

1. Primary Beneficiaries- The legal dependent spouse until he/she

remarries and the dependent children.
2. Secondary Beneficiaries-The dependent parents and, subject to
the restrictions on dependent children, the legitimate descendants

Dependents:

a) The legitimate spouse dependent for support upon the member or

the pensioner;
b) The legitimate, legitimated, legally adopted child including the
illegitimate child, who is unmarried, not gainfully employed, not
over the age of majority, or is over the age of majority but
incapacitated and incapable of self-support due to a mental or
physical defect acquired prior to the age of majority, and
c) The parents’ dependent upon the member for support.

Gainful Occupation- Any productive activity that provided the member

with income at least equal to the minimum compensation of government
employees.

D. Philippine Health Insurance Corporation (PhilHealth):

The Philippine Health Insurance Corporation (PhilHealth) is a

government-owned and controlled corporation that deals with health care
financing. It aims to provide quality health care for all Filipinos.

It is a tax exempt government corporation attached to the Department of

Health for policy coordination and guidance. It is vested not only with
administrative powers but also quasi-judicial powers, to wit:

a) To conduct investigations for the determination of a controversy,

complaint or unresolved grievance brought to its attention and render
decisions, orders or resolutions thereon.
b) To summon the parties to a controversy, issue subpoenas requiring
the attendance and testimony of witnesses or the production of
documents and other materials necessary to a just determination of
the case under investigation;
c) To suspend temporarily, revoke permanently, or restore the
accreditation of a health care provider or the right to benefits of a
member and/or impose fines after due notice and hearing.

Decisions of the PHILHEALTH Corp. are immediately executory,

even pending appeal when the public interest so requires.
 As of November 2014, by virtue of Republic Act No. 10645, all senior
citizens are mandatorily required to receive PhilHealth coverage.

Formal Economy membership

 Those who qualify as members of the formal economy are

government workers, private employees, project-based contractors,
owners of micro, small, medium, or large enterprises, household help,
and family drivers. Click the link above to learn more.

Informal Economy membership

 Those who qualify as members of the informal economy are migrant

workers, market vendors, pedicab and tricycle drivers, small
construction workers, self-earning individuals, Filipinos with dual-
citizenship, naturalized Filipino citizens, and citizens of other
countries working and/or residing in the Philippines. Click the link
above to learn more.

Indigent members

 To this category belong persons who have no visible means of

income, or whose income is insufficient for family subsistence, as
identified by the Department of Social Welfare and Development
(DSWD), based on specific criteria. All indigents identified by the
DSWD under the National Household Targeting System (NHTS) for
Poverty Reduction and other such acceptable methods, shall
automatically be enrolled and covered under the Program. The
female spouse of the families identified by DSWD may be designated
as the primary member of the Program.

Sponsored members

 Those who may qualify to be sponsored by PhilHealth are orphans,

abandoned and abused minors, out-of-school youths, barangay
workers and volunteers. Click the link above to learn more.

Lifetime members

 Those who qualify as lifetime members are senior citizens, uniformed

personnel, SSS underground miner-retirees who have all paid at least
120 monthly contributions with PhilHealth.

Senior citizens

 This category is for Filipino citizens who are residents of the

Philippines, aged sixty (60) years or above and are not currently
covered by any membership category of PhilHealth. As of November
2014, by virtue of  Republic Act No. 10645, all senior citizens are
mandatorily required to receive PhilHealth coverage. 
E. The Home Development Mutual Fund Law of 2009 (RA 9769):

is a provident savings system for employees in the private and public

sectors supported by matching contributions of their respective employers,
with housing as primary investment.

Who are compulsorily covered by the HDMF Law:

a) All employees who are covered by the SSS or GSIS;
b) All employers, notwithstanding any waiver of coverage previously
issued;
c) All uniformed members of the Armed Forces of the Philippines
(AFP), the Bureau of Fire Protection, the Bureau of Jail
Management and Penology, and the Philippine National police;
d) Filipinos employed by foreign-based employers.

Voluntary Coverage:

Spouses who devote full-time to managing the household and family

affairs may be covered on a voluntary basis. The basis of voluntary
contributions is ½ of the monthly compensation income of the employed
spouse.

The maximum monthly compensation to be used in computing the

employee and employer contributions is P 5,000.00.

Term of Membership:

Membership in the HDMF shall be for a period of twenty (20) years,

unless earlier terminated by reason of retirement, disability, insanity, death,
departure from the country or other causes as may be provided for by the
Board of Trustees. Upon termination of membership, the employee can get
all the contributions that he has made, including the contributions made by
the employer in his behalf.

Withdrawal of Contributions:

The total accumulated value of the contributions may be withdrawn

after the 15th year of continuous membership.

F. LIMITED PORTABILITY LAW:

Portability refers to the transfer of funds for the account, and benefit
of a worker who transfers from one system to the other (Section 1(b), Rule
III of R.A. No. 7699). The term system herein refers to SSS or GSIS. It
refers to instances where a worker transfers from private employment to
government employment, and vice versa, thereby transferring from
being SSS member to GSIS member, and vice versa. The transfer of funds
is to ensure that his/her years of service are duly credited.
 Under RA 7699, otherwise known as the Portability Law, government
retirees who do not meet the required number of years provided under PD
1146 and RA 8291 may still avail themselves of retirement and other
benefits.

Under this law, retirees may combine their years of service in the
private sector represented by contributions to the Social Security System
(SSS) with their government service and contributions to the GSIS to
satisfy the required years of service under PD 1146 and RA 8291.

However, if retirees have already satisfied the required years of

service under the GSIS retirement option they have chosen, they would not
be allowed to incorporate their contributions to the SSS anymore for
availment of additional benefits.

In case of death, disability and old age, the periods of creditable

services or contributions to the SSS and GSIS shall be added to entitle
retirees to receive the benefits under either PD 1146 or RA 8291.
If qualified under RA 8291, all the benefits shall apply EXCEPT the
cash payment. The Portability Law provides that only benefits common to
both Systems (GSIS and SSS) shall be paid. Cash payment is NOT
included in the benefits provided by the SSS.

Totalization:

It refers to the process of adding up the periods of creditable services

or contributions under each of the Systems, SSS or GSIS, for the purpose
of eligibility and computation of benefits (Chan, Joselito, Bar Reviewer on
Labor Law, 2017 3rd Revised Edition, pg. 445). Hence, if a worker is not
entitled to any benefits under SSS or GSIS because the periods of his
creditable services or contributions does not qualify to avail any benefit
under SSS or GSIS, as the case may be, he/she could apply
the totalization rule. Applying the totalization rule can increase the chances
of a worker to avail of benefits under the subject law. 
         
Section 3, Rule V of R.A. No. 7699 provides instances
where totalization applies, to wit:

1. If a worker is not qualified for any benefits from both Systems;

2. If a worker in the public sector is not qualified for any benefits in
the GSIS; or
3. If a worker in the private sector is not qualified for any benefits from
the SSS.

If a work qualifies for benefits in both Systems, totalization shall not

apply (Section 5, Rule V of R.A. No. 7699).