“SECTION 1. Short Title. – This Act shall be known as the “AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY SYSTEM THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW.”

“SEC. 2. Declaration of Policy. – It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. Towards this end, the State shall endeavor to extend social security protection to workers and their beneficiaries.1aшphi1

“SEC. 3. Social Security System. – (a) To carry out the purposes of this Act, the Social Security System, hereinafter referred to as ‘SSS’, a corporate body, with principal place of business in Metro Manila, Philippines is hereby created. The SSS shall be directed and controlled by a Social Security Commission, hereinafter referred to as ‘Commission’, composed of the Secretary of Labor and Employment or his duly designated undersecretary, the SSS president and seven (7) appointive members, three (3) of whom shall represent the workers’ group, at least one of whom shall be a woman; three (3), the employers’ group, at least one (1) of whom shall be a woman; and one (1), the general public whose representative shall have adequate knowledge and experience regarding social security, to be appointed by the President of the Philippines. The six (6) members representing workers and employers shall be chosen from among the nominees of workers’ and employers’ organizations, respectively. The Chairman of the Commission shall be designated by the President of the Philippines from among its members. The term of the appointive members shall be three (3) years: Provided, That the terms of the first six (6) appointive members shall be one (1), two (2) and three (3) years for every two members, respectively: Provided, further, That they shall continue to hold office until their successors shall have been appointed and duly qualified. All vacancies, prior to the expiration of the term, shall be filled for the unexpired term only. The appointive members of the Commission shall receive at least two thousand five hundred pesos (P2,500.00) per diem for each meeting actually attended by them but not to exceed Ten thousand pesos (P10,000.00) a month:: Provided, That members of the Commission shall also receive a per diem of at least Two thousand five hundred pesos (P2,500.00) but not to exceed Fifteen thousand pesos (P15,000.00) a month: Provided , further, That said members of the Commission shall also receive reasonable transportation and representation allowances as may be fixed by the Commission, but not to exceed Ten thousand pesos (P10,000.00) a month.

“(b) The general conduct of the operations and management functions of the SSS shall be vested in the SSS President who shall serve as the chief executive officer immediately responsible for carrying out the program of the SSS and the policies of the Commission. The SSS President shall be a person who has had previous experience in the technical and administrative fields related to the purposes of this Act. He shall be appointed by the President of the Philippines and shall receive salary to be fixed by the Commission with the approval of the President of the Philippines, payable from the funds of the SSS.

“(c) The Commission, upon the recommendation of the SSS President, shall appoint an actuary, and such other personnel as may be deemed necessary, fix their reasonable compensation, allowances and other benefits, prescribe their duties and establish such methods and procedures as may be necessary to insure the efficient, honest and economical administration of the provisions and purposes of this Act: Provided, however, That the personnel of the SSS below the rank of Vice-President shall be appointed by the SSS President: Provided, further, That the personnel appointed by the SSS President, except those below the rank of assistant manager, shall be subject to the confirmation by the Commission: Provided, further, That the personnel of the SSS shall be selected only from civil service eligibles and be subject to civil service rules and regulations: Provided, finally, That the SSS shall be exempt from the provisions of Republic Act No. 6758 and Republic Act No. 7430.

“SEC. 4. Powers and Duties of the Commission and SSS. – (a) The Commission. – For the attainment of its main objectives as set forth in Section 2 hereof, the Commission shall have the following powers and duties:

“(b) The Social Security System. – Subject to the provision of Section four (4), paragraph seven (7) hereof, the SSS shall have the following powers and duties:

“SEC. 5. Settlement of Disputes. – (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within twenty (20) days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission.

“(b) Appeal to Courts. – Any decision of the Commission, in the absence of an appeal therefrom as herein Provided, shall become final and executory fifteen (15) days after the date of notification, and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission. The Commission shall be deemed to be a party to any judicial action involving any such decision, and may be represented by an attorney employed by the Commission, or when requested by the Commission, by the Solicitor General or any public prosecutors.

“(c) Court Review. – The decision of the Commission upon any disputed matter may be reviewed both upon the law and the facts by the Court of Appeals. For the purpose of such review, the procedure concerning appeals from the Regional Trial Court shall be followed as far as practicable and consistent with the purposes of this Act. Appeal from a decision of the Commission must be taken within fifteen (15) days from notification of such decision. If the decision of the Commission involves only questions of law, the same shall be reviewed by the Supreme Court. No appeal bond shall be required. The case shall be heard in a summary manner, and shall take precedence over all cases, except that in the Supreme Court, criminal cases wherein life imprisonment or death has been imposed by the trial court shall take precedence. No appeal shall act as a supersedeas or a stay of the order of the Commission unless the Commission itself, or the Court of Appeals or the Supreme Court, shall so order.

“(d) Execution of Decisions. – The Commission may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory, in the same manner as the decision of the Regional Trial Court by directing the city or provincial sheriff or the sheriff whom it may appoint to enforce such final decision or execute such writ; and any person who shall fail or refuse to comply with such decision, award or writ, after being required to do so shall, upon application by the Commission pursuant to Rule 71 of the Rules of Court, be punished for contempt.

“SEC. 6. Auditor and Counsel. – (a) The Chairman of the Commission on Audit shall be the ex-officio Auditor of the SSS. He or his representative shall check and audit all the accounts, funds and properties of the SSS in the same manner and as frequently as the accounts, funds and properties of the government are checked and audited under existing laws, and he shall have, as far as practicable, the same powers and duties as he has with respect to the checking and auditing of public accounts, funds and properties in general.

“(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He or his representative shall act as legal adviser and counsel thereof.

