SOCIAL SECURITY LAW

Prepared by: Atty. Edwin E. Torres (MSU Sept 2018)

1. Social security is provided by RA 1161 (1954), as amended by PD 24 (1972), and RA 8282 (1997).
Its avowed policy is to provide “meaningful protection” to workers and their beneficiaries against the hazards
of:
A. disability
B. sickness
C. maternity
D. old age
E. death; and
F. other contingencies resulting in loss of income or financial burden.

2. SOCIAL SECURITY VIS-A-VIS EMPLOYEES COMPENSATION: Claims under the Labor Code for
compensation and under the Social Security Law for benefits are not the same as to their nature and
purpose. The pertinent provisions of the Labor Code govern compensability of work-related disabilities or
when there is loss of income due to work-connected or work-aggravated injury or illness. The benefits
under the Social Security Law are intended to provide insurance or protection against the hazards or risks of
disability, sickness, old age or death, inter alia, irrespective of whether they arose from or in the course of
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employment.

3. SOCIAL SECURITY SYSTEM (SSS) VIS-À-VIS SOCIAL SECURITY COMMISSION (SSC): The
SSS is the body corporate. As such, it has the right to sue and be sued. The SSC is the 9-member
commission that directs and controls the SSS. It is composed of:

A. Secretary of Labor and Employment or his duly designated undersecretary;

B. SSS President;
C. Three (3) workers’ representatives;
D. Three (3) employers’ representatives;
E. One (1) representative from the general public.

The President of the Philippines appoints the appointive members who will have terms of three (3) years.
The President also designates the Chairman of the SSC.

4. ADMINISTRATION: The general conduct of the operations and management functions of the SSS
shall be vested in the SSS President who shall serve as the chief executive officer immediately responsible
for carrying out the program of the SSS and the policies of the Commission. The SSS President shall be a
person who has had previous experience in the technical and administrative fields related to the purposes of
this Act. He shall be appointed by the President of the Philippines. Before the RA 8282 amendment, he was
referred to as “SSS Administrator.”

5. SETTLEMENT OF DISPUTES: Disputes on social security coverage, benefits, contributions and

penalties are cognizable by the SSC. They will be heard by the SSC or any of its members, or by hearing
officers duly authorized by the SSC. Decisions of the SCC become final and executor after 15 days from
notification. But they are reviewable both upon the law and the facts by the Court of Appeals. If the SCC
decision involves only questions of law, the same shall be reviewed by the Supreme Court.

6. In exercising its power to settle any dispute with respect to SSS coverage, benefits and
contributions, the SSC cannot review or reverse decisions rendered by courts of law. Where a court
adjudged a spouse presumptively dead, the SSC cannot declare that the court decision had been obtained
through fraud because the spouse is actually alive. In interfering with and passing upon the CFI decision,
the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle
with orders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS. Under
the Civil Code, a subsequent marriage being voidable is terminated by final judgment of annulment in a case
instituted by the absent spouse who reappears or by either of the spouses in the subsequent marriage.
Under the Family Code, the subsequent marriage is automatically terminated by the recording of the affidavit
of reappearance of the absence spouse. The termination of the subsequent marriage by affidavit does not
preclude the filing of an action in court to prove the reappearance of the absentee and obtain a declaration of
dissolution or termination of the subsequent marriage. If the absentee reappears but no step is taken to
terminate the subsequent marriage, either by affidavit or by court action, such absentee’s mere
reappearance, even if made known to the spouses in the subsequent marriage, will not terminate such
marriage. Since the second marriage has been contracted because of a presumption that the former spouse
is dead, such presumption continues in spite of the spouse’s physical reappearance, and by fiction of law, he

1
Ortega vs. SSC and SSS (G.R. No. 176150, 25 June 2008).
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or she must still be regarded as legally an absentee until the subsequent marriage is terminated as provided
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by law.

7. An action for remittance of SS monthly contributions is not a type of money claim which needs to be
filed against the estate proceedings. Even after the distribution of the estate, claims for taxes may be
enforced against the distributees in proportion to their shares in the inheritance. Similarly, employers are
required to remit the contributions to the SSS by mandate of law. As such, actions of this type should be
treated in much the same way as taxes — that they are not required to be filed against the estate and that
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they be claimed against the heirs of the errant decedent.

8. The benefits that are granted by the Social Security Law are the following:

A. Retirement benefits;
B. Death benefits;
C. Permanent disability benefits;
D. Funeral benefits;
E. Sickness benefits; and
F. Maternity leave benefit.

