Compendium of Right to Food Laws in the Philippines - Vol. II - Part 2

8/12/2019 Compendium of Right to Food Laws in the Philippines - Vol. II - Part 2

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Food Accessibility Laws 01

COMPENDIUM OFRIGHT TO FOOD LAWSIN THE PHILIPPINES

Volume II

Food AccessibilityLaws

Part 2

National Food Coalition91 Madasalin Street, Sikatuna Village,

Quezon City


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02 COMPENDIUM OF RTF LAWS

Published by: National Food Coalition91 Madasalin Street, Sikatuna VillageDiliman, Quezon CityTel. No (02) 351-7553Fax. No. (02) 436-3593

Lay-out: Ramon T. Ayco, Sr.Set in Janson Text LT Std, pt. 12

Printed in the Philippines


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Republic of the Philippines

Congress of the Philippines

Metro Manila

Eighth Congress

Republic Act No. 6971 November 22, 1990

AN ACT TO ENCOURAGE PRODUCTIVITY

AND MAINTAIN INDUSTRIAL PEACE BYPROVIDING INCENTIVES TO BOTH LABOR

AND CAPITAL

Be it enacted by the Senate and House of Representatives

of the Philippines in Congress assembled::

Section 1. Short Title. -This Act shall be known as theProductivity Incentives Act of 1990.

Section 2. Declaration of Policy. - It is the declared

policy of the State to encourage higher

levels of productivity, maintain industrial

peace and harmony and promote the

principle of shared responsibility in the

relations between workers and employers,recognizing the right of labor to its just share

in the fruits of production and the right of

business enterprises to reasonable returns on

investments and to expansion and growth,

and accordingly to provide corresponding

incentives to both labor and capital for

undertaking voluntary programs to ensuregreater sharing by the workers in the fruits

of their labor.


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Section 3. Coverage. -This Act shall apply to all business

enterprises with or without existing and duly

recognized or certied labor organizations,

including government-owned and controlled

corporations performing proprietary functions.

It shall cover all employees and workers

including casual, regular, supervisory and

managerial employees.Section 4.Denition of Terms. -As used in this Act:

a) Business Enterprise refers to industrial,

agricultural, or agro-industrial

establishments engaged in the production

manufacturing, processing, repacking,

or assembly of goods, including service-

oriented enterprises, duly certied as suchby appropriate government agencies.

b) Labor-Management Committee refers to

a negotiating body in a business enterprise

composed of the representatives of labor

and management created to establish

a productivity incentives program, and

to settle disputes arising therefrom inaccordance with Section 9 hereof.

c) Productivity Incentives Program

refers to a formal agreement established

by the labor-management committee

containing a process that will promote

gainful employment, improve working

conditions and result in increasedproductivity, including cost savings,

whereby the employees are granted salary


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bonuses proportionate to increases in

current productivity over the average

for the preceding three (3) consecutive

years. The agreement shall be ratied by

at least a majority of the employees who

have rendered at least six (6) months of

continuous service.

Section 5.Labor-Management Committee. -a) A business enterprise or its employees,

through their authorized representatives,

may initiate the formation of a labor-

management committee that shall

be composed of an equal number of

representatives from the management

and from the rank-and-le employees:Provided, That both management and

labor shall have equal voting rights:

Provided, further, That at the request of

any party to the negotiation, the National

Wages and Productivity Commission

of the Department of Labor and

Employment shall provide the necessarystudies, technical information and

assistance, and expert advice to enable

the parties to conclude productivity

agreements.

b) In business enterprises with duly recognized

or certied labor organizations, the

representatives of labor shall be thosedesignated by the collective bargaining

agent(s) of the bargaining unit(s).


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c) In business enterprises without

duly recognized or certified labor

organizations, the representatives

of labor shall be elected by at least a

majority of all rank-and-file employees

who have rendered at least six (6)

months of continuous service.

Section 6.Productivity Incentives Program. -a) The productivity incentives program

shall contain provisions for the manner

of sharing and the factors in determining

productivity bonuses: Provided, That

the productivity bonuses granted to

labor under this program shall not be

less than half of the percentage increasein the productivity of the business

enterprise.

b) Productivity agreements reached

by the parties as provided in this Act

supplement existing collective bargaining

agreements.

c) If, during the existence of theproductivity incentives program or

agreement, the employees will join

or form a union, such program or

agreement may, in addition to the

terms and conditions agreed upon by

labor and management, be integrated

in the collective bargaining agreementthat may be entered into between

them.


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Section 7. Benets and Tax Incentives. -

(a) Subject to the provisions of Section 6

hereof, a business enterprise which adopts

a productivity incentives program, duly

and mutually agreed upon by parties to

the labor-management committee, shall

be granted a special deduction from gross

income equivalent to fty percent (50%)of the total productivity bonuses given

to employees under the program over

and above the total allowable ordinary

and necessary business deductions for

said bonuses under the National Internal

Revenue Code, as amended.

b) Grants for manpower training and specialstudies given to rank-and-le employees

pursuant to a program prepared by the

labor-management committee for the

development of skills identied as necessary

by the appropriate government agencies

shall also entitle the business enterprise

to a special deduction from gross incomeequivalent to fty per cent (50%) of the

total grants over and above the allowable

ordinary and necessary business deductions

for said grants under the National Internal


c) Any strike or lockout arising from any

violation of the productivity incentivesprogram shall suspend the effectivity

thereof pending settlement of such strike


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or lockout: Provided, That the business

enterprise shall not be deemed to have

forfeited any tax incentives accrued prior

to the date of occurrence of such strike

or lockout, and the workers shall not be

required to reimburse the productivity

bonuses already granted to them under

the productivity incentives program.Likewise, bonuses which have already

accrued before the strike or lockout shall

be paid the workers within six (6) months

from their accrual.

d) Bonuses provided for under the

productivity incentives program shall

be given to the employees not later thanevery six (6) months from the start of such

program over and above existing bonuses

granted by the business enterprise and by

law: Provided, That the said bonuses shall

not be deemed as salary increases due the

employees and workers.

e) The special deductions from gross incomeprovided for herein shall be allowed

starting the next taxable year after the

effectivity of this Act.

Section 8. Notication. - A business enterprise which

adopts a productivity incentives program

shall submit copies of the same to the National

Wages and Productivity Commission andto the Bureau of Internal Revenue for their

information and record.


