Social Security System

It is an insurance program mandated by the Philippine government to cover all

income earners or workers in the private sector, in contrast, government workers are
covered by the GSIS or the Government Service Insurance System.
The SSS basically derives its funds from member’s contributions and investment
earnings. Such portion of the contributions that are not needed for benefit
disbursements go to a Reserve Fund, which is intended to cover future liabilities in
benefit payments of the SSS to its over 29 million members to date.

Rationale Behind the Enactment of SSS Law

The Social Security Law was enacted pursuant to the policy of the State to
establish, develop and promote a sound and viable tax-exempt social security system
suitable to the needs of the people throughout the Philippines and provide meaningful
protection to members and their beneficiaries against the hazards of disability, sickness,
maternity, old age and death, and other contingencies resulting in loss of income or
financial burden (Sec.2 RA No. 8282).

Coverage of the SSS Law

It used to be that, the coverage of the Social Security Law is predicated on the
existence of an employer-employee relationship. This is no longer true because the
policy now is to encourage even the self-employed to become SSS members.
Coverage under the SSS Law may either be: (a) compulsory coverage; or (b)
voluntary coverage.

Compulsory Coverage
It is the mandatory registration of employees, employers, and self-employed
persons with the SSS, with corresponding payment and remittance of social security
contributions. Coverage in the SSS is compulsory upon:
(a) All employers engaged in business in the Philippines, including religious,
charitable, or non-profit institutions [Sec.8(c) RA No. 8282];
(b) All employees not over sixty (60) years of age [Sec.9(a) RA No. 8282];
(c) Domestic helpers receiving P1,000.00/month [Sec.9(a) RA No. 8282];
(d) Aliens employed in the Philippines;
(e) Self-employed persons, including, but not limited to the following:
(i) Self-employed professionals;
(ii) Partners and single proprietors of businesses;
(iii) Actors, actresses, directors, scriptwriters, and news correspondents;
(iv) Professional athletes, coaches, trainers, and jockeys; and
(v) Individual farmers and fishermen [Sec.9(a) RA No. 8282]

Voluntary Coverage
 It is the non-mandatory registration and payment of social security contributions.
The following may be covered by the SSS on a voluntary basis:
(a) Spouses who devote full time in managing the household and family affairs; and
(b) Filipinos recruited for overseas employment by foreign based employers (Sec. 9
RA No. 8282).

Obligations of the Employer under the SSS Law

Employers have two (2) distinct obligations under the Social Security Law,
namely:
(a) To make a timely report of its employees for coverage [Sec.24(a) RA No. 8282];
and
(b) To make timely remittance of premiums [Sec.22(a) RA No. 8282].

Effect of Non-Reporting or Non-Remittance

If the employer fails to report the employee for SSS coverage or fails to remit the
premium contributions, such failure or refusal, by express provision of Section 22(b) of
the Social Security Act, shall not prejudice the right of the covered employee to social
security benefits.
Therefore, if an employee dies, becomes disabled, gets sick or reaches the
retirement age without him being reported for coverage or without the premium
contributions being remitted, the SSS will still pay the employee the corresponding
benefits, but the SSS will hold the employer liable for damages equivalent to the
benefits the employee or his heirs are entitled to receive.

Effect of Separation from Employment

When an employee under compulsory coverage is separated from employment,
the obligation of the employer and the employee to pay contributions arising from that
employment ceases at the end of the month of separation (Sec.11 RA No. 8282).
However, an employee shall still be credited with all the contributions paid on his
behalf and remain entitled to SSS benefits and privileges.

The Social Security Benefits

The benefits under the Social Security Act are as follows:
(a) Maternity leave benefit [Sec.14(a) RA No. 8282];
(b) Sickness benefit (Sec.14 RA No. 8282);
(c) Permanent disability benefits [Sec.13(a) RA No. 8282];
(d) Retirement benefits [Sec.12(b) RA No. 8282];
(e) Death benefits (Sec.13 RA No. 8282);
(f) Funeral benefits [Sec.13(b) RA No. 8282].

Maternity Leave Benefit

 The maternity leave benefit is available to a female SSS member who gives birth
or suffers miscarriage or abortion and has paid at least three (3) monthly contributions
in the 12-month period immediately preceding the semester of her childbirth, abortion,
or miscarriage. The maternity leave benefit is equivalent to 100% of the average daily
salary credit. The maternity leave benefit can be availed of only for the first four (4)
deliveries or miscarriage. It cannot be availed of simultaneously with sickness benefit.

Sickness Benefit
It is not payment or reimbursement for hospitalization, medical treatment, or
medicine. Rather they are daily cash allowances to help carry through the employee
and his family during his confinement. It is a stipend to enable the employee and his
family to provide themselves with the bare necessities for subsistence when he is not
receiving his wage or salary (SSS Circular No. 41).
The sickness benefit is available to an SSS member who has paid at least three
(3) monthly contributions in the 12-month period immediately preceding the semester of
sickness and who was confined for more than three (3) days in a hospital or elsewhere
with the approval of the SSS and who has exhausted the company sick leave with pay,
if any.

Permanent Disability Benefits

Permanent total disability does not mean a state of absolute helplessness. It
means disablement to do the same or similar kind of work that the SSS member was
trained for and accustomed to perform because of complete loss of sight of both eyes,
loss of two limbs at or above the ankle or wrists, permanent complete paralysis of two
limbs, brain injury resulting in incurable imbecility or insanity, and such case as
determined and approved by the SSS.
Permanent partial disability, on the other hand, is a situation where the employee
is unable to continue with his former work because of complete and permanent loss of
use of the anatomical part of his body, such as, the loss of one thumb, one index finger,
one big toe, one hand, one arm, one foot, one ear, one leg etc.

Retirement Benefits
The retirement benefit under the Social Security Act can be availed of by the SSS
member if he has reached the age of sixty (60) years or the compulsory retirement age
of 65 years and already retired from service or ceased to be self-employed.

The Primary Beneficiaries

The primary beneficiaries under the Social Security Act are:
 (a) The dependent spouse, until he or she remarries; and
(b) The dependent legitimate, legitimated or legally adopted, and illegitimate
children.

The Secondary Beneficiaries

The secondary beneficiaries under the Social Security Act are:
(a) The dependent parents; or
(b) Any other person designated by the member as his secondary beneficiary.

Who Are the Dependents?

The dependents of an SSS member are the following:
(a) The legal spouse entitled by law to receive support from the member;
(b) The legitimate, legitimated, legally adopted, and illegitimate child who:
(i) Is unmarried; and
(ii) Has not reached 21 years of age; or
(iii) If over 21 years of age, he is congenitally incapacitated or while still a
minor has been permanently incapacitated and incapable of self-support,
physically or mentally.
(c) The parent who is receiving regular support from the member.