Presidential Decree No. 1636

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PRESIDENTIAL DECREES





PRESIDENTIAL DECREE NO. 1636


PRESIDENTIAL DECREE NO. 1636 - FURTHER AMENDING REPUBLIC ACT NO. 1161 OTHERWISE KNOWN AS SOCIAL SECURITY LAW




WHEREAS, under Article II Sec. 7 of the Constitution of the Philippines, it is the declared policy of the State to "establish, maintain and ensure adequate social services in the field of . . . social security to guarantee the enjoyment by the people of a decent standard of living";

WHEREAS, under Sec. 2 of the Social Security Law, it is the declared policy of the Republic of the Philippines to "establish, develop, promote and perfect a sound and viable tax-exempt social security service suitable to the needs of the people throughout the Philippines. . with a view to promote their well-being in the spirit of social justice";

WHEREAS, in view of the increased membership and judicious management of funds by the Social Security System, it is now again feasible for the SSS to further increase benefits to cushion the rising cost of living of its members in the light of changing economic conditions;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:

Section 1.chanroblesnad Paragraph (c) of Sec. 4 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 4.chanroblesnad Powers and Duties of the Commission.

"(c)chanroblesnad To insure the making of the necessary actuarial studies and calculations concerning increases in benefits and the financial stability of the SSS and to provide for the feasible increases in benefits 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 stability or solvency of the reserve fund shall be guaranteed, and Provided, further, That such increases in benefits shall not require any increase in contribution."

Sec. 2.chanroblesnad Paragraphs (a), (c) and (d) of Sec. 8 of Republic Act No. 1161 are hereby amended and paragraphs (q) and (r) are added thereto to read as follows:

"Sec. 8.chanroblesnad Terms defined. For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings:

"(a)chanroblesnad SSS The Social Security System created by this Act.

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

"(d)chanroblesnad 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 such services, where there is an employer-employee relationship; Provided, That a self-employed professional shall be both employee and employer at the same time.

"(q)chanroblesnad Replacement ratio. The sum of twenty percent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average monthly salary credit.

"(r)chanroblesnad Credited years of service. For a member covered prior to January 1975, nineteen hundred and seventy five minus the calendar years of coverage plus the number of calendar years in which six or more contributions have been paid from January 1975 up to the calendar years 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 the contingency."

Sec. 3.chanroblesnad Sec. 9 of Republic Act No. 1161 is hereby amended by adding Sec. 9-A thereto to read as follows:

"Sec. 9-A.chanroblesnad Compulsory coverage of the self-employed. Coverage in the SSS shall also be compulsory upon all self-employed persons earning P1,800.00 or more per annum: Provided, That the effectivity of coverage of certain groups of self-employed shall be determined by the Commission under such rules and regulations it may prescribe: Provided, further, That the effectivity of the coverage of the following self-employed persons shall be in accordance with Section 10 (b) hereof:

"1.chanroblesnad All self-employed professionals licensed by the Professional Regulations Commission or those licensed to practice law.

"2.chanroblesnad Partners and single proprietors of businesses.

"3.chanroblesnad Actors and actresses, directors, script writers and news correspondents who do not fall within the definition of the term "employee" in Sec. 8(d) of this Act.

"4.chanroblesnad Professional athletes, coaches, trainers licensed by the Games and Amusement Board as well as jockeys and trainers licensed by the Philippine Racing Commission.

Unless otherwise specified herein, all provisions of the SS Law applicable to cover employees shall also be applicable to the covered self-employed persons."

Sec. 4.chanroblesnad Section 10 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 10.chanroblesnad 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 self-employed persons referred to in paragraph (1) to (4) shall take effect on the first 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."

Sec. 5.chanroblesnad Section 11 of Republic Act No. 1161 is hereby amended by adding Section 11-A to read as follows:

"Sec. 11-A.chanroblesnad Effect of interruption of business or professional income. 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 separated covered employees."

Sec. 6.chanroblesnad Section 12 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 12.chanroblesnad Monthly pension. (a) The monthly pension shall be the sum of the following:

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

One and a half percent of the average monthly salary credit for each credited year of service in excess of ten years.

"(b)chanroblesnad The monthly pension shall in no case be less than one hundred twenty pesos nor paid in an aggregate amount of less than sixty times the monthly pension except to a secondary beneficiary: Provided, That the monthly pension of surviving pensioners shall be increased by twenty percent."