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Section 9. Disputes and Grievances. -Whenever disputes,

grievances, or other matters arise from the

interpretation or implementation of the

productivity incentives program, the labor-

management committee shall meet to resolve

the dispute, and may seek the assistance of the

National Conciliation and Mediation Board

of the Department of Labor and Employmentfor such purpose. Any dispute which remains

unresolved within twenty (20) days from the

time of its submission to the labor-management

committee shall be submitted for voluntary

arbitration in line with the pertinent of the

Labor Code, as amended.

The productivity incentives programshall include the name(s) of the voluntary

arbitrator or panel of voluntary arbitrators

previously chosen and agreed upon by the

labor-management committee.

Section 10.Rule Making Power. -The Secretary of Labor and

Employment and the Secretary of Finance, after

due notice and hearing, shall jointly promulgateand issue within six (6) months from the effectivity

of this Act such rules and regulations as are

necessary to carry out the provisions hereof.

Section 11.Penalty. - Any person who shall make any

fraudulent claim under this Act, regardless of

whether or not a tax benet has been granted,

shall upon conviction be punished withimprisonment of not less than six (6) months

but not more than one (1) year or a ne of not


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less than two thousand pesos (P2,000.00) but

not more than six thousand pesos (P6,000.00),

or both, at the discretion of the Court, without

prejudice to prosecution for any other acts

punishable under existing laws.

In case of partnerships or corporations, the

penalty shall be imposed upon the ofcer(s)

or employee(s) who knowingly approved,authorized or ratied the ling of the fraudulent

claim, and other persons responsible therefor.

Section 12.Non-Diminution of Benets. - Nothing in this

Act shall be construed to diminish or reduce

any benets and other privileges enjoyed

by the workers under existing laws, decrees,

executive orders, company policy or practice,or any agreement or contract between the

employer and employees.

Section 13. Separability Clause. - If any provision of this

Act is held invalid, any other provision not so

affected shall continue to be valid and effective.

Section 14.Repealing Clause. -Any law, presidential decree,

executive order, and letter of instruction, or anypart thereof, which is inconsistent with any of

the provisions of this Act is hereby repealed or

amended accordingly.

Section 15.Effectivity Clause. -This Act shall take effect

fteen (15) days after its publication in the

Ofcial Gazette or in at least two (2) national

newspapers of general circulation.

Approved: November 22, 1990


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RULES IMPLEMENTING

REPUBLIC ACT NO. 6971

Pursuant to the authority granted to the Secretary

of Labor and Employment and the Secretary of

Finance under Section 10 of Republic Act No. 6971,

otherwise known as the Productivity Incentives

Act of 1990, the following rules and regulations arehereby promulgated and issued for the guidance of all

concerned.

RULE I

Preliminary Provisions

Section 1.Title. These Rules shall be known as theRules Implementing RA No. 6971.

Section 2. Construction. These Rules shall be

literally construed to carry out the objectives

of RA 6971 to encourage higher levels of

productivity, maintain industrial peace and

harmony and promote the principle of shared

responsibility in the relations between workersand employers, recognizing the right of labor

to its just share in the fruits of production

and the right of business enterprises to

reasonable returns on investments and to

expansion and growth, and accordingly to

provide corresponding incentives to both labor

and capital for undertaking voluntary programsto ensure greater sharing by the workers in the

fruits of their labor.


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Section 3. Denition of Terms. As used in these Rules:

(a) Act refers to Republic Act No. 6971;

(b) DOLE refers to the Department of

Labor and Employment;

(c) DOF refers to the Department of

Finance;

(d) NWPC refers to the National Wages

and Productivity Commission;(e) RTWPB refers to the Regional

Tripartite Wages and Productivity Board;

(f) NCMB refers to the National

Conciliation and Mediation Board;

(g) NMYC refers to the National

Manpower and Youth Council;

(h) RMDO refers to the RegionalManpower Development Ofce Under

the NMYC;

(i) BIR refers to the Bureau of Internal

Revenue:

(j) Business Enterprises refers to

industrial, agricultural, or agro-industrial

establishment engaged in the production,manufacturing, processing, repacking,

or assembly of goods, including service-

oriented enterprises;

(k) Service-oriented Enterprises refers to

establishments other than agricultural,

industrial and agro-industrial establishments;

(l) Managerial Employee refers to anemployee who is vested with power or

prerogatives to lay down and execute


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management policies and/or to hire,

transfer, suspend, lay- off, recall, discharge,

assign or discipline employees;

(m) Supervisory Employee refers to

an employee who, in the interest of

the employer, effectively recommends

managerial actions if the exercise of such

authority is not merely routinary orclerical in nature but requires the use of

independent judgment;

(n) Rank-and-le Employee refers to an

employee who does not fall under the

denition of managerial and supervisory

employee;

(o) Labor-Management Committee refers toa cooperative/negotiating body in a business

enterprise composed of representatives of

labor and management created to establish

a productivity incentives program, and

to settle disputes arising therefrom in

accordance with Section 9 of the Act;

(p) Productivity refers to the relation ofoutput to input in physical and/or real

monetary terms;

(q) Output refers to products and services

expressed in physical and/or real

monetary terms;

(r) Input refers to resources such as labor, raw

materials, equipment, capital, and energyused to produce output and expressed in

physical and/or real monetary terms;


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(s) Productivity Incentives Program refers

to a formal agreement voluntarily

established by the labor-management

committee containing a productivity

improvement program that will promote

gainful employment, improve working

conditions, maintain industrial peace

and result in increased productivity,including cost savings, as well as a

productivity gainsharing program

whereby the employees are granted

productivity bonuses;

(t) Bonuses refer to cash and/or non-cash

incentives given to employees, as agreed

by the parties under the ProductivityIncentives Program;

(u) Training refers to an organized activity

primarily designed for the systematic

development of attitude, knowledge,

skill, and behavior pattern required for

the adequate performance of a given job

or task conducted by a juridical/naturalperson of persons;

(v) Special Studies refers to relevant and

specialized skills trainings acquired

abroad or locally in order to introduce

new skills identied as necessary by the

NMYC;

(w) Voluntary Arbitration refers to themode of settling labor-management

disputes by which the parties select a


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competent, trained and impartial person

who shall decide on the merits of the case

and whose decision is nal, executory and

unappealable; and

(x) Voluntary Arbitrator refers to any person

accredited by the NCMB as such, or

any person named or designated in the

collective bargaining agreement by theparties to act as their voluntary arbitrator, or

one chosen, with or without the assistance

of the NCMB, pursuant to a selection

procedure agreed upon in the collective

bargaining agreement, or any ofcial that

may be authorized by the DOLE Secretary

to act as voluntary arbitrator upon thewritten request and agreement of the parties

to a dispute arising from the productivity

incentives agreement.

