REVIEWER IN REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

CHAPTER 3
SOCIAL SECURITY ACT OF 2018
(REPUBLIC ACT NO. 11199)

o Social Security Act of 2018 (Republic Act No. corporations owned or controlled by the
11199) – it is an act rationalizing and expanding government.
the powers and duties of the social security
commission to ensure the long-term viability of B. Employee – it refers to any person who performs
the social security system. services for an employer in which either or both
» Approved: February 7, 2019. mental or physical efforts are used and who
receives compensation for such services, where
there in an employer-employee relationship.
SECTION 2. DECLARATION OF POLICY » Provided, that a self-employed person shall be
both employee and employer at the same time.
It is the policy of the state to establish, develop,
C. Dependents
promote and perfect a sound and viable tax-exempt
social security system suitable to the needs of the The dependents shall be the following:
people throughout the Philippines, which shall
promote social justice through savings, and ensure o The legal spouse entitled by law to receive
meaningful social security protection to members and support from the member.
their beneficiaries against the hazards of disability, o The legitimate, legitimated or legally adopted,
sickness, maternity, old age, death, and other and illegitimate child who is unmarried, not
contingencies resulting in loss of income or financial gainfully employed, and has not reached
burden. Towards this end, the state shall endeavor to twenty-one (21) years of age, or if over
extend social security protection to Filipino workers, twenty-one (21) years of age, he is congenitally
local or overseas, and their beneficiaries. or while still a minor has been permanently
incapacitated and incapable of self-support,
In the pursuit of this policy, a social security program
physically or mentally.
shall be developed emphasizing the value of “work,
save, invest and prosper”. o The parent who is receiving regular support
from the member.
» The maximum profitability of investible funds
and resources of the program shall be ensured D. Compensation – it refers to all actual
through a culture of excellence in management remuneration for employment, including the
grounded upon sound and efficient policies mandated cost-of-living allowance, as well as the
employing internationally recognized best cash value of any remuneration paid in any
practices. medium other than cash, except that part of the
remuneration received during the month in
excess of the maximum salary credit as provided
in this act.
SECTION 8. TERMS DEFINED
E. Monthly Salary Credit – it refers to the
For purposes of this act, the following terms shall, unless compensation base for contributions and
the context indicates otherwise, have the following benefits as indicated in this act.
meanings: » Provided, that in the computation of benefits, the
A. Employer – it refers to any person, natural or maximum monthly salary credit to be considered
juridical, domestic or foreign, who carries on in shall be twenty thousand pesos (₱ 20,000),
the Philippines any trade, business, industry, until adjusted as provided in Section 4(A9).
undertaking, or activity of any kind and uses the F. Employment
services of another person who is under his Any service performed by an employee for his
orders as regards the employment, except the employer except:
government and any of its political subdivisions,
branches or instrumentalities, including o Services where there is no employer-employee
relationship in accordance with existing labor
laws, rules, regulations and jurisprudence.
 H. Contingency – it refers to the retirement, death,
o Service performed in the employ of the
disability, injury or sickness and maternity of the
Philippine government or instrumentality or
member.
agency thereof.
o Service performed in the employ of a foreign I. Average Monthly Salary Credit – it refers to the
government or international organization, or result obtained by dividing the sum of the last
their wholly-owned instrumentality. sixty (60) monthly salary credits immediately
preceding the semester of contingency by sixty
» Provided, however, that this exemption (60), or the result obtained by dividing the sum
notwithstanding, any foreign government, of all the monthly salary credits paid prior to the
international organization or their wholly- semester of contingency by the number of
owned instrumentality employing workers in monthly contributions paid in the same period,
the Philippines or employing Filipinos outside whichever is greater.
of the Philippines, may enter into an
agreement with the Philippine government for » Provided, that the injury or sickness which
the inclusion of such employees in the SSS, caused the disability shall be deemed as the
except those already covered by their permanent disability for the purpose of
respective civil service retirement systems. computing the average monthly salary credit.
» Provided, further, that the terms of such
agreement shall conform with the provisions
of this act on coverage and amount of payment SECTION 9. COVERAGE
of contributions and benefits.
Compulsory Coverage of Employees and their
» Provided, finally, that the provisions of this act Employers – it refers to the coverage in the SSS shall
shall be supplementary to any such be compulsory upon all employees including
agreement. kasambahay’s or domestic workers not over sixty
