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SOCIASOCIASOCIASOCIA

CURITYCURITYCURITYCURITYEMS AEMS AEMS AEMS A

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AN ACT TO CREATE A SOCIAL SECURITY SYSTEM PROVIDING SICKNESS,

UNEMPLOYMENT, RETIREMENT, DISABILITY AND DEATH BENEFITS FOR

EMPLOYEES

SECTION 1. Short Title. This Act shall be known as the "Social Security Law" (Asamended by Sec. 1, P.D. No. 24, S-1972)."

SECTION 2.Declaration of Policy. It is the policy of the Republic of thePhilippines to establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout thePhilippines which shall provide to covered employees and their families protectionagainst the hazards of disability, sickness, old age and death, with a view topromoting their well-being in the spirit of social justice. (As amended by Sec. 1,R.A. 1792 and Sec. 2, P.D. No. 24, S-1972)

A. Administration

SECTION 3. Social Security System. (a) To carry out the purposes of this Act, theSocial Security System with principal place of business in Metro Manila, Philippinesis hereby created. The SSS shall be directed and controlled by a Social SecurityCommission composed of the Secretary of Labor and Employment, the SSSAdministrator and seven appointive members: three of whom shall represent thelabor group, one of whom shall be a woman; three, the management group, one ofwhom shall be a woman; and, one, the general public, to be appointed by the

President of the Philippines. The Chairman of the Commission shall be designatedby the President from among its members. The term of the appointive membersshall be three years: Provided, That the terms of the first six appointive membersshall be one, two and three years for every two members, respectively.

All vacancies, except through the expiration of the term, shall be filled for theunexpired term only. The apppointive members of the Commission shall receiveone thousand five hundred pesos per diem for each meeting actually attended bythem: Provided, That no compensation shall be paid for more than eight meetings amonth. Members of the Commission who hear cases pending before theCommission, shall also receive a per diem of one thousand five hundred pesos. (Asamended by Sec. 2, R.A. 1792, Sec. 1, R.A. 2658, Sec. 1, R.A. 4857; Sec. 3, P.D.No. 24, S-1972; Sec. 1, P.D. No. 347, S-1973; Sec. 1, P.D. 735, S-1975; Sec. 1,P.D. No. 1202, S-1977; Sec. 1, E.O. No. 102, S-1986; and R.A. 7688)

(b) The general conduct of the operations and management functions of the SSSshall be vested in the Administrator who shall serve as the chief executive officer

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immediately responsible for carrying out the program of the SSS and the policies ofthe Commission. The administrator shall be a person who has had previousexperience in technical and administrative fields related to the purposes of this Act.He shall be appointed by the President of the Philippines and shall receive a salaryto be fixed by the Commission with the approval of the President, payable from thefunds of the SSS. (As amended by Sec. 1, R.A. 2658; Sec. 3, P.D. No. 24, S-1972;and Sec. 1, P.D. No. 735, S- 1975)

(c) The Commission, upon the recommendation of the Administrator shall appointan actuary, and such other personnel as may be deemed necessary; fix theircompensation; prescribe their duties and establish such methods and proceduresas may insure the efficient, honest and economical administration of the provisionsand purposes of this Act. Provided, however, That the personnel of the SSS shallbe selected only from civil service eligibles certified by the commissioner of civil

service and be subject to civil service rules and regulations. (As amended by Sec.1, R.A. 2658 and Sec. 1, P.D. No. 735, S-1975)

SECTION 4.Powers and Duties of the Commission. For the attainment of its mainobjectives as set forth in section two hereof, the Commission shall have thefollowing powers and duties:

(a) To adopt, amend and rescind, subject to the approval of the President,such rules and regulations as may be necessary to carry out the provisionsand purposes of this Act.

(b) To submit annually not later than March 31, a public report to thePresident of the Philippines covering its activities in the administration andenforcement of this Act during the preceding year including information andrecommendations on broad policies for the development and perfection of theprogram of the SSS. (As amended by Sec. 2, P.D. No. 735, S-1975)

(c) To require the Actuary to submit a valuation report on the SSS benefitprogram every five years, or more frequently as may be necessary, and toundertake the necessary actuarial studies and calculations concerningincreases in benefits and the financial stability of the SSS and to provide forthe feasible increases in benefits and the addition of new ones under suchrules and regulations as the Commission may adopt subject to the approvalof the President: President, That the actuarial soundness of the reserve fundshall be guaranteed: Provided, further, That such increases in benefits shall

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not require any increase in the rate of contribution. (As amended by Sec. 1,P.D. No. 1636, S-1979 and Sec. 2, E.O. No. 102, S-1986)

(d) To establish branches of the System whenever and wherever it may beexpedient or necessary, and to inspect or cause to be inspected periodicallysuch branches.

(e) To enter into agreements or contracts for such service and aid, as may beneeded for the proper, efficient and stable administration of the System.

(f) To adopt from time to time a budget of expenditures including salaries ofpersonnel, against all funds available to the System under this Act. (Asamended by Sec. 3, R.A. 1792)

(g) To set up its accounting system and provide the necessary personneltherefor. (As amended by Sec. 3, R.A. 1792)

(h) To require reports, compilations and analyses of statistical and economicdata and to make investigations as may be needed for the properadministration and development of the System.

(i) To acquire property, real or personal, which may be necessary orexpedient for the attainment of the purposes of this Act.

(j) To acquire, receive, or hold, by way of purchase, expropriation orotherwise, public or private property for the purpose of undertaking housingprojects preferably for the benefit of low-salaried employees and for themaintenance of hospitals and institutions for the sick, aged and infirmemployees and immediate members of their families. (As amended by Sec. 2,R.A. 2658 and Sec. 2., P.D. No. 735, S-1975)

(k) To sue and be sued in court.

(l) To perform such other acts as it may deem appropriate for the proper

enforcement of this Act.

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SECTION 5. Settlement of Disputes. (a) Any dispute arising under this Act withrespect to coverage, benefits, contributions and penalties thereon or any othermatter related thereto, shall be cognizable by the Commission, and any case filedwith respect thereto shall be heard by the Commission, or any of its members, orby hearing officers duly authorized by the Commission and decided within twentydays after the submission of the evidence. The filing, determination and settlementof disputes shall be governed by the rules and regulations promulgated by theCommission. (As amended by Sec. 3, R.A. 2658; Sec. 2, R.A. 4857; and Sec. 3,P.D. No. 735, S-1975)

(b) Appeal to Courts. Any decision of the Commission, in the absence of anappeal therefrom as herein provided, shall become final fifteen days after the dateof notification, and judicial review thereof shall be permitted only after any partyclaiming to be aggrieved thereby has exhausted his remedies before the

Commission. The Commission shall be deemed to be a party to any judicial actioninvolving any such decision, and may be represented by an attorney employed bythe Commission, or when requested by the Commission, by the Solicitor General orany fiscal.

(c) Court Review. The decision of the Commission upon any disputed mattermay be received both upon the law and the facts by the Court of Appeals. For thepurpose of such review the procedure concerning appeals from the Court of FirstInstance shall be followed as far as practicable and consistent with the purposes ofthis Act. Appeal from a decision of the Commission must be taken within fifteen

days from notification of such decision. If the decision of the Commission involvesonly questions of law, the same shall be reviewed by the Supreme Court. Noappeal bond shall be required. The case shall be heard in a summary manner, andshall take precedence over all cases, except that in the Supreme Court, criminalcases wherein life imprisonment or death has been imposed by the trial court shalltake precedence. No appeal shall act as a supersedeas or a stay of the order of theCommission, unless the Commission itself, or the Court of Appeals or the SupremeCourt, shall so order.

