An Act Rationalizing and Expanding the Powers and Duties of the Social Security Commission to Ensure the Long-Term Viability of the Social Security System, Repealing for the Purpose Republic Act No. 1161, as Amended by Republic Act No. 8282, Otherwise Known as the "Social Security Act of 1997"

Seventeenth Congress
Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand eighteen.

REPUBLIC ACT No. 11199

An Act Rationalizing and Expanding the Powers and Duties of the Social Security Commission to Ensure the Long-Term Viability of the Social Security System, Repealing for the Purpose Republic Act No. 1161, as Amended by Republic Act No. 8282, Otherwise Known as the "Social Security Act of 1997"

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. Short Title. - This Act shall be known as the "Social Security Act of 2018".

Section 2. Declaration of Policy. - It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-exempt social security system suitable to the needs of the people throughout the Philippines which shall promote social justice through savings, and ensure meaningful social security protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. Towards this end. the State shall endeavor to extend social security protection to Filipino workers, local or overseas, and their beneficiaries.

In the pursuit of this policy, a social security program shall be developed emphasizing the value of "work, save, invest and prosper". The maximum profitability of investible funds and resources of the program shall be ensured through a culture of excellence in management grounded upon sound and efficient policies employing internationally recognized best practices.

Section 3. Social Security System -

Section 4. Powers and Duties of the Commission and SSS -

Section 5. Settlement of Disputes -

Section 6. Auditor and Counsel. -

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

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

Section 9. Coverage -

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

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

Section 9-B. Compulsory Coverage of Overseas Filipino Workers (OFWs) -

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

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

Section 11-A. Effect of Interruption of Business or Professional Income. - If the self-employed member realizes no income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section 22-A hereof.

Section 12. Monthly Pension.— -

Section 12-A. Dependents’ Pension. - Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (₱250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate and illegitimate children, the former shall be preferred.

Section 12-B. Retirement Benefits. -

Section 13. Death Benefits. - Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher.

Section 13-A. Permanent Disability Benefits. -

Section 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve thousand pesos (₱12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree.

Section 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average daily salary credit, subject to the following conditions:

Section 14-A. Maternity Leave Benefit. - A female member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject to the following conditions:

Section 14-B. Unemployment. Insurance or Involuntary Separation Benefits. - A member who is not over sixty (60) years of age who has paid at least thirty-six (36) months contributions twelve (12) months of which should be in the eighteen-month period immediately preceding the involuntary unemployment or separation shall be paid benefits in the form of monthly cash payments equivalent to fifty percent (50%) of the average monthly salary credit for a maximum of two (2) months: Provided, That an employee who is involuntarily unemployed can only claim unemployment benefits once every three (3) years: Provided, further, That in case of concurrence of two or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe.

Section 15. Non-Transferability of Benefits. - The SSS shall promptly pay the benefits provided in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act: Provided, That the SSS shall pay the retirement benefits on the day of contingency to qualified members who have submitted the necessary documents at least six (6) months before: Provided, further, That the beneficiary who is a national of a foreign country which does not extend benefits to a Filipino beneficiary residing in the Philippines, or which is not recognized by the Philippines, shall not be entitled to receive any benefit 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 living with the parents or spouse of the member in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient. Such benefits are not transferable and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney or any other person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits: Provided, further That in case of death benefits, if no beneficiary qualifies under this Act, said benefits shall be paid to the legal heirs in accordance with the law of succession.

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 shall be exempt from any tax, assessment, fee, charge, or customs or import duty; and all benefit payments made by the SSS shall likewise be exempt from all kinds of taxes, fees or charges, and shall 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 person or persons entitled thereto, except to pay any debt of the member to the SSS. No tax measure of whatever nature enacted shall apply to the SSS, unless it expressly revokes the declared policy of the State in Section 2 hereof granting tax-exemption to the SSS. Any tax assessment imposed against the SSS shall be null and void.