Sec. 7.chanroblesnad Section 12-b of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 12-B.chanroblesnad Retirement benefits. (a) A covered employee who had 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-five years, shall be entitled for as long as he lives to the monthly pension: Provided, That his dependents born before his retirement of a marriage subsisting when he was fifty-seven years old shall be entitled to the dependents' pension.

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

"(c)chanroblesnad The monthly pension shall be reduced upon the re-employment of a retired employee who is less than sixty-five years old by an amount equivalent to one-half his earnings over three hundred pesos. He shall again be subject to section eighteen and his employer to section nineteen of this Act.

"(d)chanroblesnad Upon the death of the retired employee pensioner, his primary beneficiaries shall be entitled to eighty percent of the monthly pension and his dependents to the dependent' pension: Provided, That if he has no primary beneficiaries and he dies within sixty months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the smaller 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."

Sec. 8.chanroblesnad Section 13 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 13.chanroblesnad Death benefits. Upon the covered employee's death, his primary beneficiaries 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, That if the foregoing conditions is not satisfied his primary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-five times the monthly pension: Provided, further, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump slum benefit equivalent to twenty times the monthly pension: Provided, however, That the minimum death benefit shall be not less than the total contributions paid by him and his employer on his behalf nor less than one thousand pesos: Provided, finally, That the beneficiaries of the covered employee who dies without having paid at least three monthly contributions shall be entitled to the minimum benefit."

Sec. 9.chanroblesnad Section 13-A of Republic Act No. 1161 is hereby to read as follows:

"Sec. 13-A.chanroblesnad Permanent disability benefits. (a) Upon the covered employee's 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 the monthly 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 benefit equivalent to thirty-five times the monthly pension: Provided, further, That the minimum disability benefit shall not be less than 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 benefit: Provided, finally, That a member who (1) received a lump sum benefit and (2) is re-employed not earlier than one year from the date of his disability shall again be subject to compulsory coverage and considered new member.

"(b)chanroblesnad 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 dependent's pension shall be suspended upon his recovery from the permanent total disability, or his failure to present himself for examination at least once a year upon notice by the SSS.

"(c)chanroblesnad Upon the death of the permanent total disability pensioner, his primary beneficiaries shall be entitled to eighty percent of the monthly pension and his dependents to the dependents' pension: Provided, That if he has no primary beneficiaries and he dies within sixty months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the smaller 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.

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

1.chanroblesnad Complete loss of sight of both eyes;

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

3.chanroblesnad Permanent complete paralysis of two limbs;

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

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

"(e)chanroblesnad 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 benefit shall be such percentage of the lump sum benefit described in the preceding paragraph with due regard to the decree of disability as the Commission may determine.

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

COMPLETE AND PERMANENTchanroblesnadchanroblesnadchanroblesnadchanroblesnad NUMBER OF
chanroblesnadchanroblesnad LOSS OF USE OFchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnad MONTHS

chanroblesnad One thumbchanroblesnad 10
chanroblesnad One index fingerchanroblesnad 8
chanroblesnad One middle fingerchanroblesnad 6
chanroblesnad One ring fingerchanroblesnad 5
chanroblesnad One little fingerchanroblesnad 3
chanroblesnad One big toechanroblesnad 6
chanroblesnad One handchanroblesnad 39
chanroblesnad One armchanroblesnad 50
chanroblesnad One footchanroblesnad 31
chanroblesnad One legchanroblesnad 46
chanroblesnad One earchanroblesnad 10
chanroblesnad Both earschanroblesnad 20
chanroblesnad Hearing of one earschanroblesnad 10
chanroblesnad Hearing of both earschanroblesnad 50
chanroblesnad Sight of one eyechanroblesnad 25

"(g)"chanroblesnad The percentage degree of disability, which is equivalent to the ration that the designated number of months of compensability bears to seventy-five, 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 percent, in which case the employees shall be deemed as permanently totally disabled."