9. PERSONS COVERED: (a) Employers and their employees are covered by the Social Security Law.
The right of an employee to be covered by the Social Security Act is premised on the existence of an
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employer-employee relationship. Foreign employers are also covered if they carry on their businesses in
the Philippines. Domestic workers or “kasambahay” are covered under Section 20 of RA 10361. Coverage
is compulsory upon all employees not over sixty years of age and their employers. Employments that are
not covered are the following:

(1) Employment purely casual and not for the purpose of occupation or business of the
employer;

(2) Service performed on or in connection with an alien vessel by an employee if he is

employed when such vessel is outside the Philippines;

(3) Service performed in the employ of the Philippine Government or instrumentality or

agency thereof;

(4) Service performed in the employ of a foreign government or international

organization, or their wholly-owned instrumentality: Provided, however, That this
exemption notwithstanding, any foreign government, international organization 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 those already
covered by their respective civil service retirement systems; and

(5) Such other services performed by temporary and other employees which may be
excluded by regulation of the Commission. Employees of bona fide independent
contractors shall not be deemed employees of the employer engaging the service of
said contractors.

(b) Self-employed professionals are now compulsorily covered. In such case, the self-employed are both
employees and employers at the same time. Specifically covered are the following:

1. All self-employed professionals;

2. Partners and single proprietors of businesses;
3. Actors and actresses, directors, scriptwriters 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 and jockeys; and
5. Individual farmers and fishermen.

10. Section 8(c) of the Social Security Law that defines “employer” is broad enough to include those
persons acting directly or indirectly in the interest of the employer. That the said provision does not contain
the definitive phrase contained in Article 212(e) of the Labor Code should not be taken to mean that a farm
administrator, whose interests are closely linked with his father-employer, do not come within the purview of
the law. If under Article 212(e), persons acting in the interest of the employer, directly or indirectly, are

2
SSS vs. De Bailon (G.R. No. 165545, 24 March 2006).
3
SSC and Lamboso vs. Alba (G.R. No. 165482, 23 July 2008).
4
Social Security Commission vs. Rizal Poultry and Livestock Association, Inc. (G.R. No. 167050, 1 June 2011).
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obliged to follow the government labor relations policy, it could be reasonably concluded that such persons
may likewise be held liable for the remittance of SS contributions which is an obligation created by law and is
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the employee’s right protected by law.

11. There is no essential conceptual difference between the definition of “employee” under the Labor
Code and the Social Security Act. Therefore, where in a labor case the NLRC rendered judgment that there
is no employer-employee relationship between the parties, said judgment is conclusive on the SSS case. In
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this case, there is res judicata in the concept of “conclusiveness of judgment.”

12. DEPENDENTS: Dependents are entitled to dependent’s pension and death benefit. The
dependents are the following:

(1) The legal spouse entitled by law to receive support from the member;

(2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried,
not gainfully employed, and has not reached twenty-one (21) years of age, or if over
twenty-one (21) years of age, he is congenitally or while still a minor has been
permanently incapacitated and incapable of self-support, physically or mentally; and

(3) The parent who is receiving regular support from the member.

For a minor child to qualify as a "dependent," the only requirements are that he/she must be below 21 years
of age, not married nor gainfully employed. The provision of Section 8(e) vested the right of death benefit to
a member’s illegitimate minor children irrespective of any proof that they had been dependent on the support
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of the deceased.

13. An SSS member submitted Form E-4 to the SSS with Edna and their three children as his
designated beneficiaries. However, it appeared that he submitted 10 years ago another Form E-4
designating another woman and their children as his beneficiaries. Can Edna claim dependent’s benefits
from the SSS as wife of said member? Answer: No. Section 8(e) and (k) of RA 8282 provides that it is legal
spouse who is entitled to benefits as dependent of the SSS member. A marriage contracted by any person
during subsistence of a previous marriage shall be null and void, unless before the celebration of the
subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present
has a well-founded belief that the absent spouse was already dead. In case of disappearance where there is
danger under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of
only two years shall be sufficient. For the purpose of contracting a subsequent marriage under the preceding
paragraph, the spouse present must institute a summary proceeding as provided in this Code for the
declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the
absent spouse. Using the parameters outlined in Article 41 of the Family Code, Edna, without doubt, failed
to establish that there was no impediment or that the impediment was already removed at the time of the
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celebration of her marriage to the SSS member.