(d) Execution of decisions Any decision or award of the Commission after thesame has become final and executory shall be enforced and executed in the samemanner as decisions of Courts of First Instance and the Commission shall have thepower to issue to the City or provincial sheriff or the sheriff whom it may appointsuch writs of execution as may be necessary for the enforcement of such decisionor award 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

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Commission, be punished by the proper court for contempt. (As amended by Sec.4, P.D. No. 24, S-1972)

SECTION 6.Auditor and Counsel. (a) The Commissioner on Auditor shall be theex-officio Auditor of the SSS. He or his representative shall check and audit all theaccounts, funds and properties of the SSS in the same manner and as frequentlyas the accounts, funds and properties of the government are checked and auditedunder existing laws; and he shall have, as far as practicable, the same powers andduties as he has with respect to the checking and auditing of public accounts, fundsand properties in general.

(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He or hisrepresentative shall act as legal adviser and counsel thereof. (As amended by Sec.4, P.D. No. 735, S-1975)

SECTION 7. Oaths, Witnesses, and Production of Records. When authorized by theCommission, an official or employee thereof shall have the power to administeroath and affirmation, take depositions, certify to official acts, and issue subpoenaand subpoena duces tecum to compel the attendance of witnesses and theproduction of books, papers, correspondence and other records deemed necessaryas evidence in connection with any question arising under this Act. Any case ofcontumacy shall be dealt with in accordance with the provisions of section fivehundred eighty of the Administrative Code.

B. Definitions

SECTION 8. Terms Defined. For the purposes of this Act, the following termsshall, unless the context indicates otherwise, have the following meanings:

(a) SSS The Social Security System created by this Act. (As amended bySec. 2, P.D. No. 1636, S-1979)

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

(c)Employer Any person, natural or juridical, domestic or foreign, whocarries on in the Philippines any trade, business, industry, undertaking, oractivity of any kind and uses the services of another person who is under hisorders as regards the employment, except the Government and any of itspolitical subdivisions, branches or instrumentalities, including corporations

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owned or controlled by the Government: Provided, That a self-employedprofessional shall be both employee and employer at the same time. (Asamended by Sec. 2, P.D. No. 1636, S-1979)

(d)Employee Any person who performs services for an employer in whicheither or both mental and physical efforts are used and who receivescompensation for such services, where there is an employer-employeerelationship: Provided, That a self-employed professional shall be bothemployee and employer at the same time. (As amended by Sec. 4, R.A. 2658and Sec. 2, P.D. No. 1636, S-1979)

(e)Dependent The legitimate, legitimated or legally adopted child who isunmarried, not gainfully employed, and not over twenty-one years of age, orover twenty-one years of age, provided that he is congenitally incapacitated

and incapable of self-support, physically or mentally; the legitimate spousedependent for support upon the employee; and the legitimate parents whollydependent upon the covered employee for regular support. (As amended bySec. 4, R.A. 2658; Sec. 3, R.A. 4857; and Sec. 5, P.D. No. 735, S-1975)

(f) Compensation All actual remuneration for employment, including themandated cost of living allowance, as well as the cash value of anyremuneration paid in any medium other than cash except that part of theremuneration in excess of three thousand pesos received during the month.(As amended by Sec. 4, R.A. 1792; Sec. 4 R.A. 2658; Sec. 5, P.D. No. 24, S-

1972; and Sec. 3, E.O. No. 102, S-1986)

(g)Monthly salary credit The compensation base for contributions andbenefits as indicated in the schedule in section eighteen of this Act. (Asamended by Sec. 4, R.A. 2658 and Sec. 5 P.D. No. 24, S-1972)

(h)Monthly The period from one end of the last payroll period of thepreceding month to the end of the last payroll period of the current month ifcompensation is on hourly, daily or weekly basis; if on any other basis,"monthly" shall mean a period of one month.

(i) Contribution The amount paid to the SSS by the employee and by hisemployer in accordance with section eighteen of this Act. (As amended bySec. 5, P.D. No. 24, S-1972)

(j)Employment. Any service performed by an employee for his employer,except

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1. Agricultural labor when performed by a share or leasehold tenant orworker who is not paid any regular daily wage or base pay and whodoes not work for an uninterrupted period of at least six months in ayear; (As amended by Sec. 4, R.A. 2658)

2. Domestic service in a private home;

3. Employment purely casual and not for the purposes of occupation orbusiness of the employer;

4. Service performed by an individual in the employ of his son,daughter, or spouse, and service performed by a child under the age oftwenty-one years in the employ of his parents;

5. Service performed on or in connection with an alien vessel by anemployee if he is employed when such vessel is outside thePhilippines;

6. Service performed in the employ of the Philippine Government or aninstrumentality or agency thereof;

7. Service performed in the employ of a foreign government orinternational organization, or their wholly-owned instrumentality:Provided, however, That his exemption notwithstanding, any foreign

government, international organization, or their wholly-ownedinstrumentality employing workers in the Philippines or employingFilipinos outside of the Philippines may enter into an agreement withthe Philippine Government for the inclusion of such employees in theSSS except those already covered by their respective civil serviceretirement systems: Provided, further, That the terms of suchagreement shall conform with the provisions of this Act on coverageand amount of payment of contributions and benefits: Provided, finally,That the provisions of this Act shall be supplementary to any suchagreement. (As amended by Sec. 1, R.A. 3839; Sec. 3, RA 4857; and

Sec. 5, P.D. No. 735, S-1975)

8. Such other services performed by temporary employees who may beexcluded by regulation of the Commission. Employees of bona fideindependent contractors shall not be deemed employees of theemployer engaging the services of said contractors. (As amended bySec. 5, P.D. No. 735, S-1975)

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(k)Beneficiaries The dependent spouse until he remarries and dependentchildren, who shall be the primary beneficiaries. In their absence, thedependent parents and, subject to the restrictions imposed on dependentchildren, the legitimate descendents and illegitimate children who shall be thesecondary beneficiaries. In the absence of any of the foregoing, any otherperson designated by the covered employee as secondary beneficiary. (Asamended by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; Sec. 1, P.D. No. 177, S-1973; and Sec. 5, P.D. No. 735, S-1975)

(l) Contingency The retirement, death, permanent disability, injury orsickness of the covered employee. (As amended by Sec. 5, P.D. No. 735, S-1975)

(m)Average monthly salary credit The result obtained by dividing the sum of

the monthly salary credits in the sixty-month period immediately precedingthe semester of contingency by the number of months of coverage in thesame period, or the result obtained by dividing the sum of all the monthlysalary credits paid prior to the semester of contingency by the number ofcalendar months of coverage in the same period, whichever is greater:except where the month of contingency falls within eighteen months from themonth of coverage, in which case it is the result obtained by dividing the sumof all monthly salary credits paid prior to the month of contingency by the totalnumber of calendar months of coverage in the same period: Provided, Thatthe injury or sickness which caused the disability shall be deemed as the

permanent disability for the purpose of computing the average monthly salarycredit. (As amended by Sec. 3, R.A. 4857 and Sec. 5, P.D. No. 735, S-1975)

(n)Average daily salary credit The result obtained by dividing the sum of thesix highest monthly salary credits in the twelve-month period immediatelypreceding the semester of contingency by one hundred eighty. (As amendedby Sec. 3, R.A. 4857; Sec. 5, P.D. No. 735, S-1975; and Sec. 3, E.O. No.102, S-1986)

(o) Semester A period of two consecutive quarters ending in the quarter ofcontingency. (As amended by Sec. 5, P.D. No. 735, S-1975)

(p) Quarter A period of three consecutive calendar months ending on thelast day of March, June, September and December. (As amended by Sec. 3,R.A. 4857)

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(q)Replacement ratio The sum of twenty per cent and the quotient obtainedby dividing three hundred by the sum of three hundred forty and the averagemonthly salary credit. (As amended by Sec. 2, P.D. No. 1636, S-1979)

(r) Credited years of service For a member covered prior to January 1975,nineteen hundred seventy five minus the calendar year of coverage plus thenumber of calendar years in which six or more contributions have been paidfrom January 1975 up to the calendar year containing the semester prior tothe contingency. For a member covered in or after January 1975, the numberof calendar years in which six or more contributions have been paid from theyear of coverage up to the calendar year containing the semester prior to thecontingency. (As amended by Sec. 2, P.D. No. 1636, S-1979)