Section 10.chanroblesnad Paragraph (a) of Section 14 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 14.chanroblesnad Sickness benefit. (a) A covered employee who has paid at least three monthly contributions in the twelve-month period immediately preceding the semester of sickness and is confined for more than three days in a hospital or elsewhere with the Commission's approval, shall for each day of compensable confinement or fraction thereof be paid by his employer, of the SSS, if such person is unemployed, an allowance equivalent to eighty-five percent of his average daily salary credit, subject to the following conditions:

"(1)chanroblesnad In no case shall be the total amount of such daily allowance be less than four pesos nor exceed twenty pesos nor paid longer than one hundred twenty days in one calendar year; nor shall any unused portion of the one hundred twenty days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year;

"(2)chanroblesnad No employee shall be paid any sickness benefit for more than two hundred forty days on account of the same confinement; and

"(3)chanroblesnad The employee shall notify his employer of the fact of his sickness or injury within five calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case notification to the employer is not necessary: Provided, That if the member is unemployed he shall directly notify the SSS of his confinement within five calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification."

Section 11.chanroblesnad Section 14-A of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 14-A.chanroblesnad Maternity leave benefit. A covered female employee who has paid at least three monthly contributions in the twelve-month period immediately preceding the semester of her childbirth, abortion, or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred percent of her average daily salary credit for forty-five days subject to the following conditions:

"(a)chanroblesnad That the employee shall have notified her 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)chanroblesnad That payment shall be advanced by the employer in two equal installments within thirty days from the filing of the maternity leave application;

"(c)chanroblesnad That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same compensable period of forty-five days for the same childbirth, abortion, or miscarriage;

"(d)chanroblesnad That the maternity benefits provided under this Section shall be paid only for the first four deliveries after March 13, 1973;

"(e)chanroblesnad That the SSS shall immediately reimburse the employer of one hundred percent of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof;

"(f)chanroblesnad 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 been previously notified by the employer of time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the employee concerned.

Section 12.chanroblesnad Section 18 and Section 18-A of Republic Act No. 1161 are hereby combined and amended to read as follows:

"Sec. 18.chanroblesnad Employee's contribution. (a) Beginning as of 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 following schedule effective on January 1, 1980:

Salarychanroblesnad Monthlychanroblesnad chanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnadchanroblesnad Monthly Contribution
Bracketchanroblesnad Range ofchanroblesnad Salary
Numberchanroblesnad Compensationchanroblesnad Creditchanroblesnad Employerchanroblesnad Employeechanroblesnad Total

chanroblesnad Ichanroblesnad P1 -P49.99chanroblesnad P25chanroblesnad P1.70chanroblesnad P0.40chanroblesnad 2.10
chanroblesnad IIchanroblesnad 50- 99.99chanroblesnad 75chanroblesnad 4.30chanroblesnad 2.00chanroblesnad 6.30
chanroblesnad IIIchanroblesnad 100- 149.99chanroblesnad 125chanroblesnad 6.40chanroblesnad 4.10chanroblesnad 10.50
chanroblesnad IVchanroblesnad 150- 199.99chanroblesnad 175chanroblesnad 9.00chanroblesnad 5.70chanroblesnad 14.70
chanroblesnad Vchanroblesnad 200- 249.99chanroblesnad 225chanroblesnad 11.40chanroblesnad 7.50chanroblesnad 18.90
chanroblesnad VIchanroblesnad 250- 349.99chanroblesnad 300chanroblesnad 15.20chanroblesnad 10.00chanroblesnad 25.20
chanroblesnad VIIchanroblesnad 350- 499.99chanroblesnad 425chanroblesnad 21.60chanroblesnad 14.10chanroblesnad 35.70
chanroblesnad VIIIchanroblesnad 500- 699.99chanroblesnad 600chanroblesnad 30.40chanroblesnad 20.00chanroblesnad 50.40
chanroblesnad IXchanroblesnad 700- 899.99chanroblesnad 800chanroblesnad 40.50chanroblesnad 26.70chanroblesnad 67.20
chanroblesnad Xchanroblesnad 900- overchanroblesnad 1000chanroblesnad 50.70chanroblesnad 33.30chanroblesnad 84.00

"(b)chanroblesnad Every employer shall issue a receipt for all contributions deducted from the employee's compensation or shall indicate such deductions on the employee's pay envelopes."

Section 13.chanroblesnad Paragraph (b) of Section 19 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 19.chanroblesnad Employer's contributions.

"(b)chanroblesnad The remittance of such contributions by the employer shall be supported by a quarterly collection list to be submitted to the SSS at the end of each calendar quarter indicating the correct ID number of the employer, the correct names and SSS numbers of the employees and the total contributions paid for their account during the quarter."