RULE II

Coverage

Section 1. Coverage. The Rules shall apply to:

(a) All business enterprises with or without

existing duly recognized or certied labor

organizations, including government-

owned and controlled corporation

performing proprietary functions.

(b) All employees and workers includingcasual, regular, rank- and-le, supervisory

and managerial employees.


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RULE III

Labor Management Committee

Section 1. Organization. A business enterprise and/

or its employees may initiate the formation

of a labor-management committee to

establish a productivity incentives program

in the enterprise.At the request of any party, the NCMB or

its appropriate Regional Branch or any third

person chosen and agreed upon by both parties

shall provide assistance to enable the parties

to form a labor- management committee.

Section 2. Composition and Selection.

(a) Composition of the labor-managementcommittee.

The labor-management committee shall

be composed of an equal number of

representatives from the management

and rank-and-le employees.

(b) Selection of labor representatives.

In a business enterprise withduly recognized or certied labor

organizations, the labor representatives

to the labor- management committee

shall be those designated by the collective

bargaining agent(s) of the bargaining

unit(s). In a business enterprise without

duly recognized or certied labororganizations, the labor representatives

shall be elected by at least a majority of


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all rank-and-le employees who have

rendered a minimum of six (6) months

continuous service.

Section 3. Voting Rights. Both management and labor

shall have equal voting rights.

Section 4. Effect on Existing Labor Management

Committees. A business enterprise with

existing labor-management committeesfor other purposes may form a new labor-

management committee or use the existing

labor-management committee to establish

a productivity incentives program; provided

that the conditions stated in Sections 2 and 3

hereof and Section 1, Rule VII of these Rules

are met.

RULE IV

Productivity Incentives Program

Section 1. Objectives and Scope. The productivity

incentives program shall clearly state

its immediate and long term objectivesand the effects of such on the employees

welfare and the business enterprise as a

whole. It shall embody, in general terms,

an implementation plan and a summary of

strategies to be undertaken to attain such

objectives.

The productivity incentives program shallspecify the organizational units and functional

areas that will be covered by the program.


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Section 2.Components. The productivity incentives

program shall be composed of the following:

(a) Productivity Improvement Program. The

productivity improvement program shall

include any intervention of scientic/

systematic process designed to increase

productivity of the various factor inputs such

as materials, labor, capital and energy. Theprogram may be geared towards improved

human resource management and effectivity

and efcient use of other resources, e.g.,

waste reduction, energy conservation and

maintenance improvement.

(b) Productivity Gainsharing Program. The

Productivity Gainsharing Program shallspecify an incentives system whereby

employees are given an equitable share

from gains brought about by improved

productivity. Business enterprises with

existing productivitygainsharing programs

may convert the same into a productivity

incentives program provided the conditionscontained herein are met.

(c) Manpower Trainings and Special Studies.

Any manpower training and special study

proposed by the labor- management

committee aimed at developing skills of

rank-and-le employees may be included

in the productivity incentives program. Forpurposes of accreditation, such training and

studies shall specify the following:


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1. Objective/s of training program

2. Type of training

3. Training schedule

4. Program of activities

5. Course content or syllabus

6. Budgetary allocation and cost

estimates for any or a combination of

the following cost items:a) Training materials, books and

supplies;

b) Cost of raw materials and non-

depreciable tools to be consumed

or used during the training;

c) Honoraria of trainors and training

coordinators;d) Travelling expenses of trainors,

coordinators, trainees and training

staff while away from home on

account of the training program;

e) Basic salary of trainees and training

staff while away from home on

account of the training program;f) Tuition, registration or similar

fees to be paid to a training

institution;

g) Depreciation of training equipment,

facilities, and other xed assets to be

used in the training program;

h) Other cost items such as snacks,rental of venue, rental of equipment,

working cloths for trainees and


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instructors, and certificates of

training but not to exceed 5% of

the total training cost.

7. Evaluation scheme for the proposed

training.

Section 3. Contents. The productivity incentives

program shall contain the following:

(a) Methods and Formulas to MeasureProductivity.

The productivity measures indicate the

total and/or partial relation between

outputs and inputs expressed in

physical and/or monetary terms. Some

of the generally accepted measures of

productivity which may be adopted bythe labor-management committee to

determine productivity gains and bonuses

are:

1) Value of Production Approach.

Total Factor

Total Value

of Output

Productivity = Total Cost

Partial Total Value of Output

Productivity = Cost of SpecicFactor Input where:

Total value of output = quantity x selling price


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2) Value-Added Approach

Total Value-Added

Total Value Added

Productivity = Company Inputs where:

Total value-added = Total value of output

intermediate inputs;

Intermediate inputs = raw materials consumed,

energy and other inputs such as purchases and services

supplied by outside sources; and

Company inputs = those contributed by the company other

than intermediate inputs.

(b) Factors in Determining Productivity

Bonuses.

This refers to the factors to be considered in

measuring productivity gains as identied

by the labor-management committee.

These factors as well as the methods/

formulas to measure productivity agreedupon by both parties shall form the bases in

determining the amount of the productivity

bonus for distribution.

(c) Manner of Sharing Productivity Bonuses.

The list of employees entitled to

productivity bonuses shall be drawn up,

including the method of sharing suchbonuses, the percentage share of each

employee and the period of distribution


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of bonuses. Said list shall be updated

from time to time to reect changes

in employment status like separation,

retirement, resignation, promotion and

hiring of new personnel.

(d) Names and Positions of the Labor-

Management Committee Representatives.

The terms of the representatives to thelabor-management committee, their

positions in the company, and their terms

of ofce as labor-management committee

representatives shall be specied.

(e) Names of Voluntary Arbitrators or Panel

of Voluntary Arbitrators.

The name of the voluntary arbitrator orpanel of voluntary arbitrators chosen and

agreed upon by the labor-management

committee shall be included in the

productivity incentives program.