C. Scope of the System

SECTION 9. Compulsory coverage. (a) Coverage in the SSS shall be compulsoryupon all employees not over sixty years of age and their employers: Provided, Thatany benefit already earned by employees under private benefit plans existing at thetime of the approval of this Act shall not be discontinued, reduced or otherwiseimpaired: Provided, further, That private plans which are existing and in force at thetime of compulsory coverage shall be integrated with the plan of the SSS in such away where the employer's contribution to his private plan is more that that required

of him in this Act he shall pay to the SSS only the contribution required of him andhe shall continue his contribution to such private plan less his contribution to theSSS so that the employer's total contribution to his private benefit plan and to theSocial Security System shall be the same as his contribution to his private benefitplan before the compulsory coverage: Provided, further, That any changes,adjustments, modifications, eliminations or improvements in the benefits to beavailable under the remaining private plan, which may be necessary to adopt byreason of the reduced contribution thereto as a result of the integration, shall besubject to agreements between the employers and employees concerned:Provided, further, That the private benefit plan which the employer shall continuefor his employees shall remain under the employer's management and controlunless there is an existing agreement to the contrary: Provided, finally, Thatnothing in this Act shall be construed as a limitation on the right of employers andemployees to agree on and adopt benefits which are over and above thoseprovided under this Act. (As amended by Sec. 5, R.A. 1972; Sec. 5, R.A. 2658; andSec. 2, R.A. 3839)

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(b) Filipinos recruited in the Philippines by foreign-based employers for employmentabroad may be covered by the SSS on a voluntary basis. (As amended by Sec. 2,P.D. No. 177, S-1973 and Sec. 6, P.D. No. 735, S-1975)

SECTION 9-A. Compulsory Coverage of the Self-employed. Coverage in the SSSshall also be compulsory upon all self-employed persons earning P1,800 or moreper annum: Provided, That the effectivity of coverage of certain groups of self-employed shall be determined by the Commission under such rules and regulationsit may prescribe: Provided, further, That the effectivity of the coverage of thefollowing self-employed persons shall be in accordance with section ten (b) hereof:

1. All self-employed professionals licensed by the Professional RegulationsCommission or those licensed to practice law.

2. Partners and single proprietors of businesses.

3. Actors and actresses, directors, scriptwriters and news correspondentswho do not fall within the definition of the term "employee" in section eight (d)of this Act.

4. Professionals athletes, coaches, trainers licensed by the Games andAmusement Board as well as jockeys and trainers licensed by the PhilippineRacing Commission.

Unless otherwise specified herein, all provisions of the SSS Law applicable tocovered employees shall also be applicable to the covered self-employed persons.(As amended by Sec. 3, P.D. No. 1636, S-1979)

SECTION 10.Effective Date of Coverage. Compulsory coverage of the employershall take effect on the first day of his operation and that of the employee on theday of his employment: Provided, That the compulsory coverage of self-employedpersons referred to in paragraphs (1) to (4) shall take effect on the first day ofJanuary following the calendar year they started the practice of their profession orbusiness operations but in no case earlier than January 1, 1980. (As amended by

Sec. 6, R.A. 1972; Sec. 6, R.A. 2658; and Sec. 4, P.D. No. 1636, S-1979)

SECTION 11.Effect of Separation from Employment. When an employee undercompulsory coverage is separated from employment, his employer's contributionon his account and his obligation to pay contributions arising from that employmentshall cease at the end of the month of separation, but said employee shall becredited with all contributions paid on his behalf and entitled to benefits according

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to the provisions of this Act. He may, however, continue to pay the totalcontributions to maintain his right to full benefit. (As amended by Sec. 4, R.A. 4857and Sec. 7, P.D. No. 735, S-1975)

SECTION 11-A.Effect of Interruption of Business or Professional Income. If theself-employed realizes no net professional or business income in any calendaryear, he shall not be required to pay contributions for the succeeding year. He may,however, be allowed to continue paying contributions under the same rules andregulations applicable to separated covered employees. (As amended by Sec. 5,P.D. No. 1636, S-1979)

D. Benefits

SECTION 12.Monthly Pension. (a) The monthly pension shall be the sum of thefollowing:

The average monthly salary credit multiplied by the replacement ratio; and

One and a half per cent of the average monthly salary credit for each credited yearof service in excess of ten years.

(b) The monthly pension shall in no case be less than two hundred pesos nor paid

in an aggregate amount of less than sixty times the monthly pension except to asecondary beneficiary: Provided, That the monthly pension of surviving pensionersas of December 31, 1986 shall be increased by twenty per cent. (As amended bySec. 7, R.A. 1792; Sec. 7, R.A. 2658; Sec. 5, R.A. 4857; Sec. 6, P.D. No. 24, S-1972; Sec. 3, P.D. No. 177, S-1973; Sec. 8, P.D. No. 735, S-1975; Sec. 2, P.D. No.1202, S-1977; Sec. 6, P.D. No. 1636, S-1979; Sec. 1, E.O. No. 28, S-1986; andSec. 4, E.O. No. 102, S-1986)

SECTION 12-A.Dependents' Pension. The dependents' pension shall beequivalent to ten per cent of the monthly pension for each dependent child but not

exceeding five, beginning with the youngest and without substitution. (As amendedby Sec. 3, P.D. No. 1202, S-1977)

SECTION 12-B.Retirement Benefits. (a) A covered employee who has paid atleast one hundred twenty monthly contributions prior to the semester of retirement;and who (1) has reached the age of sixty years and is not receiving monthlycompensation of at least three hundred pesos or (2) has reached the age of sixty-

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five years, shall be entitled for as long as he lives to the monthly pension: Provided,That his dependents born before his retirement of a marriage subsisting when hewas fifty-seven years old shall be entitled to the dependents' pension. (As amendedby Sec. 4, P.D. No. 1202, S-1977)

(b) A covered member who is sixty years old at retirement and who does not qualifyfor pension benefits under paragraph (a) above, shall be entitled to a lump sumbenefit equal to the total contributions paid by him and on his behalf: Provided,That he is separated from employment and is not continuing payment ofcontributions to the SSS on his own.

(c) The monthly pension shall be reduced upon the re-employment of a retiredemployee who is less than sixty-five years old by an amount equivalent to one-halfhis earnings over three hundred pesos. He shall again be subject to section

eighteen and his employer to section nineteen of this Act. (As amended by Sec. 7,R.A. 1792; Sec. 7, R.A. 2658; Sec. 6, P.D. No. 24, S-1972; Sec. 3, P.D. No. 177, S-1973; Sec. 8, P.D. No. 735; S-1975; Sec. 4, P.D. No. 1202, S-1977; and Sec. 7,P.D. No. 1636, S-1979)

(d) Upon the death of the retired employee pensioner, his primary beneficiaries asof the date of his retirement shall be entitled to eighty per cent of the monthlypension and his dependents to the dependents' pension: Provided, That if he hasno primary beneficiaries and he dies within sixty months from the start of hismonthly pension, his secondary beneficiaries shall be entitled to a lump sum

benefit equivalent to the bigger of (1) twenty times the monthly pension or (2) thedifference of sixty times the monthly pension and the total monthly pensions paidby the SSS excluding the dependents' pension. (As amended by Sec. 7, P.D. No.1636, S-1979 and E.O. No. 102, S-1986)

SECTION 13.Death Benefits. Upon the covered employee's death, his primarybeneficiaries shall be entitled to the monthly pension and his dependents to thedependents' pension: Provided, That he has paid at least thirty-six monthlycontributions prior to the semester of death: Provided, further, That if the foregoingcondition is not satisfied his primary beneficiaries shall be entitled to a lump sumbenefit equivalent to thirty-five times the monthly pension: Provided, further, That ifhe has no primary beneficiaries, his secondary beneficiaries shall be entitled to alump sum benefit equivalent to twenty times the monthly pension: Provided,however, That the minimum death benefit shall not be less than the total