o Such other services performed by temporary (60) years of age and their employers.
and other employees which may be excluded by Compulsory Coverage of the Self-Employed – it
regulation of the commission. Employees of refers to the coverage in the SSS shall also be
bona fide independent contractors shall not be compulsory upon such self-employed persons as may
deemed employees of the employer engaging be determined by the commission under such rules and
the service of said contractors. regulations as it may prescribe, including but not
G. Beneficiaries – it is the dependent spouse until limited to the following:
he or she remarries, the dependent legitimate, o All self-employed professionals.
legitimated or legally adopted, and illegitimate
children, who shall be the primary beneficiaries o Partners and single proprietors of businesses.
of the member. o Actors and actresses, directors, scriptwriters and
» Provided, that the dependent illegitimate news correspondents who do not fall within the
children shall be entitled to fifty percent definition of the term “employee” in Section 8
(50%) of the share of the legitimate, (D) of this act.
legitimated or legally adopted children.
o Professional athletes, coaches, trainers and
» Provided, further, that in the absence of the jockeys.
dependent legitimate, legitimated or legally
adopted children of the member, his or her o Individual farmers and fishermen.
dependent illegitimate children shall be Compulsory Coverage of Overseas Filipino
entitled to one hundred percent (100%) Workers (OFWs) – it refers to the coverage in the SSS
of the benefits. shall be compulsory upon all sea-based and land-
» In their absence, the dependent parents who based OFWs as defined under Republic Act No. 8042,
shall be the secondary beneficiaries of the otherwise known as the Migrant Workers and
member. Overseas Filipinos Act of 1995, as amended by
» In the absence of all the foregoing, any other Republic Act No. 10022.
person designated by the member as his or » Provided, that they are not over sixty (60)
her secondary beneficiary. years of age.
 » All benefit provisions under this act shall apply
to all covered OFWs. The benefits include,
REMITTANCE OF CONTRIBUTIONS
among others, retirement, death, disability,
funeral, sickness and maternity. The contribution imposed in the preceding section
shall be remitted to the SSS within the first ten (10)
days of each calendar month following the month for
PENSION, RETIREMENT AND OTHER BENEFITS which they are applicable or within such time as the
commission may prescribe.
o Retirement – it is a cash benefit granted either as
a monthly pension or a lump sum amount to a
member who can no longer work due to old age.
METHOD OF COLLECTION AND PAYMENT
o Sickness – it is a daily cash allowance paid for the
number of days a member is unable to work due The SSS shall require a complete and proper collection
to sickness or injury. and payment of contributions and proper
identification of the employer and the employee.
o Disability – it is a cash benefit granted either as Payment may be made in cash, checks, stamps,
a monthly pension or a lump sum amount to a coupons, tickets, or other reasonable devices that the
member who becomes permanently disabled, commission may adopt.
either partially or totally.
o Maternity – it is a daily cash allowance granted
to a female member in every instance of EMPLOYMENT RECORDS AND REPORTS
pregnancy resulting in childbirth, miscarriage or
emergency termination of pregnancy, regardless Each employer shall immediately report to the SSS the
of frequency, her civil status, employment status names, ages, civil status, occupations, salaries and
or the legitimacy of her child. dependents of all his employees who are subject to
compulsory coverage.
o Funeral – a cash benefit given to whomever paid
for the burial expenses of the deceased member
or pensioner.
PENAL CLAUSES
o Death – it is a cash benefit granted either as a
monthly pension or a lump sum amount to the Whoever fails or refuses to comply with the provisions
beneficiaries of a deceased member. of this act or with the rules and regulations
o Unemployment – it is a cash benefit granted to promulgated by the commission, shall be punished by
eligible employees, including house helpers and a fine of not less than five thousand pesos (₱ 5,000)
OFWs who were involuntarily separated from nor more than twenty thousand pesos (₱ 20,000),
employment. or imprisonment for not less than six (6) years and
one (1) day nor more than twelve (12) years, or
both, at the discretion of the court.

EXEMPTIONS FROM TAX, LEGAL PROCESS AND » Provided, that where the violation consists in
LIENS failure or refusal to register employees or
himself, in case of the covered self-employed or
The SSS and all its assets and properties, all to deduct contributions from the employees’
contributions collected and all accruals thereto and compensation and remit the same to the SSS,
income or investment earnings therefrom as well as the penalty shall be a fine of not less five
all supplies, equipment, papers or documents shall be thousand pesos (₱ 5,000) nor more than
exempt from any tax, assessment, fee, charge, or twenty thousand pesos (₱ 20,000) and
customs or import duty. imprisonment for not less than six (6) years
and one (1) day nor more than twelve (12)
All benefit payments made by the SSS shall likewise be
years.
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.