(f) Other terms and Conditions of the

Productivity Incentives Program.

Other terms and conditions of theprogram shall be specied, including

agreements on the renewal of the

productivity incentives program, the

number of labor and management

representatives, the process of electing

representatives and substitutes by both

parties, the provisions in case of decliningproductivity, and other related terms and

conditions acceptable to both parties.


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Section 4. Ratification. The productivity incentives

program shall be ratified in writing

by at least a majority of the covered

employees who have rendered a minimum

of six (6) months continuous service, within

sixty (60) days from the time of signing of

the agreement by the labor-management

committee.Section 5. Submission to RTWPB. The ratied

productivity incentives program shall be

submitted in three (3) copies to the

appropriate RTWPB together with proof

of ratication, e.g., an afdavit stating

the number of covered employees and the

number of votes cast in favor of the program.The RTWPB shall review said program

within sixty (60) calendar days from

receipt thereof to determine compliance

with these Rules. Where manpower trainings

and special studies are included in the

program, same shall be reviewed by the

appropriate RMDO.Section 6. Notication of BIR. A business enterprise

shall submit a copy of the productivity

incentives program to the BIR for information

and record purposes.

Section 7.Amendments to the Productivity Incentives

Program. Any amendment to the

productivity incentives program shall bedeemed valid provided the requirements set

in Section 4 to 6 hereof are met.


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Section 8.Technical Support in the Development of

Productivity Incentives Program. At the

request of any party, the NWPC or its

appropriate RTWPB shall provide the

necessary studies, technical information

and assistance, and expert advice to enable

the parties to conclude productivity

agreements.

RULE V

Productivity Bonuses

Section 1. Productivity Bonuses. Productivity bonuses

granted to labor under the productivity

incentives program may be in cash and/ornon-cash incentives, as agreed by the parties,

and shall not be less than half of the percentage

increase in the productivity of the business

enterprise over and above the average for

the preceding three (3) consecutive years;

provided, that for enterprises that have been

in operation for less than three (3) years, thelabor management committee therein may

agree on other base periods for determining

productivity increases.

Section 2. Frequency of Granting Productivity Bonuses.

The productivity bonuses over and

above the existing bonuses granted by the

business enterprise and by law shall be givento employees not later than every six (6)

months from the start of the productivity


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incentives program; provided that said

bonuses shall not be deemed as salary

increases due the employees and workers;

provided further than upon agreement by

both parties, payment of bonuses may be

deferred, but not longer than one year from

date payment of said bonuses are due.

RULE VI

Tax Incentives

Section 1. Rate of Deductions.

(a) Subject to the provisions of Section 7 of

the Act and Rule IV hereof, a business

enterprise which adopts a productivityprogram, duly agreed upon by the

labor-management committee, shall

be granted a special deduction from

the gross income equivalent to fifty

percent (50%) of the total productivity

bonuses given to employees under

the program in addition to the totalallowable ordinary and necessary

business deductions for said bonuses

as provided for under the National

Internal Revenue Code, as amended.

(b) A business enterprise providing

manpower training and special

studies to rank-and-file employees asaccredited by the RMDO may avail of

the special deduction from gross income


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equivalent to fifty (50%)percent of

the total grants for local trainings and

special studies given to employees

under the program in addition to

the allowable ordinary and necessary

business deductions for said grants

as provided for under the National

Internal Revenue Code, as amended.(c) For business enterprises deriving

income other than from within the

Philippines, which grant manpower

training abroad to rank-and-file

employees, the related expense

incurred in relation thereto, shall not be

deducted in full but shall be determinedon a ratable basis in accordance with

Revenue Regulations No. 16-86

implementing the National Internal

Revenue Code, as amended; provided

that such qualifies as ordinary and

necessary expenses.

Section 2. Period Considered for Tax Deduction.Thedeductions provided for in the Act shall

be taken for the taxable year in which

the productivity bonus has been paid or

accrued or paid or incurred dependent

upon the method of accounting upon the

basis of which the income is computed,

unless in order to clearly reflect theincome, the deductions should be taken as

of a different period as provided for under


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Section 39 of the National Internal


Section 3. Eligibility of Tax Incentives on Training

Grants. Within fifteen (15) calendar

days after completion of the training

program and/or special studies, the

business enterprise shall submit to the

appropriate RMDO a post-training reportstating whether the objectives of the

training program have been adequately

met, plus the official receipts of training

expenses. Upon submission of the post-

training report by the business enterprise,

the RMDO, within thirty (30) calendar

days, shall conduct a post-trainingevaluation to determine the acquisition

of appropriate skills, knowledge and

behavior and shall issue to the business

enterprise the necessary Certificate of

Tax Eligibility.

Section 4. Requirements for Granting Tax Incentives.

The tax deductions stipulated in the Act maybe availed of by the business enterprise upon

lling the quarterly-nal income tax return

accompanied with the pertinent supporting

documents.

Section 5. Effectivity of Tax Incentives. The special

deductions from gross income provided

for herein shall be allowed starting thenext taxable year after the effectivity of the

Act.


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RULE VII

Disputed and Grievances

Section 1. Resolution.

(a) Whenever disputes, grievances or other

matters arise from the interpretation and

implementation of the program as ratied

by the parties, the labor-managementcommittee shall meet to resolve the dispute.

(b) The labor-management committee may seek

the assistance of the NCMB or its appropriate

Regional Branch for such purpose.

(c) Any dispute which remains unresolved within

twenty (20) calendar days from the time of

the submission to the labor- managementcommittee shall be submitted for voluntary

arbitration in line with the pertinent

provisions of the Labor Code, as amended.

RULE VIII

General Provisions

Section 1. Non-Diminution of Benefits. Nothing in these

Rules shall be construed to diminish or reduce any

benefits and other privileges enjoyed by the workers

under existing laws, decrees, executive orders,

company policies or practices or any agreement or

contract between the employer and the employees.

Section 2. Suspension of Benets.(a) Any strike or lockout arising from any

violation of the productivity incentives


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program shall suspend the effectivity

thereof pending settlement of such

strike or lockouts; provided the business

enterprise shall not be deemed to have

forfeited any tax incentives accrued prior

to the date of occurrence of such strike

or lockout and the workers shall not be

required to reimburse the productivitybonuses already granted to them under

the productivity incentives program.