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contributions paid by him and his employer on his behalf nor less than onethousand pesos: Provided, finally, That the beneficiaries of the covered employeewho dies without having paid at least three monthly contributions shall be entitled tothe minimum benefit. (As amended by Sec. 5, P.D. No. 1202, S-1977 and Sec. 8,P.D. No. 1636, S-1979)

SECTION 13-A.Permanent disability benefits. (a) Upon the covered employee'spermanent total disability, if such disability occurs after he had paid at least thirty-six monthly contributions prior to the semester of disability, he shall be entitled tothe monthly pension and his dependents to the dependents' Pension: Provided,That if the disability occurs before he has paid thirty-six monthly contributions priorto the semester of disability, he shall be entitled to a lump sum benefit equivalent to

thirty-five times the monthly pension: Provided, further, That the minimum disabilitybenefit shall not be less than the total contributions paid by him and his employeron his behalf nor less than one thousand pesos: Provided, further, That a coveredemployee who becomes permanently totally disabled without having paid at leastthree monthly contributions shall be entitled to the minimum benefit: Provided,finally, That a member who (1) received a lump sum benefit and (2) is re-employednot earlier than one year from date of his disability shall again be subject tocompulsory coverage and considered a new member. (As amended by Sec. 6, P.D.No. 1202, S-1977)

(b) The monthly pension shall be reduced upon his re-employment by an amountequivalent to one-half of his earnings over three hundred pesos. The monthlypension and dependents' pension shall be suspended upon his recovery from thepermanent total disability, or his failure to present himself for examination at leastonce a year upon notice by the SSS. (As amended by Sec. 6, P.D. No. 1202, S-1977 and Sec. 9, P.D. No. 1636, S-1979)

(c) Upon the death of the permanent total disability pensioner, his primarybeneficiaries as of the date of disability shall be entitled to eighty per cent of themonthly pension and his dependents to the dependents' pension: Provided, That ifhe has no primary beneficiaries and he dies within sixty months from the start of hismonthly pension, his secondary beneficiaries shall be entitled to a lump sumbenefit equivalent to the bigger of (1) twenty times the monthly pension or (2) thedifference of sixty times the monthly pension and the total monthly pensions paidby the SSS excluding the dependents' pension. (As amended by Sec. 9, P.D. No.1636, S-1979 and Sec. 6, E.O. No. 102, S-1986)

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(d) The following disabilities shall be deemed permanent total:

1. Complete loss of sight of both eyes;

2. Loss of two limbs at or above the ankle or wrists;

3. Permanent complete paralysis of two limbs;

4. Brain injury resulting to incurable imbecility or insanity; and,

5. Such cases as determined and approved by the SSS.

(As amended by Sec. 9, P.D. No. 1636, S-1979)

(e) If the disability is permanent partial, and such disability occurs before thirty-six

monthly contributions have been paid prior to the semester of disability, the benefitshall be such percentage of the lump sum benefit described in the precedingparagraph with due regard to the degree of disability as the Commission maydetermine. (As amended by Sec. 9, P.D. No. 1636, S-1979)

(f) If the disability is permanent partial and such disability occurs after thirty-sixmonthly contributions have been paid prior to the semester of disability, the benefitshall be the monthly pension for permanent total disability payable not longer thanthe period designated in the following schedule:

Complete andpermanent loss of

use of

Numberof Months

One thumb

10

One index finger 8

One middle finger 6

One right finger

5

One little finger 3

One big toe

6

One hand

39

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One arm 50

One foot

31

One leg

46

One ear 10

Both ears

20

Hearing of one ear

10

Hearing of bothears

20

Sight of one eye 25

(As amended by Sec. 10, P.D. No. 735, S-1975 and Sec. 9, P.D. No. 1636, S-1979)

(g) The percentage degree of disability, which is equivalent to the ratio that thedesignated number of months of compensability bears to seventy-five, rounded tothe next higher integer, shall not be additive for distinct, separate and unrelatedpermanent partial disabilities, but shall be additive for deteriorating and relatedpermanent partial disabilities, to a maximum of one hundred per cent, in which casethe employee shall be deemed as permanently totally disabled. (As amended bySec. 9, P.D. No. 1636, S-1979)

SECTION 13-B.Funeral Benefit. A funeral grant of two thousand pesos shall bepaid to help defray the cost of funeral expenses upon the death of a coveredmember, permanently totally disabled employee or retiree. (As amended by Sec.11, P.D. No. 735, S-1975; Sec. 2, E.O. No. 28, S-1986; and Sec. 7, E.O. No. 102,S-1986)

SECTION 14. Sickness Benefit. (a) A covered employee who has paid at leastthree monthly contributions in the twelve-month period immediately preceding thesemester of sickness and is confined for more than three days in a hospital orelsewhere with the Commission's approval, shall, for each day of compensable

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confinement or fraction thereof, be paid by his employer, or the SSS, if such personis unemployed, an allowance equivalent to ninety per cent of his average dailysalary credit, subject to the following conditions: (As amended by Sec. 3, E.O. No.28, S-1986)

(1) In no case shall the total amount of such daily allowance be less thanseven pesos and fifty centavos nor exceed seventy-five pesos nor paidlonger than one hundred twenty days in one calendar year; nor shall anyunused portion of the one hundred twenty days of sickness benefit grantedunder this section be carried forward and added to the total number ofcompensable days allowable in the subsequent year; (As amended by Sec.3, E.O. No. 28, S-1986 and Sec. 8, E.O. No. 102, S-1986)

(2) No employee shall be paid any sickness benefit for more than two

hundred forty days on account of the same confinement; and

(3) The employee shall notify his employer of the fact of his sickness or injurywithin five calendar days after the start of his confinement unless suchconfinement is in a hospital or the employee became sick or was injuredwhile working or within the premises of the employer in which casenotification to the employer is not necessary: Provided, That if the member isunemployed he shall directly notify the SSS of his confinement within fivecalendar days after the start thereof unless such confinement is in a hospitalin which case notification is also not necessary: Provided, further, That in

cases where notification is necessary, the confinement shall be deemed tohave started not earlier than the fifth day immediately preceding the date ofnotification. (As amended by Sec. 9, R.A. 2658; Sec. 7, R.A. 4857; Sec. 8,P.D. No. 24, S-1972; Sec. 12, P.D. No. 735, S-1975; and Sec. 10, P.D. No.1636, S-1979)

(b) The compensable confinement shall begin on the first day of sickness, and thepayment of such allowances shall be promptly made by the employer every regularpayday or on the fifteenth and last day of each month, and similarly in the case ofdirect payment by the SSS, for as long as such allowances are due and payable:Provided, That such allowance shall begin only after all sick leaves of absence withfull pay to the credit of the employee shall have been exhausted. (As amended bySec. 9, R.A. 2658; Sec. 7, R.A. 4857; Sec. 8, P.D. No. 24, S-1972; Sec. 5, P.D. No.177, S-1973; and Sec. 14, P.D. No. 735, S-1975)

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(c) One hundred per cent of the daily benefits provided in the preceding paragraphshall be reimbursed by the SSS to said employer upon receipt of satisfactory proofof such payment and legality thereof: Provided, That the employer has notified theSSS of the confinement within five calendar days after receipt of the notificationfrom the employee: Provided, further, That if the notification to the SSS is made bythe employer beyond five calendar days after receipt of the notification from theemployee, said employer shall be reimbursed only for each day of confinementstarting from the tenth calendar day immediately preceding the date of notificationto the SSS: Provided, finally, That the SSS shall reimburse the employer or pay theunemployed member only for confinement within the one year period immediatelypreceding the date the claim for benefit or reimbursement is received by the SSS,except confinement in a hospital in which case the claim for benefit orreimbursement must be filed within one year from the last day of confinement. (Asamended by Sec. 9, R.A. 2658; Sec. 1, R.A. 4482; Sec. 7, R.A. 4857; and Sec. 8,