“SEC. 7. Oaths, Witnesses, and Production of Records. – When authorized by the Commission, an official or employee thereof shall have the power to administer oath and affirmation, take depositions, certify to official acts, and issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books, papers, correspondence and other records deemed necessary as evidence in connection with any question arising under this Act. Any case of contumacy shall be dealt with by the Commission in accordance with law.

“SEC. 8. Terms Defined. – For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings:

“(a) SSS – The Social Security System created by this Act.

“(b) Commission – The Social Security Commission as herein created.

“(c) Employer- Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed person shall be both employee and employer at the same time.

“(d) Employee – Any person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship: Provided, That a self-employed person shall be both employee and employer at the same time.

“(e) Dependents – The dependents shall be the following:

“(f) Compensation – All actual remuneration for employment, including the mandated cost-of-living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration in excess of the maximum salary credit as Provided under Section Eighteen of this Act.

“(g) Monthly salary credit – The compensation base for contributions and benefits as indicated in the schedule in Section Eighteen of this Act.

“(h) Monthly – The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis, ‘monthly’ shall mean a period of one (1) month.

“(i) Contribution – The amount paid to the SSS by and on behalf of the members in accordance with Section Eighteen of this Act.

“(j) Employment – Any service performed by an employee for his employer except:

“(k) Beneficiaries – The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary.

“(l) Contingency – The retirement, death, disability, injury or sickness and maternity of the member.

“(m) Average monthly salary credit – The result obtained by dividing the sum of the last sixty (60) monthly salary credits immediately preceding the semester of contingency by sixty (60), or the result obtained by dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period, whichever is greater: Provided, That the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit.

“(n) Average daily salary credit- The result obtained by dividing the sum of the six (6) highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty (180).

“(o) Semester – A period of two (2) consecutive quarters ending in the quarter of contingency.

“(p) Quarter – A period of three (3) consecutive calendar months ending on the last day of March, June, September and December.

“(q) Credited years of service – For a member covered prior to January nineteen hundred and eighty five (1985) minus the calendar year of coverage plus the number of calendar years in which six (6) or more contributions have been paid from January nineteen hundred and eighty five (1985) up to the calendar year containing the semester prior to the contingency. For a member covered in or after January nineteen hundred and eighty five (1985), the number of calendar years in which six (6) or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency: Provided, That the Commission may provide for a different number of contributions in a calendar year for it to be considered as a credited year of service.

“(r) Member – The worker who is covered under Section Nine and Section Nine-A of this Act.

“(s) Self-employed – Any person whose income is not derived from employment, as defined under this Act, as well as those workers enumerated in Section Nine-A hereof.

“(t) Net earnings – Net income before income taxes plus non-cash charges such as depreciation and depletion appearing in the regular financial statement of the issuing or assuming institution.

“(u) Fixed charges – Recurring expense such as amortization of debt discount or rentals for leased properties, including interest on funded and unfunded debt.

“SEC. 9. Coverage. – (a) Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age and their employers: Provided, That in the case of domestic helpers, their monthly income shall not be less than One thousand pesos (P1,000.00) a month: Provided, further, That any benefit already earned by the employees under private benefit plans existing at the time of the approval of this Act shall not be discontinued, reduced or otherwise impaired: Provided, further, That private plans which are existing and in force at the time of compulsory coverage shall be integrated with the plan of the SSS in such a way where the employer’s contribution to his private plan is more than that required of him in this Act, he shall pay to the SSS only the contribution required of him and he shall continue his contribution to such private plan less his contribution to the SSS so that the employer’s total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before the compulsory coverage: Provided, further, That any changes, adjustments, modifications, eliminations or improvements in the benefits to be available under the remaining private plan, which may be necessary to adopt by reason of the reduced contributions thereto as a result of the integration, shall be subject to agreements between the employers and employees concerned: Provided, further, That the private benefit plan which the employer shall continue for his employees shall remain under the employer’s management and control unless there is an existing agreement to the contrary: Provided, finally, That nothing in this Act shall be construed as a limitation on the right of employers and employees to agree on and adopt benefits which are over and above those Provided under this Act.

“(b) Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis.

“(c) Filipinos recruited by foreign-based employers for employment abroad may be covered by the SSS on a voluntary basis.

“SEC. 9-A. Compulsory Coverage of the Self-Employed. – Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including but not limited to the following:

“Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons.

“SEC. 10. Effective Date of Coverage. – Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment: Provided, That the compulsory coverage of the self-employed person shall take effect upon his registration with the SSS.

“SEC. 11. Effect of Separation from Employment. – When an employee under compulsory coverage is separated from employment, his employer’s contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit.

“SEC. 11-A. Effect of Interruption of Business or Professional Income. – If the self-employed realizes no income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section Twenty-two-A hereof.

“SEC. 12. Monthly Pension. – (a) The monthly pension shall be the highest of the following amounts:

“(b) Notwithstanding the preceding paragraph, the minimum pension shall be One thousand two hundred pesos (P1,200.00) for members with at least ten (10) credited years of service and Two thousand four hundred pesos (P2,400.00) for those with twenty (20) credited years of service.

“SEC. 12-A. Dependents’ Pension. – Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (P250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate or illegitimate children, the former shall be preferred.

SEC. 12-B. Retirement Benefits. – (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (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 eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS.

“(b) A covered member who is sixty (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.

“(c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act.

“(d) 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 sixty (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.

“(e) The monthly pension of a member who retires after reaching age sixty (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.

“SEC. 13. Death Benefits. – Upon the death of a member who has paid at least thirty-six (36) monthly c