Section 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other person in charge of the preparation, filing or pursuing any claim for benefit under this Act shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Act for the payment of fees for such services is prohibited: Provided, however, That any member of the Philippine Bar who appears as counsel in any case heard by the Commission shall be entitled to attorney‘s fees not exceeding ten percent (10%) of the benefits awarded by the Commission, which fees shall not be payable before the actual payment of the benefits, 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 less than Five hundred pesos (₱500.00) nor more than Five thousand pesos (₱5,000.00). or imprisonment for not less than six (6) months nor more than one (1) year, or both, at the discretion of the court.

Section 18. Employee’s Contributions. - Beginning on the last day of the calendar month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee’s monthly salary, wage, compensation or earnings, the employee’s contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the monthly salary credits, the schedule and the rate of contributions as may be determined and fixed by the Commission, subject to the provisions of Section 4(a)(9) of this Act.

The monthly salary credits, the schedule and the rate of contributions shall also apply to self-employed, voluntary, and other members.

Section 19. Employer’s Contributions. -

Section 19-A. Contributions of the Self-Employed Member. - The contributions to the SSS of the self-employed member shall be determined in accordance with the schedule provided in this Act: Provided, That the monthly earnings declared by the self-employed member at the time of his registration with the SSS shall be considered as his monthly compensation and he shall pay both the employer and the employee contributions: Provided, further, That the contributions of self-employed persons earning One thousand pesos (₱1,000.00) monthly or below may be reduced by the Commission.

The monthly earnings declared by the self-employed member at the time of his registration shall remain the basis of his monthly salary credit, unless he makes another declaration of his monthly earnings, in which case such latest declaration becomes the new basis of his monthly salary credit.

Section 20. Government Contribution. - As the contribution of the Government to the operation of the SSS, Congress shall annually appropriate out of any funds in the National Treasury not otherwise appropriated, the necessary sum or sums to meet the estimated expenses of the SSS for each ensuing year. In addition to this contribution, Congress shall appropriate from time 10 time such sum or sums as may be needed to assure the maintenance of an adequate working balance of the funds of the SSS as disclosed by suitable periodic actuarial studies to be made of the operations of the SSS.

Section 21. Government Guarantee. - The benefits prescribed in this Act shall not be diminished and to guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the SSS.

Section 22. Remittance of Contributions -

Section 22-A. Remittance of Contributions of Self-Employed Member. - Self-employed members shall remit their monthly contributions quarterly on such dates and schedules as the Commission may specify through rules and regulations: Provided, That no retroactive payment of contributions shall be allowed, except as provided in this Section.

Section 23. Method of Collection and. Payment. - The SSS shall require a complete and proper collection and payment of contributions and proper identification of the employer and the employee. Payment may be made in cash, checks, stamps, coupons, tickets, or other reasonable devices that the Commission may adopt.

Section 24. Employment Records and Reports. -

Section 24-A. Report and. Registration of the Self-Employed Member. - Each covered self-employed member shall, within thirty (30) days from the first day he started the practice of his profession or business operations, register and report to the SSS his name, age, civil status, and occupation, average monthly net income and his dependents.

Section 25. Deposit and Disbursements. - All money 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 conditions and requirements as provided by law for other public special funds: Provided, That not more than twelve percent (12%) of the total yearly contributions plus three percent (3%) of other revenues shall be disbursed for administrative and operational expenses such as salaries and wages, supplies and materials, depreciation, and the maintenance of offices of the SSS: Provided, further, That if the expenses in any year are less than the maximum amount permissible, the difference shall not be availed of as additional expenses in the following years.