(b) Bonuses which already accrued before the

strike or lockout shall be paid the workers

within six (6) months from their accrual.

Section 3. Effect of Productivity Incentives Program on

Collective Bargaining Agreements.(a) The productivity agreements reached

by the parties as provided in the Act

shall supplement existing collective

bargaining agreements.

(b) If, during the existence of the productivity

incentives program or agreement, the

employers will join or form a union, suchprogram or agreement may, in addition to

the terms and conditions agreed upon by

labor and management, be integrated in

the collective bargaining agreement that

may be entered into between them.

Section 4. Penalty.Any person who will make any fraudulent

claim under the Act, regardless of whether or nota tax incentive has been granted, shall upon

conviction be punished with imprisonment of not


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Republic Act No. 1161

June 18, 1954

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 (As amended by Sec.

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

Section 2.Declaration of Policy. It is the policy

of the Republic of the Philippines to

establish, develop, promote and perfect asound and viable tax-exempt social security

service suitable to the needs of the people

throughout the Philippines which shall

provide to covered employees and their

families protection against the hazards of

disability, sickness, old age and death, with

a view to promoting their well-being in thespirit 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,


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Philippines is hereby created. The SSS

shall be directed and controlled by a Social

Security Commission composed of the

Secretary of Labor and Employment, the

SSS Administrator and seven appointive

members: three of whom shall represent

the labor group, one of whom shall be a

woman; three, the management group,one of whom 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 designated by

the President from among its members.

The term of the appointive members shall

be three years: Provided, That the termsof the rst six appointive members shall

be one, two and three years for every two

members, respectively.

All vacancies, except through the expiration

of the term, shall be lled for the unexpired

term only. The apppointive members of the

Commission shall receive one thousand vehundred pesos per diem for each meeting

actually attended by them: Provided, That

no compensation shall be paid for more

than eight meetings a month. Members of

the Commission who hear cases pending

before the Commission, shall also receive

a per diem of one thousand ve hundredpesos. (As amended by Sec. 2, R.A. 1792,

R.A. 2658, Sec. 1, R.A. 4857; Sec. 1, Sec.


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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 SSS

shall be vested in the Administrator who

shall serve as the chief executive ofcerimmediately responsible for carrying out

the program of the SSS and the policies

of the Commission. The administrator

shall be a person who has had previous

experience in technical and administrative

elds related to the purposes of this Act.

He shall be appointed by the President ofthe Philippines and shall receive a salary

to be xed by the Commission with the

approval of the President, payable from

the funds 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 recommendationof the Administrator shall appoint an

actuary, and such other personnel as may be

deemed necessary; x their compensation;

prescribe their duties and establish such

methods and procedures as may insure

the efficient, honest and economical

administration of the provisions andpurposes of this Act. Provided, however,

That the personnel of the SSS shall be


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selected only from civil service eligibles

certied 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 main objectivesas set forth in section two hereof, the

Commission shall have the following

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 provisions and purposes ofthis Act.

(b) To submit annually not later than March

31, a public report to the President of the

Philippines covering its activities in the

administration and enforcement of this

Act during the preceding year including

information and recommendations onbroad policies for the development and

perfection of the program 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 benefit

program every five years, or morefrequently as may be necessary, and to

undertake the necessary actuarial studies


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and calculations concerning increases

in benets and the nancial stability of

the SSS and to provide for the feasible

increases in benets and the addition

of new ones under such rules and

regulations as the Commission may adopt

subject to the approval of the President:

Provided, That the actuarial soundnessof the reserve fund shall be guaranteed:

Provided, further, That such increases in

benets shall 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 Systemwhenever and wherever it may be

expedient or necessary, and to inspect or

cause to be inspected periodically such

branches.

(e) To enter into agreements or contracts for

such service and aid, as may be needed

for the proper, efcient and stableadministration of the System.

(f) To adopt from time to time a budget

of expenditures including salaries of

personnel, against all funds available to

the System under this Act. (As amended

by Sec. 3, R.A. 1792)

(g) To set up its accounting system andprovide the necessary personnel therefor.

(As amended by Sec. 3, R.A. 1792)


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(h) To require reports, compilations and

analyses of statistical and economic data

and to make investigations as may be

needed for the proper administration and

development of the System.

(i) To acquire property, real or personal, which

may be necessary or expedient for the

attainment of the purposes of this Act.(j) To acquire, receive, or hold, by way of

purchase, expropriation or otherwise,

public or private property for the purpose

of undertaking housing projects preferably

for the benet of low-salaried employees

and for the maintenance of hospitals and

institutions for the sick, aged and inrmemployees 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.Section 5. Settlement of Disputes.

(a) Any dispute arising under this Act with

respect to coverage, benets, contributions

and penalties thereon or any other matter

related thereto, shall be cognizable by

the Commission, and any case led with

respect thereto shall be heard by theCommission, or any of its members, or

by hearing officers duly authorized


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by the Commission and decided within

twenty days after the submission of the

evidence. The ling, determination and

settlement of disputes shall be governed

by the rules and regulations promulgated

by the Commission. (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 an appeal

therefrom as herein provided, shall become

nal fteen days after the date of notication,

and judicial review thereof shall be permitted

only after any party claiming to be aggrieved

thereby has exhausted his remedies beforethe 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 scal.(c) Court Review. The decision of the

Commission upon any disputed matter may

be received both upon the law and the facts

by the Court of Appeals. For the purpose

of such review the procedure concerning

appeals from the Court of First Instance

shall be followed as far as practicable andconsistent with the purposes of this Act.

Appeal from a decision of the Commission


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must be taken within fteen days from

notication 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 theSupreme 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 Any decision or

award of the Commission after the same

has become nal and executory shall be

enforced and executed in the same manner

as decisions of Courts of First Instance

and the Commission shall have the power

to issue to the City or provincial sheriffor the sheriff whom it may appoint such

writs of execution as may be necessary for

the enforcement of such decision or 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 Commission, be punishedby the proper court for contempt. (As

amended by Sec. 4, P.D. No. 24, S-1972)


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Section 6. Auditor and Counsel.

(a) The Commissioner on Auditor shall be

the ex-ofcio 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 auditedunder 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-ofcio 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 the Commission, an ofcial

or employee thereof shall have the power to

administer oath and afrmation, take depositions,certify to ofcial 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 in accordancewith the provisions of section ve hundred

eighty of the Administrative Code.