P.D. No. 24, S-1972)

(d) Where the employee has given the required notification but the employer fails tonotify the SSS of the confinement or to file the claim for reimbursement within theperiod prescribed in this section resulting in the reduction of the benefit or denial ofthe claim such employer shall have no right to recover the corresponding dailyallowance he advanced to the employee as required in this section. (As amendedby Sec. 8, P.D. No. 24, S-1972 and Sec. 12, P.D. No. 735, S-1972)

(e) The claim of reimbursement shall be adjudicated by the SSS within a period of

two months from receipt thereof; Provided, That should no payment be received bythe employer within one month after the period prescribed herein for adjudicationthe reimbursement shall thereafter earn simple interest of one per cent per monthuntil paid. (As amended by Sec. 8, P.D. No. 24, S-1972)

(f) The provisions regarding the notification required of the covered employee andthe employer as well as the period within which the claim for benefit orreimbursement may be filed shall apply to all claims filed with the SSS beginningJanuary 1, 1973. (As amended by Sec. 8, P.D. No. 24, S-1972)

SECTION 14-A.Maternity Leave Benefit. A covered female employee who haspaid at least three monthly maternity contributions in the twelve-month periodpreceding the semester of her childbirth, abortion, or miscarriage and who iscurrently employed shall be paid a daily maternity benefit equivalent to one

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hundred per cent of her present basic salary, allowances and other benefits or thecash equivalents of such benefits for sixty days subject to the following conditions:

(a) That the employee shall have notified her employer of her pregnancy andthe probable date of her childbirth which notice shall be transmitted to theSSS in accordance with the rules and regulations it may provide;

(b) That the payment shall be advanced by the employer in two equalinstallments within thirty days from the filing of the maternity leaveapplication;

(c) That in case of caesarian delivery, the employees shall be paid the dailymaternity benefit for seventy-eight days;

(d) That payment of daily maternity benefits shall be a bar to the recovery ofsickness benefits provided by this Act for the same compensable period ofsixty days for the same childbirth, abortion, or miscarriage;

(e) That the maternity benefits provided under this section shall be paid onlyfor the first four deliveries after March 13, 1973;

(f) That the SSS shall immediately reimburse the employer of one hundredper cent of the amount of maternity benefits advanced to the employee by theemployer upon receipt of satisfactory proof of such payment and legality

thereof; and

(g) That if an employee should give birth or suffer abortion or miscarriagewithout the required contributions having been remitted for her by heremployer to the SSS, or without the latter having been previously notified bythe employer of time of the pregnancy, the employer shall pay to the SSSdamages equivalent to the benefits which said employee would otherwisehave been entitled to, and the SSS shall in turn pay such amount to theemployee concerned. (As amended by Sec. 7, P.D. No. 1202, S-1977; Sec.11, P.D. No. 1636, S-1979; and R.A. 7322)

SECTION 15.Non-transferability of Benefits. The SSS shall pay the benefitsprovided for in this Act to such persons as may be entitled thereto in accordancewith the provisions of this Act: Provided, That the beneficiary who is a national of aforeign country which does not extend benefits to a Filipino beneficiary residing in

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the Philippines, or which is not recognized by the Philippines, shall not be entitledto receive any benefit under this Act: Provided, further, That notwithstanding theforegoing, where the best interest of the SSS will be served, the Commission maydirect payments without regard to nationality or country of residence: Provided,further, That if the recipient is a minor or a person incapable of administering hisown affairs, the Commission shall appoint a representative under such terms andconditions as it may deem proper: Provided, further, That such appointment shallnot be necessary in case the recipient is under the custody of or living with theparents or spouse of the employee in which case the benefits shall be paid to suchparents or spouse, as representative payee of the recipient. Such benefits are nottransferrable and no power of attorney or other document executed by thoseentitled thereto, in favor of any agent, attorney, or any other person for thecollection thereof on their behalf shall be recognized, except when they arephysically unable to collect personally such benefits: Provided, further, That in case

of death benefits, if no beneficiary qualifies under this Act, said benefits shall bepaid to the legal heirs in accordance with the law of succession: Provided, finally,That notwithstanding any law to the contrary, the payment of benefits under this Actshall bar the recovery of similar benefits under Title II of Book IV of the Labor Codeof the Philippines, as amended, during the period of such payment for the samecontingency, and conversely. (As amended by Sec. 10, R.A. 2658; Sec. 4, R.A.3839; Sec. 8, R.A. 4857; Sec. 8-A, P.D. No. 24, S-1972; and Sec. 13, P.D. No.735, S-1975)

SECTION 16.Exemption from Tax, Legal Process and Lien. All laws to the contrarynotwithstanding the SSS and all its assets and properties, all contributionscollected and all accruals thereto and income or investment earnings therefrom aswell as all supplies, equipment, papers or documents which may be required inconnection with the operation or execution of this Act shall be exempt from any tax,assessment, fee, charge, or customs or import duty; and all benefit payments madeby the SSS shall likewise be exempt from all kinds of taxes, fees or charges, andshall not be liable to attachments, garnishments, levy or seizure by or under any

legal or equitable process whatsoever, either before or after receipt by the personor persons entitled thereto, except to pay any debt of the covered employee to theSSS. No tax measure hereafter enacted shall apply to the SSS, unless it expresslyrevokes the declared policy of the State in section two hereof granting tax-exemption to the SSS. Any tax assessment against, and still unpaid by the SSSshall be null and void. (As amended by Sec. 9, P.D. No. 24, S-1972 and Sec. 14,P.D. No. 735, S-1975)

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SECTION 17.Fee of Agents, Attorneys, etc. No agent, attorney or other person incharge of the preparation, filing or pursuing any claim for benefit under this Actshall demand or charge for his services any fee, and any stipulation to the contraryshall be null and void. The retention or deduction of any amount from any benefitgranted under this Act for the payment of fees for such services is prohibited:Provided, however, That any member of the Philippine Bar who appears ascounsel in any case heard by the Social Security Commission shall be entitled toattorney's fees not exceeding ten per cent of the benefits awarded by theCommission, which fees shall not be payable before the actual payment of thebenefits, and any stipulation to the contrary shall be null and void.

Any violation of the provisions of this Section shall be punished by a fine of not lessthan five hundred pesos nor more than five thousand pesos, or imprisonment fornot less than six months nor more than one year, or both, at the discretion of the

court. (As amended by Sec. 4, P.D. No. 347, S-1973 and Sec. 8, P.D. No. 1202, S-1977)

E. Sources of Funds Employment Records and Reports

SECTION 18.Employee's Contribution. (a) Beginning as of the last day of thecalendar month when an employee's compulsory coverage takes effect and everymonth thereafter during his employment, the employer shall deduct and withhold

from such employee's monthly salary, wage, compensation or earnings, theemployee's contribution in an amount corresponding to his salary, wage,compensation or earnings during the month in accordance with the followingschedule effective on January 1, 1987:

SalaryBracketNumber

Range ofCompensation

MonthlySalaryCredit

Monthly Contribution

EmployerEmployee Total

I P 1 - 149.99 P

125.00

P 6.40 P 4.10 P

10.50II 150 - 199.99 175 9 5.7 14.7

III

200 - 249.99

225

11.4

7.5

18.9

IV 250 - 349.99 300 15.2 10 25.2

V 350 - 499.99 425 21.6 14.1 35.7

VI

500 - 699.99

600

30.4

20

50.4

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VII

700 - 899.99

800

40.5

26.7

67.2

VIII 900 - 1099.991,000.00 50.7 33.3 84

IX

1100 -1399.99

1,250.00

63.3

41.7

105

X

1400 -1749.99

1,500.00

76

50

126

XI 1750 -2249.99

2,000.00 101.3 66.7 168

XII 2250 -2749.99

2,500.00 126.7 83.3 210

XIII 2750 - OVER 3,000.00 152 100 252

The tabulated schedule for the monthly contribution of the self-employed and

voluntary members effective January 1, 1987 shall be as follows:

SalaryBracketNumber

Range ofcompensation

MonthlySalaryCredit

MonthlyContribution

I P 1 - 149.99 P 125.00 P 10.00

II

150 - 199.99

175

14

III 200 - 249.99 225 18

IV 250 - 349.99 300 24

V

350 - 499.99

425

34

VI 500 - 699.99 600 48

VII

700 - 899.99

800

64

VIII 900 -1,099.99

1,000.00 80

IX 1,100 -1,399.99

1,250.00 100

X

1,400 -

1,749.99

1,500.00

120

XI

1,750 -2,249.99

2,000.00

160

XII

2,250 -2,749.99

2,500.00

200

XIII

2,750 - OVER

3,000.00

240

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The maximum covered earnings or compensation of all SSS members shall belimited to three thousand pesos per month as provided in the foregoing schedulesunless otherwise provided by the Social Security Commission through rules andregulations taking into consideration actual calculations and rate of benefits. (Asamended by Sec. 10, R.A. 1792; Sec. 11, R.A. 2658; Sec. 10, P.D. No. 24, S-1972;and Sec. 9, P.D. No. 1202, S-1986)

(b) Every employer shall issue a receipt for all contributions deducted from theemployee's compensation or shall indicate such deductions on the employee's payenvelopes. (As amended by Sec. 12, P.D. No. 1636, S-1979)

SECTION 19.Employer's Contributions. (a) Beginning as of the last day of the

month when an employee's compulsory coverage takes effect and every monththereafter during his employment, his employer shall pay, with respect to suchcovered employee, the employer's contribution in accordance with the scheduleindicated in section eighteen of this Act. Notwithstanding any contract to thecontrary, an employer shall not deduct, directly or indirectly, from the compensationof his employees covered by the SSS or otherwise recover from them theemployer's contributions with respect to such employees.

(b) The remittance of such contributions by the employer shall be supported by aquarterly collection list to be submitted to the SSS at the end of each calendar

quarter indicating the correct ID number of the employer, the correct names and SSnumbers of the employees and the total contributions paid for their account duringthe quarter. (As amended by Sec. 13, P.D. No. 1636, S-1979)

SECTION 19-A. Contributions of the Self-employed. The contributions to the SSSof the self-employed shall be determined in accordance with section eighteen ofthis Act: Provided, That the average monthly net earnings declared by the self-employed at the time of his registration with the SSS shall be considered as his

monthly compensation and he shall pay both the employer and employeecontributions.

Net earnings as understood under this section shall be the net income from hisbusiness or profession as reflected in the income tax return for the immediatelypreceding year, excluding rental income, dividend, interest investments and the like

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or all types of incomes which are not derived from his business registered with theSSS or from the practice of his profession.

The average monthly net earnings declared by the self-employed member at thetime of his registration shall remain the basis of his monthly salary credit, unless hemakes, at the start of the year, another declaration of his average monthly netearnings based on his income tax returns for the immediately preceding year, inwhich case such latest declaration becomes the new basis of his monthly salarycredit. (As amended by Sec. 14, P.D. No. 1636, S-1979)

SECTION 20. Government Contribution. As the contribution of the Government tothe operation of the System, the Congress shall annually appropriate out of any

funds in the National Treasury not otherwise appropriated, the necessary sum orsums to meet the estimated expenses of the System for each ensuing year. Inaddition to this contribution, the Congress shall appropriate from time to time suchsum or sums as may be needed to assure the maintenance of an adequateworking balance of the funds of the System as disclosed by suitable periodicactuarial studies to be made of the operations of the System.

SECTION 21. Government Guarantee. The benefits prescribed in this Act shall not

be diminished and to guarantee said benefits the Government of the Republic ofthe Philippines accepts general responsibility for the solvency of the System. (Asamended by Sec. 13, R.A. 1792)

SECTION 22.Remittance of Contributions. (a) The contribution imposed in thepreceding section shall be remitted to the SSS within the first seven days of eachcalendar month following the month for which they are applicable or within suchtime as the Commission may prescribe. Every employer required to deduct and to

remit such contributions shall be liable for their payment and if any contribution isnot paid to the SSS as herein prescribed, he shall pay besides the contribution apenalty thereon of three per cent per month from the date the contribution falls dueuntil paid. If deemed expedient and advisable by the Commission, the collectionand remittance of contributions shall be made quarterly or semi-annually inadvance, the contributions payable by the employees to be advanced by theirrespective employers: Provided, That upon separation of an employee, any

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contribution so paid in advance but not due shall be credited or refunded to hisemployer. (As amended by Sec. 12, P.D. No. 24, S-1972)

(b) The contributions payable under this Act in cases where an employer refuses orneglects to pay the same shall be collected by the SSS in the same manner astaxes are made collectible under the National Internal Revenue Code, as amended.Failure or refusal of the employer to pay or remit the contributions herein prescribedshall not prejudice the right of the covered employee to the benefits of thecoverage.

The right to institute the necessary action against the employer may becommenced within twenty years from the time the delinquency is known or theassessment is made by the SSS, or from the time the benefit accrues, as the casemay be. (As amended by Sec. 15, P.D. No. 1636, S-1979)

(c) Should any person, natural or juridical, default in any payment of contributions,the Commission may also collect the same in either of the following ways:

(1) By an action in court, which shall hear and dispose of the case inpreference to any other civil action, or

(2) By issuing a warrant to the Sheriff of any province or city commanding himto levy upon and sell any real and personal property of the debtor. TheSheriff's sale by virtue of said warrant shall be governed by the same

procedure prescribed for executions against property upon judgments by acourt of record.

(d) The last complete record of monthly contributions paid by the employer or theaverage of the monthly contributions paid during the past three years as of the dateof filing of the action for collection shall be presumed to be the monthlycontributions payable by and due from the employer to the SSS for each of theunpaid month, unless contradicted and overcome by other evidence: Provided,That the SSS shall not be barred from determining and collecting the true andcorrect contributions due the SSS even after full payment pursuant to this

paragraph, nor shall the employer be relieved of his liability under section twenty-eight of this Act. (As amended by Sec. 12, P.D. No. 24, S-1972 and Sec. 11, P.D.No. 1202, S-1977)

(e) For purposes of this Section, any employer who is delinquent or has notremitted all the monthly contributions due and payable may within six months fromthe issuance of this Executive Order remit said contributions to the SSS and submit

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the corresponding collection lists herefore without incurring the prescribed three percent penalty. In case the employer fails to remit to the SSS the said contributionswithin the six months grace period, the penalty of three per cent shall be imposedfrom the time the contributions first became due as provided in paragraph (a) of thissection. (As amended by Sec. 12, P.D. No. 24, S-1972; Sec. 6, P.D. No. 177, S-1973; and Sec. 4, E.O. No. 28, S-1986)

SECTION 22-A.Remittance of Contributions of Self-employed. Self-employedmembers shall remit their monthly contributions quarterly on such dates andschedules, as the Commission may specify through rules and regulations.