Section 26. Investment of Reserve Funds. - All revenues of the SSS that are not needed to meet the current administrative and operational expenses incidental to the 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 the current benefit obligations thereof shall be known as the "Investment Reserve Fund" which the Commission shall manage and invest with the skill, care, prudence and diligence necessary to earn an annual income not less than the average rates of treasury bills or any other acceptable market yield indicator in any or in all of the following undertaking, under such rules and regulations as may be prescribed by the Commission: Provided, That investments shall satisfy the requirements of liquidity, safety/ security and yield in order to ensure the actuarial solvency of the funds of the SSS: Provided, further, That the SSS shall submit an annual report on all investments made to both the Senate and House of Representatives:

No portion of the Investment Reserve Fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or -controlled corporations, except as may be allowed under this Act: Provided, That no portion of the Investment Reserve Fund shall be invested for any purpose or any instrument, institution or industry over and above the prescribed cumulative ceilings as follows:

Section 26-A. Fund Managers. - As part of its investment operations, the SSS may appoint local or, in the absence thereof, foreign fund managers to manage the Investment Reserve Fund, as it may deem appropriate.

Section 26-B. Mortgagor Insurance Account. -

Section 27. Records and Reports. - The SSS President shall keep and cause to keep records of operations of the funds of the SSS and of disbursements thereof and all accounts of payments made out of said funds. During the month of January of each year, the SSS President shall prepare for submission to the President of the Philippines and to Congress of the Philippines a report of operations of the SSS during the preceding year, including statistical data on the number of persons covered and benefited, their occupations and employment status, the duration arid amount of benefits paid, the finances of the SSS at the close of the said year, and recommendations. He shall also cause to be published in two (2) newspapers of general circulation in the Philippines a synopsis of the annual report, showing in particular the status of the finances of the SSS and the benefits administered.

Section 28. Penal Clause. -

Section 29. Government Aid. - The establishment of the SSS shall not disqualify the members and employers from receiving such government assistance, financial or otherwise, as may be provided.

Section 30. Implementing Rules and Regulations. - The Commission shall promulgate the necessary rules and regulations to implement this Act not later than ninety (90) days after its effectivity.

Section 31. Transitory Clause. - Any employer who is delinquent or has not remitted all contributions due and payable to the SSS may, within six (6) months from the effectivity of this Act, remit said contributions or submit a proposal to pay the. same in installment within a period as approved by the Commission from the effectivity of this Act without incurring the prescribed penalty, subject to the implementing rules and regulations which the Commission may prescribe: Provided, That the employer submits the corresponding collection lists together with the remittance or proposal to pay in installments: Provided, further, That in case the employer fails to remit contributions within the six-month grace period or defaults in the payment of any amortization provided in the approved proposal, the prescribed penalty shall be imposed from the time the contributions first became due as provided in Section 22(a) hereof: Provided, finally, That upon approval and payment in full or in installments of contributions due and payable to the SSS, any pending case filed against the employer shall be withdrawn without prejudice to the (i) refiling of the case in the event the employer fails to remit in full the required delinquent contributions or defaults in the payment of any installment under the approved proposal and (ii) the reimposition of the prescribed penalty from the time the contributions first became due as provided in Section 22(a) hereof.

Section 32. Separability Clause. - If, for any reason, any part, section, or provision of this Act is held invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be in full force and effect.

Section 33. Repealing Clause. - Republic Act No. 1161 and Republic Act No. 8282 and all other laws, proclamations, executive orders, rules and regulations or parts thereof inconsistent with this Act are hereby repealed, modified or amended accordingly: Provided, That no person shall be deemed to be vested with any property or other right by virtue of the enactment or operation of this Act.

Approved,

GLORIA MACAPAGAL-ARROYO
Speaker of the House of Representatives

VICENTE C. SOTTO III
President of the Senate

This Act which is a consolidation of Senate Bill No. 1753 and House Bill No. 2158 was passed by the Senate and the House of Representatives on November 28, 2018.

DANTE ROBERTO P. MALING
Acting Secretary General
House of Representatives

MYRA MARIE D. VILLARICA
Secretary of the Senate

Approved: February 7, 2019

(Sgd.) RODRIGO ROA DUTERTE
President of the Philippines