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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1636
PRESIDENTIAL DECREE NO. 1636 -
FURTHER AMENDING REPUBLIC ACT NO. 1161 OTHERWISE KNOWN AS SOCIAL
SECURITY LAW
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chanroblesvirtualawlibrary
WHEREAS,
under Article II Section 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";chanroblesvirtualawlibrary
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";chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
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: chanroblesvirtualawlibrary
Section 1. Paragraph (c) of Section 4 of
Republic Act No. 1161 is hereby amended to read as follows:cralaw:red
"Sec. 4. Powers and Duties of the Commission. —chanroblesvirtualawlibrary
"(c) 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."
Section 2. Paragraphs (a), (c) and (d) of
Section 8 of Republic Act No. 1161 are hereby amended and paragraphs
(q) and (r) are added thereto to read as follows:cralaw:red
"Sec. 8. Terms defined. — For the purposes of this
Act, the following terms shall, unless the context indicates otherwise,
have the following meanings:cralaw:red
"(a) SSS — The Social Security System created by this
Act.
"(c) 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) 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) 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) 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."
Section 3. Section 9 of Republic Act No. 1161
is hereby amended by adding Section 9-A thereto to read as follows:cralaw:red
"Sec. 9-A. 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:cralaw:red
"1. All self-employed professionals licensed by the
Professional Regulations Commission or those licensed to practice law.
"2. Partners and single proprietors of businesses.
"3. Actors and actresses, directors, script writers
and news correspondents who do not fall within the definition of the
term "employee" in Section 8(d) of this Act.
"4. 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."
Section 4. Section 10 of Republic Act No. 1161
is hereby amended to read as follows:cralaw:red
"Sec. 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 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."
Section 5. Section 11 of Republic Act No. 1161 is
hereby amended by adding Section 11-A to read as follows:cralaw:red
"Sec. 11-A. 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."
Section 6. Section 12 of Republic Act No. 1161 is
hereby amended to read as follows:cralaw:red
"Sec. 12. Monthly pension. — (a) The monthly pension
shall be the sum of the following:cralaw:red
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) 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."
Section 7. Section 12-b of Republic Act No.
1161 is hereby amended to read as follows:cralaw:red
"Sec. 12-B. 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) 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. chanroblesvirtualawlibrary
"(c) 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) 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."
Section 8. Section 13 of Republic Act No. 1161
is hereby amended to read as follows:cralaw:red
"Sec. 13. 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."
Section 9. Section 13-A of Republic Act No.
1161 is hereby to read as follows:cralaw:red
"Sec. 13-A. 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. chanroblesvirtualawlibrary
"(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 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) 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) The following disabilities shall be deemed
permanent total:cralaw:red
1. Complete loss of sight of both eyes;chanroblesvirtualawlibrary
2. Loss of two limbs at or above the ankle or wrists;chanroblesvirtualawlibrary
3. Permanent complete paralysis of two limbs;chanroblesvirtualawlibrary
4. Brain injury resulting to incurable imbecility or
insanity; and
5. Such cases as determined and approved by the SSS.
"(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 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. chanroblesvirtualawlibrary
"(f) 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:cralaw:red
COMPLETE AND
PERMANENT
NUMBER OF
LOSS OF USE
OF MONTHS
One thumb 10
One index finger 8
One middle finger 6
One ring finger 5
One little finger 3
One big toe 6
One hand 39
One arm 50
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ears 10
Hearing of both ears 50
Sight of one eye 25
"(g)" 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. Paragraph (a) of Section 14 of Republic
Act No. 1161 is hereby amended to read as follows:cralaw:red
"Sec. 14. 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: chanroblesvirtualawlibrary
"(1) 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;chanroblesvirtualawlibrary
"(2) No employee shall be paid any sickness benefit
for more than two hundred forty days on account of the same
confinement; and
"(3) 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. Section 14-A of Republic Act No. 1161 is
hereby amended to read as follows:cralaw:red
"Sec. 14-A. 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:cralaw:red
"(a) 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; chanroblesvirtualawlibrary
"(b) That payment shall be advanced by the employer
in two equal installments within thirty days from the filing of the
maternity leave application;chanroblesvirtualawlibrary
"(c) 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;chanroblesvirtualawlibrary
"(d) That the maternity benefits provided under this
Section shall be paid only for the first four deliveries after March
13, 1973;chanroblesvirtualawlibrary
"(e) 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;chanroblesvirtualawlibrary
"(f) 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. Section 18 and Section 18-A of Republic
Act No. 1161 are hereby combined and amended to read as follows:cralaw:red
"Sec. 18. 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: chanroblesvirtualawlibrary
Salary Monthly
Monthly Contribution
Bracket Range of Salary
Number Compensation
Credit Employer
Employee Total
I P1 -P49.99
P25 P1.70 P0.40
2.10
II 50- 99.99
75 4.30 2.00
6.30
III 100-
149.99 125
6.40 4.10 10.50
IV 150-
199.99 175
9.00 5.70 14.70
V 200-
249.99 225
11.40 7.50 18.90
VI 250-
349.99 300
15.20 10.00 25.20
VII 350-
499.99 425
21.60 14.10 35.70
VIII 500-
699.99 600
30.40 20.00 50.40
IX 700-
899.99 800
40.50 26.70 67.20
X 900-
over 1000 50.70
33.30 84.00
"(b) 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. Paragraph (b) of Section 19 of Republic
Act No. 1161 is hereby amended to read as follows:cralaw:red
"Sec. 19. Employer's contributions. —chanroblesvirtualawlibrary
"(b) 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. Section 19 of Republic Act No. 1161 is
hereby amended by adding Section 19-A thereto to read as follows:cralaw:red
"Sec. 19-A. 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. chanroblesvirtualawlibrary
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." chanroblesvirtualawlibrary
Section 15. Paragraph (b) of Section 22 of Republic
Act No. 1161 is hereby amended to read as follows:cralaw:red
"Sec. 22. Remittance of contributions. —chanroblesvirtualawlibrary
"(b) 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. Section 22 of Republic Act No. 1161 is
hereby amended by adding Section 22-A thereto to read as follows:cralaw:red
"Sec. 22-A. 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 Section 22 of this Act and the manner of collection
of contributions specified in paragraphs (b), (c) and (d) of Section 22
of this Act are also applicable to the collection of penalties and
contributions of the covered self-employed."
Section 17. Paragraph (b) of Section 24 of Republic
Act No. 1161 is hereby amended and paragraph (c) is added thereto to
read as follows:cralaw:red
"Sec. 24. Employment Records and Reports. —chanroblesvirtualawlibrary
"(b) 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) 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. Section 24 of Republic Act No. 1161 is
hereby amended by adding Section 24-A thereto to read as follows: chanroblesvirtualawlibrary
"Sec. 24-A. 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. The first paragraph of Section 26 of
Republic Act No. 1161 is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 26. 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."
Section 20. Paragraph (e) of Section 28 of Republic
Act No. 1161 is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 28. Penal Clause. —chanroblesvirtualawlibrary
"(e) 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."
Section 21. 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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