The penalty of three per cent per month for late payments provided for in

paragraph (a) of section twenty-two of this Act and the manner of collection ofcontributions specified in paragraphs (b), (c) and (d) of section twenty-two of thisAct are also applicable to the collection of penalties and contributions of thecovered self-employed. (As amended by Sec. 16, P.D. No. 1636, S-1979)

SECTION 23.Method of Collection and Payment. The SSS shall require acomplete and proper collection and payment of contributions and properidentification of the employer and the employee. Payment may be made in cash,

checks, stamp, coupons, tickets, or other reasonable devices that the Commissionmay adopt. (As amended by Sec. 15, P.D. No. 735, S-1975)

SECTION 24.Employment Records and Reports. (a) Each employer shallimmediately report to the SSS the names, ages, civil status, occupations, salariesand dependents of all his employees who are subject to compulsory coverage:Provided, That if an employee subject to compulsory coverage should die orbecome sick or disabled or reach the age of sixty without the SSS having

previously received any report or written communication about him from hisemployer or a contribution paid in his name by his employer, the said employershall pay to the SSS the damages equivalent to the benefits to which saidemployee would have been entitled had his name been reported on time by theemployer to the SSS, except that in case of pension benefits, the employer shall beliable to pay the SSS damages equivalent to five year's monthly pension; includingdependents' pension: Provided, further, That if the contingency occurs within thirty

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days from the date of employment, the employer shall be relieved of his liability fordamages. (As amended by Sec. 15, R.A. 1792; Sec. 9, R.A. 4857; Sec. 13, P.D.No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and Sec. 12, P.D. No. 1202, S-1977)

(b) Should the employer misrepresent the true date of employment of hisemployees or remit to the SSS contributions which are less than those required inthis Act, resulting in a reduction of benefits, the employer shall pay to the SSSdamages to the extent of such reduction. (As amended by Sec. 13, P.D. No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and Sec. 17, P.D. No. 1636, S-1979)

In addition to the liability mentioned in the preceding paragraphs (a) and (b) hereof,the employer shall also be liable for the payment of the corresponding unremittedcontributions and penalties thereon. (As amended by Sec. 17, P.D. No. 1636, S-

1979)

(c) The records and reports duly accomplished and submitted to the SSS by theemployee or the employer, as the case may be, shall be kept confidential by theSSS except in compliance with a subpoena duces tecum issued by the Courts,shall not be divulged without the consent of the Administrator or any official of theSSS duly authorized by him, shall be presumed correct as to the data and othermatters stated therein, unless the necessary corrections to such records andreports have been properly made by the parties concerned before the right to thebenefit being claimed accrues, and shall be made the basis for the adjudication of

the claim. If as a result of such adjudication the SSS in good faith pays a monthlypension to a beneficiary who is inferior in right to another beneficiary or with whomanother beneficiary is entitled to share, such payments shall discharge the SSSfrom liability, unless and until such other beneficiary notifies the SSS of his claimprior to the payments. (As amended by Sec. 13, P.D. No. 24, S-1972 and Sec. 16,P.D. No. 735, S-1975)

(d) Every employer shall keep true and accurate work records for such period andcontaining such information as the Commission may prescribe, in addition to an"Annual Register of New and Separated Employees" which shall be secured fromthe SSS wherein the employer shall enter on the first day of employment or on theeffective date of separation, the names of the persons employed or separated fromemployment, their SSS numbers, and such other data that the Commission mayrequire and said annual register shall be submitted to the SSS in the month ofJanuary of each year. Such records shall be open for inspection by the SSS or itsauthorized representatives quarterly or as often as the SSS may require.

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The SSS may also require each employer to submit, with respect to the persons inhis employ, reports needed for the effective administration of this Act. (As amendedby Sec. 13, P.D. No. 24, S-1972)

(e) Effective July 1, 1973, each employer shall require as a condition toemployment, the presentation of a registration number secured by the prospectiveemployee from the SSS in accordance with such procedure as the SSS may adopt:Provided, That in case of employees who have earlier been assigned registrationnumbers by virtue of a previous employment, such numbers originally assigned tothem should be used for purposes of this section: Provided, further, That theissuance of such registration numbers by the SSS shall not exempt the employerfrom complying with the provisions of paragraph (a) of this section. (As amended bySec. 13, P.D. No. 24, S-1972)

(f) Notwithstanding any law to the contrary, microfilm copies of original SSS recordsand reports, duly certified by the official custodian thereof, shall have evidentiaryvalue as the originals and be admissible as evidence in all legal proceedings. (Asamended by Sec. 16, P.D. No. 735, S-1975)

SECTION 24-A.Report and Registration of the Self-employed. Each covered self-employed person shall, within thirty days from the effective date of coverage, reportto the SSS his name, age, civil status, and occupation, average monthly net

income and his dependents: Provided, That if after said period of thirty days, heshould die or become sick, or disabled or reach the age of sixty without the SSShaving previously received such report, the SSS shall not pay him thecorresponding benefit. (As amended by Sec. 18, P.D. No. 1636, S-1979)

F. Funds of the System

SECTION 25.Deposit and Disbursements. All moneys paid to or collected by the

SSS every year under this Act, and all accruals thereto shall be deposited,administered and disbursed in the same manner and under the same conditionsand requirements as provided by law for other public special funds: Provided, Thatnot more than twelve per cent of the total yearly contributions plus three per cent ofother revenues shall be disbursed for salaries and wages, purchases of officeequipment and materials, operational expenses and the maintenance of regionaloffices of the SSS: Provided, further, That if the expenses in any year are less than

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the maximum amount permissible, the difference shall not be availed of asadditional expenses in the following years. (As amended by Sec. 16, R.A. 2658;Sec. 5, R.A. 3839; Sec. 10, R.A. 4857; Sec. 13-A, P.D. No. 24, S-1972; Sec. 17,P.D. No. 735, S-1975; and Sec. 10, E.O. No. 102, S-1986)

SECTION 26.Investment of Reserve Funds. All revenues of the SSS that are notneeded to meet the current administrative and operational expenses incidental tothe carrying out of this Act shall be accumulated in a fund to be known as the'Reserve Fund'. Such portions of the Reserve Fund as are not needed to meet thecurrent benefit obligations thereof shall be invested to earn an average annualincome of at least nine per cent and shall be known as the 'Investment ReserveFund' which shall be invested in any or all of the following: (As amended by Sec.

14, P.D. No. 24, S-1972; Sec. 19, P.D. No. 1636, S-1979; and Sec. 11, E.O. No.102, S-1986)

(a) In interest-bearing bonds or securities of the Government of thePhilippines, or bonds or securities for the payment of the interest andprincipal to which the faith and credit of the Republic of the Philippines ispledged.

(b) In interest-bearing deposits or securities in any domestic bank doingbusiness in the Philippines: Provided, That such deposits shall not exceed at

any time the unimpaired capital and surplus or total private deposits of thedepository bank, whichever is smaller: Provided, further, That said bank shallfirst have been designated as the depository for this purpose by the MonetaryBoard of the Bangko Sentral ng Pilipinas: Provided, finally, That suchinvestment in deposits or securities shall be equitably distributed to alldesignated banks. (As amended by Sec. 14, P.D. No. 24, S-1972)

(c) In loans or interest-bearing advances to the National Government for theconstruction of permanent toll bridges, toll roads or government officebuildings in accordance with actuarial considerations and the conditionsprescribed by law in such cases: Provided, That the tolls shall be collected bythe SSS for a reasonable fee. (As amended by Sec. 14, P.D. No. 24, S-1972)

(d) In direct housing loans to covered employees and group housing projectsgiving priority to the low-income groups, up to a maximum of ninety per centof the appraised value of the properties to be mortgaged by the borrowersand in loans for the construction and the maintenance of hospitals and

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institutions for the sick, aged and infirmed members and their families,referred to in section 4 (j) of this Act: Provided, That such investment shall notexceed thirty per cent of the Investment Reserve Fund. (As amended by Sec.15, R.A. 2658; Sec. 14, P.D. No. 24, S-1972; Sec. 18, P.D. No. 735, S-1975;and Sec. 11, E.O. No. 102, S-1986)

(e) In short and medium term loans to covered employees such as salary,educational, calamity and emergency loans: Provided, That not more than tenper cent of the Investment Reserve Fund at any time shall be invested for thispurpose. (As amended by Sec. 15, R.A. 2658; Sec. 14, P.D. No. 24, S-1972;and Sec. 11, E.O. No. 102, S-1986)

(f) In other income earning projects and investments secured by firstmortgages on real estate collaterals which, in the determination of the

Commission, shall redound to the benefit of the SSS, its members, as well asthe public welfare: Provided, That any such investment shall be made withdue diligence and prudence to earn the highest possible interest consistentwith safety. (As amended by Sec. 17, R.A. 1792; Sec. 11, R.A. 4857; andSec. 14, P.D. No. 24, S-1972)

(g) As part of its investment operations, the SSS shall act as insurer of all orpart of its interests on SSS properties mortgaged to the SSS, or lives ofmortgagors whose properties are mortgaged to the SSS. For this purpose,the SSS shall establish a separate account to be known as the "Mortgagors'

Insurance Account." All amounts received by the SSS in connection with theaforesaid insurance operations shall be placed in the Mortgagors' InsuranceAccount. The assets and liabilities of the Mortgagors' Insurance Account shallat all times be clearly identifiable and distinguishable from the assets andliabilities in all other accounts of the SSS. Notwithstanding any provision oflaw to the contrary, the assets held in the Mortgagors' Insurance Accountshall not be chargeable with the liabilities arising out of any other businessthe SSS may conduct but shall be held and applied exclusively for the benefitof the owners or beneficiaries of the insurance contracts issued by the SSS

under this paragraph.