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B. Defnitions

Section 8. Terms Dened. For the 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. (As amended by Sec.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, who carries

on in the Philippines any trade, business,

industry, undertaking, or activity of anykind 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 professionalshall be both employee and employer at the

same time. (As amended by Sec. 2, P.D. No.

1636, S-1979)

(d) Employee Any person who performs

services for an employer in which either or

both mental and physical efforts are used

and who receives compensation for suchservices, where there is an employer-

employee relationship: Provided, That a


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self-employed professional shall be both

employee and employer at the same time.

(As amended by Sec. 4, R.A. 2658 and Sec.

2, P.D. No. 1636, S-1979)

(e) Dependent The legitimate, legitimated

or legally adopted child who is unmarried,

not gainfully employed, and not over

twenty-one years of age, or over twenty-one years of age, provided that he is

congenitally incapacitated and incapable

of self-support, physically or mentally; the

legitimate spouse dependent for support

upon the employee; and the legitimate

parents wholly dependent upon the covered

employee for regular support. (As amendedby Sec. 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 the mandated

cost of living allowance, as well as the

cash value of any remuneration paid

in any medium other than cash exceptthat part of the remuneration 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 credi t Thecompensation base for contributions

and benets as indicated in the schedule


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in section eighteen of this Act. (As

amended 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 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 onany other basis, monthly shall mean a

period of one month.

(i) Contribution The amount paid to the

SSS by the employee and by his employer

in accordance with section eighteen of

this Act. (As amended by Sec. 5, P.D. No.

24, S-1972)(j) Employment. Any service performed by

an employee for his employer, except

1. Agricultural labor when performed by

a share or leasehold tenant or worker

who is not paid any regular daily wage

or base pay and who does not work

for an uninterrupted period of at leastsix months in a year; (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 or

business of the employer;

4. Service performed by an individual inthe employ of his son, daughter, or

spouse, and service performed by a


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child under the age of twenty-one

years in the employ of his parents;

5. Service performed on or in

connection with an alien vessel by

an employee if he is employed when

such vessel is outside the Philippines;

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 or international

organization, or their wholly-owned

instrumentality: Provided, however,

That his exemption notwithstanding,

any foreign government, internationalorganization, or their wholly-owned

instrumentality employing workers in

the Philippines or employing Filipinos

outside of the Philippines may enter

into an agreement with the Philippine

Government for the inclusion of such

employees in the SSS except thosealready covered by their respective

civil service retirement systems:

Provided, further, That the terms

of such agreement shall conform

with the provisions of this Act on

coverage and amount of payment

of contributions and benets:Provided, nally, That the provisions

of this Act shall be supplementary to


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any such agreement. (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

be excluded by regulation of the

Commission. Employees of bona

de independent contractors shallnot be deemed employees of the

employer engaging the services of

said contractors. (As amended by Sec.

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

(k) Beneficiaries The dependent

spouse until he remarries and

dependent children, who shall be theprimary beneficiaries. In their absence,

the dependent parents and, subject to

the restrictions imposed on dependent

children, the legitimate descendents

and illegitimate children who shall

be the secondary beneficiaries. In the

absence of any of the foregoing, anyother person designated by the covered

employee as secondary beneficiary. (As

amended 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 or sicknessof the covered employee. (As amended

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


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(m) Average monthly salary credit The

result obtained by dividing the sum of

the monthly salary credits in the sixty-

month period immediately preceding the

semester of contingency by the number of

months of coverage in the same period, or

the result obtained by dividing the sum of

all the monthly salary credits paid prior tothe semester of contingency by the number

of calendar months of coverage in the same

period, whichever is greater: except where the

month of contingency falls within eighteen

months from the month of coverage, in which

case it is the result obtained by dividing the

sum of all monthly salary credits paid prior tothe month of contingency by the total number

of calendar months of coverage in the same

period: 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.

(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 the six

highest monthly salary credits in the twelve-

month period immediately preceding the

semester of contingency by one hundred

eighty. (As amended by Sec. 3, R.A. 4857;Sec. 5, P.D. No. 735, S-1975; and Sec. 3,

E.O. No. 102, S-1986)


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(o) Semester A period of two consecutive

quarters ending in the quarter of

contingency. (As amended by Sec. 5, P.D.

No. 735, S-1975)

(p) Quarter A period of three consecutive

calendar months ending on the last day of

March, June, September and December.

(As amended by Sec. 3, R.A. 4857)(q) Replacement ratio The sum

of twenty per cent and the quotient

obtained by dividing three hundred

by the sum of three hundred forty and

the average monthly 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 ve minus

the calendar year of coverage plus the

number of calendar years in which six

or more contributions have been paid

from January 1975 up to the calendaryear containing the semester prior to

the contingency. For a member covered

in or after January 1975, the number

of calendar years in which six or more

contributions have been paid from the

year of coverage up to the calendar year

containing the semester prior to thecontingency. (As amended by Sec. 2, P.D.

No. 1636, S-1979)


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C. Scope of the System

Section 9. Compulsory coverage.

(a) Coverage in the SSS shall be

compulsory upon all employees not

over sixty years of age and their

employers: Provided, That any benefit

already earned by employees underprivate 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 withthe plan of the SSS in such a way

where the employers 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 and he shall continue

his contribution to such private planless his contribution to the SSS so

that the employers total contribution

to his private benefit plan and to the

Social Security System shall be the

same as his contribution to his private

benefit plan before the compulsory

coverage: Provided, further, That anychanges, adjustments, modifications,

eliminations or improvements in the


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benefits to be available under the

remaining private plan, which may be

necessary to adopt by reason of the

reduced contribution thereto as a result

of the integration, shall be subject to

agreements between the employers

and employees concerned: Provided,

further, That the private benefit planwhich the employer shall continue for

his employees shall remain under the

employers 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 employersand employees to agree on and adopt

benefits which are over and above those

provided under this Act. (As amended

by Sec. 5, R.A. 1972; Sec. 5, R.A. 2658;

and Sec. 2, R.A. 3839)

(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 SSS shall also be compulsory

upon all self-employed persons earningP1,800 or more per annum: Provided, That

the effectivity of coverage of certain groups


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paragraphs (1) to (4) shall take effect

on the rst day of January following the

calendar year they started the practice of

their profession or business 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 under compulsory

coverage is separated from employment,

his employers 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 allcontributions paid on his behalf and entitled

to benets according to the provisions of

this Act. He may, however, continue to pay

the total contributions to maintain his right

to full benet. (As amended by Sec. 4, R.A.