Section 14.chanroblesnad Section 19 of Republic Act No. 1161 is hereby amended by adding Section 19-A thereto to read as follows:

"Sec. 19-A.chanroblesnad Contributions of the self-employed. The contributions to the SSS of the self-employed shall be determined in accordance with Section 18 of this Act: Provided, That the average monthly net earnings declared by the self-employed at the time of his registration with the SSS shall be considered as his monthly compensation and he shall pay both the employer and employee contributions.

Net earnings as understood under this section shall be the net income from his business or profession as reflected in the income tax return for the immediately preceding year, excluding rental incomes, dividend, interest investments and the like or all types of incomes which are not derived from his business registered with the SSS or from the practice of his profession.

The average monthly net 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, at the start of the year, another declaration of his average monthly net earnings based on his income tax returns for the immediately preceding year, in which case such latest declaration become the new basis of his monthly salary credit."

Section 15.chanroblesnad Paragraph (b) of Sec. 22 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 22.chanroblesnad Remittance of contributions.

"(b)chanroblesnad The contributions payable under this Act in cases where an employer refuses or neglects to pay the same shall be collected by the SSS in the same manner as taxes are made collectible under the National Internal Revenue Code, as amended. Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudiced the right of the covered employee to the benefits of the coverage.

The right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be."

Section 16.chanroblesnad Sec. 22 of Republic Act No. 1161 is hereby amended by adding Sec. 22-A thereto to read as follows:

"Sec. 22-A.chanroblesnad Remittance of contributions of self-employed. Self-employed members shall remit their monthly contributions quarterly on such dates and schedules, as the commission may specify through rules and regulations.

The penalty of three percent per month for late payments provided for in paragraph (a) of Sec. 22 of this Act and the manner of collection of contributions specified in paragraphs (b), (c) and (d) of Sec. 22 of this Act are also applicable to the collection of penalties and contributions of the covered self-employed."

Section 17.chanroblesnad Paragraph (b) of Sec. 24 of Republic Act No. 1161 is hereby amended and paragraph (c) is added thereto to read as follows:

"Sec. 24.chanroblesnad Employment Records and Reports.

"(b)chanroblesnad Should the employer misrepresent the true date of employment of his employees or remit to the SSS contributions which are less than those required in this Act, resulting in a deduction of benefits, the employer shall pay to the SSS damages to the extent of such reduction.

"(d)chanroblesnad In addition to the liability mentioned the preceding paragraphs (a) and (b) hereof, the employer shall also be liable for the payment of the corresponding unremitted contributions and penalties thereon."

Section 18.chanroblesnad Sec. 24 of Republic Act No. 1161 is hereby amended by adding Sec. 24-A thereto to read as follows:

"Sec. 24-A.chanroblesnad Report and Registration of the Self-Employed. Each covered self-employed person shall, within thirty (30) days from the effective date of coverage, report to the SSS his name, age, civil status, and occupation, average monthly net income and his dependents: Provided, That if after said period of thirty days, he should die or become sick or disabled or reach the age of sixty (60) without the SSS having previously received such report, the SSS shall not pay him the corresponding benefit."

Section 19.chanroblesnad The first paragraph of Sec. 26 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 26.chanroblesnad Investment of reserve funds. All revenues of the SSS as 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" which shall be used exclusively for the payment of the benefits under this Act, and no amount thereof shall be withdrawn or used for any other purpose. Such portions of the reserve fund as are not needed to meet the current benefit obligations thereof shall be invested to earn an average annual income of at least nine percent. Five percent shall be invested in bank deposits to be known as the "Contingency Reserve Fund" to meet and cover contingent and extra-ordinary disbursements for death, sickness and disability claims under this Act, and the remaining balance shall be credited to a fund to be known as the "Investment Reserve Fund" to be invested by the Commission in any or all of the following ways only."

Sec. 20.chanroblesnad Paragraph (e) of Sec. 28 of Republic Act No. 1161 is hereby amended to read as follows:

"Sec. 28. Penal Clause.

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

Sec. 21.chanroblesnad Effectivity. This decree shall take effect on January 1, 1980.

Done in the City of Manila, this 7th day of September, in the year of Our Lord, nineteen hundred and seventy-nine.

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