(h) The SSS may insure any of its interests or part thereof with any privatecompany or reinsurer. The Insurer Commission or its authorizedrepresentatives shall make an examination into the financial condition andmethods of transacting business of the SSS at least once in two years, butsuch examination shall be limited to the insurance operation of the SSS as

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three years next preceding the date of investment in such preferred orguaranteed stocks: Provided, further, That if the stocks are guaranteed, theamount of stocks so guaranteed is not in excess of fifty percentum of theamount of the preferred or common stocks, as the case may be, of theissuing corporations: Provided, furthermore, That if the corporation orinstitution has not paid dividends upon its preferred stocks, the corporation orinstitution has sufficient retained earnings to declare dividends for at least twoyears on such preferred stock: Provided, finally, That such investment shallnot exceed 10 per cent of the Investment Reserve Fund. (As amended bySec. 12, E.O. No. 102, S-1986)

(k) In common stocks of any solvent corporation or institution created orexisting under the laws of the Philippines listed in the stock exchange withproven track record of profitability and payment of dividends over the last

three years: Provided, That such investment shall not exceed ten per cent ofthe Investment Reserve Fund. (As amended by Sec. 12, E.O. No. 102, S-1986)

SECTION 27.Records and Reports. The administrator shall keep and cause to bekeep records of operations, of the funds of the System and of disbursementsthereof and all accounts of payments made out of said funds. During the month ofJanuary of each year, the Administrator shall prepare for submission to the

President and to the Congress of the Philippines a report of operations of theSystem during the preceding year including statistical data on the number ofpersons covered and benefited, their occupations and employment status, theduration and amount of benefits paid, the finances of the System at the close of thesaid year, and recommendations. He shall also cause to be published in twonewspapers of general circulation in the Philippines a synopsis of the annualreport, showing in particular the status of the finances of the System and thebenefits administered.

SECTION 28.Penal Clause. (a) Whoever, for the purpose of causing anypayment to be made under this Act, or under an agreement thereunder, wherenone is authorized to be paid, shall make or cause to be made any false statementor representation as to any compensation paid or received or whoever makes orcauses to be made any false statement of a material fact in any claim for any

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benefit payable under this Act, or application for loan with the SSS, or whoevermakes or causes to be made any false statement, representation, affidavit, ordocument in connection with such claim or loan, shall suffer the penalties providedfor in Art. one hundred seventy-two of the Revised Penal Code. (As amended bySec. 15, P.D. No. 24, S-1972; Sec. 8, P.D. No. 177, S-1973; and Sec. 5, P.D. No.347, S-1973)

(b) Whoever shall obtain or receive any money or check under this Act or anyagreement thereunder, without being entitled thereto with intent to defraud anycovered employee, employer or the SSS, shall be fined not less than five hundredpesos nor more than five thousand pesos and imprisoned for not less than sixmonths nor more than one year. (As amended by Sec. 15, P.D. No. 24, S-1972)

(c) Whoever buys, sells, offers for sale, uses, transfers, takes or gives in exchange,

or pledges or gives in pledge, except as authorized in this Act or in regulationsmade pursuant thereto, any stamp, coupon, ticket, book or other device, prescribedpursuant to section twenty-three hereof by the Commission for the collection orpayment of contributions required herein, shall be fined not less than five hundredpesos nor more than five thousand pesos, or imprisoned for not less than sixmonths nor more than one year, or both, at the discretion of the court.

(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp,coupon, ticket, book or other device prescribed by the Commission for thecollection or payment of any contribution required herein, or uses, sells, lends, or

has in his possession any such altered, forged, or counterfeited materials ormakes, uses, sells, or has in his possession any such altered, forged material inimitation of the material used in the manufacture of such stamp, coupon, ticket,book, or other device, shall be fined not less than one thousand pesos nor morethan ten thousand pesos or imprisoned for not less than one year nor more thanfive years, or both, at the discretion of the court.

(e) Whoever fails or refuses to comply with the provisions of this Act or with therules and regulations promulgated by the Commission, shall be punished by a fineof not less than five hundred pesos nor more than five thousand pesos,imprisonment for not less than six months nor more than one year, or both, at thediscretion of the court: Provided, That where the violation consists in failure orrefusal to register employees or himself, in case of the covered self-employed or todeduct contributions from employee's compensation and remit the same to theSSS, the penalty shall be a fine of not less than five hundred pesos nor more thanfive thousand pesos and imprisonment for not less than six months nor more than

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one year. (As amended by Sec. 19, R.A. 1792; Sec. 16, R.A. 2658, Sec. 8, P.D.No. 177, S-1973; and Sec. 20, P.D. No. 1636, S-1979)

(f) If the act or omission penalized by this Act be committed by an association,partnership, corporation or any other institution, its managing head, directors orpartners shall be liable to the penalties provided in this Act for the offense.

(g) Any employee of the System who receives or keeps funds or propertybelonging, payable or deliverable to the System and who shall appropriate thesame, or shall take or misappropriate or shall consent, or through abandonment ornegligence shall permit any other person to take such property or funds, wholly orpartially, or shall otherwise be guilty of misappropriation of such funds or property,shall suffer the penalties provided in Art. two hundred seventeen of the RevisedPenal Code. (As amended by Sec. 16, R.A. 2658)

(h) Any employer who after deducting the monthly contributions or loanamortizations from his employee's compensation; fails to remit the said deductionsto the SSS within thirty days from the date they became due shall be presumed tohave misappropriated such contributions or loan amortizations and shall suffer thepenalties provided in Art. three hundred fifteen of the Revised Penal Code. (Asamended by Sec. 15, P.D. No. 24, S-1972)

(i) Criminal action arising from a violation of the provisions of this Act may becommenced by the SSS or the employee concerned either under this Act or in

appropriate cases under the Revised Penal Code: Provided, That such criminalaction may be filed by the SSS in the city or municipality where the SSS provincialor regional office is located if the violation was committed within its territorial

jurisdiction or in Metro Manila, at the option of the SSS. (As amended by Sec. 15,P.D. No. 24, S-1972; Sec. 19, P.D. No. 735, S-1975; and Sec. 13, P.D. No. 1202,S-1977)

SECTION 29. Government Aid. The establishment of the Social Security System

shall not disqualify the covered employees and employers from receiving suchgovernment assistance, financial or otherwise, as may be provided.

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SECTION 30. Separability Clause. In the event any provision of this Act or theapplication of such provision to any person or circumstance is declared invalid, theremainder of this Act or the application of said provision to other persons orcircumstances shall not be affected by such declaration.

SECTION 31. Saving Clause. The Assembly hereby reserves the right to amend,alter, or repeal any provision of this Act, and no person shall be or shall be deemedto be vested with any property or other right by virtue of the enactment or operationof this Act. (As amended by Sec. 21, R.A. 1792 and Sec. 20, P.D. No. 735, S-1975)

SECTION 32.Effectivity. This Act shall take effect upon its approval.

Approved: June 18, 19541awphil@alf