4857 and Sec. 7, P.D. No. 735, S-1975)

Section 11 - A.Effect of Interruption of Business or ProfessionalIncome. If the self-employed realizes no

net professional or business income in any

calendar year, 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

and regulations applicable to separatedcovered employees. (As amended by Sec. 5,

P.D. No. 1636, S-1979)


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D. Benefts

Section 12. Monthly Pension.

(a) The monthly pension shall be the sum

of the following:

1. The average monthly salary credit

multiplied by the replacement ratio; and

2. One and a half per cent of theaverage monthly salary credit for

each credited year of 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 a secondarybeneciary: Provided, That the monthly

pension of surviving pensioners as of

December 31, 1986 shall be increased by

twenty per cent. (As amended by Sec. 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; and Sec. 4, E.O. No. 102, S-1986)

Section 12 - A. Dependents Pension. The dependents

pension shall be equivalent to ten per cent

of the monthly pension for each dependent

child but not exceeding ve, beginning withthe youngest and without substitution. (As



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Section 12 - B..Retirement Benets.

(a) A covered employee who has paid at least

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 monthly compensation of at

least three hundred pesos or (2) has reached

the age of sixty-ve years, shall be entitled foras long as he lives to the monthly pension:

Provided, That his dependents born before

his retirement of a marriage subsisting when

he was fty-seven years old shall be entitled

to the dependents pension. (As amended by

Sec. 4, P.D. No. 1202, S-1977)

(b) A covered member who is sixty years oldat retirement and who does not qualify

for pension benets under paragraph (a)

above, shall be entitled to a lump sum

benet 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 retired

employee who is less than sixty-ve years

old by an amount equivalent to one-half

his earnings over three hundred pesos. He

shall again be subject to section eighteenand his employer to section nineteen

of this Act. (As amended by Sec. 7, R.A.


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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 beneciaries as

of the date of his retirement shall beentitled to eighty per cent of the monthly

pension and his dependents to the

dependents pension: Provided, That if

he has no primary beneciaries and he

dies within sixty months from the start

of his monthly pension, his secondary

beneciaries shall be entitled to a lumpsum benet equivalent to the bigger of (1)

twenty times the monthly pension or (2)

the difference of sixty times the monthly

pension and the total monthly pensions

paid by 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 Benets. Upon the covered

employees death, his primary beneciaries

shall be entitled to the monthly pension and

his dependents to the dependents pension:

Provided, That he has paid at least thirty-

six monthly contributions prior to the

semester of death: Provided, further, Thatif the foregoing condition is not satised his

primary beneciaries shall be entitled to a


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lump sum benet equivalent to thirty-ve

times the monthly pension: Provided, further,

That if he has no primary beneciaries, his

secondary beneciaries shall be entitled to a

lump sum benet equivalent to twenty times

the monthly pension: Provided, however,

That the minimum death benet shall not be

less than the total contributions paid by himand his employer on his behalf nor less than

one thousand pesos: Provided, nally, That

the beneciaries of the covered employee

who dies without having paid at least three

monthly contributions shall be entitled to

the minimum benet. (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 benets.

(a) Upon the covered employees permanent

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 to themonthly pension and his dependents to

the dependents Pension: Provided, That

if the disability occurs before he has paid

thirty-six monthly contributions prior

to the semester of disability, he shall be

entitled to a lump sum benet equivalent

to thirty-ve times the monthly pension:Provided, further, That the minimum

disability benet shall not be less than


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the total contributions paid by him and

his employer on his behalf nor less than

one thousand pesos: Provided, further,

That a covered employee who becomes

permanently totally disabled without

having paid at least three monthly

contributions shall be entitled to the

minimum benet: Provided, nally, Thata member who (1) received a lump sum

benet and (2) is re-employed not earlier

than one year from date of his disability

shall again be subject to compulsory

coverage and considered a new member.


S-1977)(b) The monthly pension shall be reduced

upon his re-employment by an amount

equivalent to one-half of his earnings

over three hundred pesos. The monthly

pension and dependents pension shall

be suspended upon his recovery from the

permanent total disability, or his failure topresent himself for examination at least

once 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 primary beneciaries

as of the date of disability shall be entitledto eighty per cent of the monthly pension

and his dependents to the dependents


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pension: Provided, That if he has no primary

beneciaries and he dies within sixty months

from the start of his monthly pension, his

secondary beneciaries shall be entitled to a

lump sum benet equivalent to the bigger

of (1) twenty times the monthly pension

or (2) the difference of sixty times the

monthly pension and the total monthlypensions paid by 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)

(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 andapproved 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

benet shall be such percentage of thelump sum benefit described in the

preceding paragraph with due regard to


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S-1975 and Sec. 9, P.D. No. 1636,

S-1979)

(g) The percentage degree of disability,

which is equivalent to the ratio that

the designated number of months of

compensability bears to seventy-ve,

rounded to the next higher integer,shall not be additive for distinct,

separate and unrelated permanent

partial disabilities, but shall be additive

for deteriorating and related permanent

partial disabilities, to a maximum

of one hundred per cent, in which

case the employee shall be deemedas permanently totally disabled. (As

amended by Sec. 9, P.D. No. 1636,

S-1979)

Section 13-B.Funeral Benet. A funeral grant of two

thousand pesos shall be paid to help defray

the cost of funeral expenses upon the death

of a covered member, permanently totallydisabled 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 Benet.

(a) A covered employee who has paid at

least three monthly contributions inthe twelve-month period immediately

preceding the semester of sickness


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and is conned for more than three

days in a hospital or elsewhere with the

Commissions approval, shall, for each

day of compensable connement or

fraction thereof, be paid by his employer,

or the SSS, if such person is unemployed,

an allowance equivalent to ninety per cent

of his average daily salary credit, subjectto 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 than

seven pesos and fty centavos nor

exceed seventy-ve pesos nor paid

longer than one hundred twentydays in one calendar year; nor shall

any unused portion of the one

hundred twenty days of sickness

benet granted under this section

be carried forward and added to the

total number of compensable 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 benet for more than two

hundred forty days on account of

the same connement; and(3) The employee shall notify his

employer of the fact of his sickness


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or injury within ve calendar days

after the start of his connement

unless such connement is in a

hospital or the employee became

sick or was injured while working or

within the premises of the employer

in which case notication to the

employer is not necessary: Provided,That if the member is unemployed

he shall directly notify the SSS of

his connement within ve calendar

days after the start thereof unless

such connement is in a hospital in

which case notication is also not

necessary: Provided, further, That incases where notication is necessary,

the connement shall be deemed to

have started not earlier than the fth

day immediately preceding the date

of notication. (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 rst day of sickness, and

the payment of such allowances shall be

promptly made by the employer every

regular payday or on the fteenth andlast day of each month, and similarly

in the case of direct payment by the


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SSS, for as long as such allowances are

due and payable: Provided, That such

allowance shall begin only after all sick

leaves of absence with full pay to the

credit of the employee shall have been

exhausted. (As amended by Sec. 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)

(c) One hundred per cent of the daily

benets provided in the preceding

paragraph shall be reimbursed by the

SSS to said employer upon receipt of

satisfactory proof of such payment

and legality thereof: Provided, Thatthe employer has notied the SSS of

the connement within ve calendar

days after receipt of the notication

from the employee: Provided,

further, That if the notication to the

SSS is made by the employer beyond

ve calendar days after receipt ofthe notication from the employee,

said employer shall be reimbursed

only for each day of connement

starting from the tenth calendar day

immediately preceding the date of

notication to the SSS: Provided,

nally, That the SSS shall reimbursethe employer or pay the unemployed

member only for connement within


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the one year period immediately

preceding the date the claim for

benet or reimbursement is received

by the SSS, except connement in a

hospital in which case the claim for

benet or reimbursement must be

led within one year from the last day

of connement. (As amended 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 notication but the employer fails

to notify the SSS of the connement or to

le the claim for reimbursement within theperiod prescribed in this section resulting

in the reduction of the benet or denial of

the claim such employer shall have no

right to recover the corresponding daily

allowance he advanced to the employee

as required in this section. (As amended

by 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 by the employer within one

month after the period prescribed hereinfor adjudication the reimbursement

shall thereafter earn simple interest of


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one per cent per month until paid. (As


(f) The provisions regarding the notication

required of the covered employee and

the employer as well as the period

within which the claim for benefit or

reimbursement may be led shall apply

to all claims led with the SSS beginningJanuary 1, 1973. (As amended by Sec. 8,

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

Section 14-A.Maternity Leave Benet. A covered female

employee who has paid at least three monthly

maternity contributions in the twelve-

month period preceding the semester of her

childbirth, abortion, or miscarriage and whois currently employed shall be paid a daily

maternity benet equivalent to one hundred

per cent of her present basic salary, allowances

and other benets or the cash equivalents

of such benets for sixty days subject to the

following conditions:

(a) That the employee shall have notiedher employer of her pregnancy and

the probable date of her childbirth

which notice shall be transmitted to the

SSS in accordance with the rules and

regulations it may provide;

(b) That the payment shall be advanced by

the employer in two equal installmentswithin thirty days from the ling of the

maternity leave application;


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(c) That in case of caesarian delivery,

the employees shall be paid the daily

maternity benet for seventy-eight days;

(d) That payment of daily maternity benets

shall be a bar to the recovery of sickness

benets provided by this Act for the same

compensable period of sixty days for the

same childbirth, abortion, or miscarriage;(e) That the maternity benets provided under

this section shall be paid only for the rst

four deliveries after March 13, 1973;

(f) That the SSS shall immediately reimburse

the employer of one hundred per cent

of the amount of maternity benets

advanced to the employee by the employerupon receipt of satisfactory proof of such

payment and legality thereof; and

(g) That if an employee should give birth or

suffer abortion or miscarriage without

the required contributions having been

remitted for her by her employer to the

SSS, or without the latter having beenpreviously notied by the employer of

time of the pregnancy, the employer shall

pay to the SSS damages equivalent to

the benets which said employee would

otherwise have been entitled to, and the

SSS shall in turn pay such amount to the

employee concerned. (As amended bySec. 7, P.D. No. 1202, S-1977; Sec. 11,

P.D. No. 1636, S-1979; and R.A. 7322)


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Section 15. Non-transferability of Benets. The SSS

shall pay the benets provided for in this Act

to such persons as may be entitled thereto

in accordance with the provisions of this

Act: Provided, That the beneciary who

is a national of a foreign country which does

not extend benets to a Filipino beneciary

residing in the Philippines, or which is notrecognized by the Philippines, shall not be

entitled to receive any benet under this Act:

Provided, further, That notwithstanding the

foregoing, where the best interest of the SSS

will be served, the Commission may direct

payments without regard to nationality or

country of residence: Provided, further,That if the recipient is a minor or a person

incapable of administering his own affairs, the

Commission shall appoint a representative

under such terms and conditions as it may

deem proper: Provided, further, That such

appointment shall not be necessary in case

the recipient is under the custody of or livingwith the parents or spouse of the employee

in which case the benets shall be paid to

such parents or spouse, as representative

payee of the recipient. Such benets are not

transferrable and no power of attorney or

other document executed by those entitled

thereto, in favor of any agent, attorney, orany other person for the collection thereof on

their behalf shall be recognized, except when


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they are physically unable to collect personally

such benets: Provided, further, That in case

of death benets, if no beneciary qualies

under this Act, said benets shall be paid

to the legal heirs in accordance with the

law of succession: Provided, nally, That

notwithstanding any law to the contrary,

the payment of benets under this Act shallbar the recovery of similar benets under

Title II of Book IV of the Labor Code of the

Philippines, as amended, during the period

of such payment for the same contingency,

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 contrary notwithstanding

the SSS and all its assets and properties,

all contributions collected and all accruals

thereto and income or investment earnings

therefrom as well as all supplies, equipment,papers or documents which may be required

in connection with the operation or execution

of this Act shall be exempt from any tax,

assessment, fee, charge, or customs or import

duty; and all benet payments made by the

SSS shall likewise be exempt from all kinds of

taxes, fees or charges, and shall not be liableto attachments, garnishments, levy

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Compendium of Right to Food Laws in the Philippines - Vol. II - Part 2

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