14. BENEFICIARIES: Beneficiaries are either primary or secondary. The primary beneficiaries are the
following:

A. Dependent spouse until he or she remarries.

B. Dependent legitimate, legitimated or legally adopted, and illegitimate children.

The dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate,
legitimated or legally adopted children. In the absence of the dependent legitimate, legitimated children of
the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the
benefits. In the absence of primary beneficiaries, the secondary beneficiaries take over to receive the
benefits. The secondary beneficiaries are:

A. Dependent parents who shall be the secondary beneficiaries of the member.

B. In the absence of all the foregoing, any other person designated by the member as
his/her secondary beneficiary.

15. A wife who is already separated de facto from her husband cannot be said to be ‘dependent for
support’ upon the husband, absent any showing to the contrary. Such wife has the burden to prove that she
is dependent on her husband for support. Conversely, if it is proved that the husband and wife were still

5
SSC and Lamboso vs. Alba (G.R. No. 165482, 23 July 2008).
6
SSC vs. Rizal Poultry and Livestock Association, Inc., et al. (G.R. No. 167050, 1 June 2011).
7
Signey vs. SSS, et al. (G.R. No. 173582, 28 January 2008).
8
SSC vs. Azote (G.R. No. 209741, 15 April 2015).
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living together at the time of his death, it would be safe to presume that she was dependent on the husband
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for support, unless it is shown that she is capable of providing for herself.

THE BENEFITS

16. QUALIFICATION FOR MONTHLY PENSION: To be qualified for monthly pension, a member must
have:

A. Paid at least 120 monthly contributions prior to semester of retirement; and

B. Reached age 60 and is already separated from employment or has ceased to be self-
employed; or
C. Reached age 65.

If a member has reached age 60 at retirement but who does not qualify for monthly pension, he is entitled to
a lump sum benefit equal to the contributions paid by him and on his behalf. He may also opt to continue the
payments of the contributions.

17. DEATH BENEFITS: Upon death of the retired member, his primary beneficiaries as of the date of
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his retirement shall be entitled to receive the monthly pension. If he has no primary beneficiaries and he
dies within 60 months (5 years) from the start of his monthly pension, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the
five-year guaranteed period, excluding the dependents' pension.

18. Bonifacio became an SSS member in 1980. In his data record, he named common-law wife Elena
his and their eight children as his beneficiaries. Bonifacio was considered retired in 1989 and passed away
in 1997. A few months prior to his death in 1997, Bonifacio married Elena. Subsequently, Elena filed with
the SSS an application for survivor’s pension. The SSC denied her application because she was not a
primary beneficiary “as of the date of his (i.e., of Bonifacio’s) retirement” in accordance with Section 12-d of
RA 8282. RULING: Section 12-d of RA 8282 violates the equal protection and due process clauses. As to
the equal protection clause, a classification must satisfy the following elements to be valid: (1) it must rest on
substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing
conditions only; and (4) it must apply equally to all members of the same class. Section 12-d establishes two
groups of dependent spouses as primary beneficiaries:

(1) Those dependent spouses whose respective marriages to SSS members were
contracted prior to the latter’s retirement; and

(2) Those dependent spouses whose respective marriages to SSS members were
contracted after the latter’s retirement.

The proviso was apparently intended to prevent sham marriages or those contracted by persons solely to
enable one spouse to claim benefits upon the anticipated death of the other spouse. However, classifying
dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage
was contracted before or after the retirement of the other spouse, regardless of the duration of the said
marriage, bears no relation to the achievement of the policy objective of the law, i.e., "provide meaningful
protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age,
death and other contingencies resulting in loss of income or financial burden." The nexus of the
classification to the policy objective is vague and flimsy. Put differently, such classification of dependent
spouses is not germane to the aforesaid policy objective. For if it were the intention of Congress to prevent
sham marriages or those entered in contemplation of imminent death, then it should have prescribed a
definite "duration-of-relationship" or durational period of relationship as one of the requirements for
entitlement to survivor’s pension. The proviso "as of the date of his retirement" in Section 12-B(d) in RA
8282 effectively disqualifies from entitlement to survivor’s pension all those dependent spouses whose
respective marriages to retired SSS members were contracted after the latter’s retirement. The duration of
the marriage is not even considered.

The proviso also runs afoul of the due process clause as it outrightly deprives the surviving spouses whose
respective marriages to the retired SSS members were contracted after the latter’s retirement of their
survivor’s benefits. There is outright confiscation of benefits due such surviving spouses without giving them
an opportunity to be heard. It has created the presumption that marriages contracted after the retirement
date of SSS members were entered into for the purpose of securing the benefits under RA 8282. This
presumption, moreover, is conclusive because the said surviving spouses are not afforded any opportunity to

9
SSS vs. Aguas, et al. (G.R. No. 165546, 27 February 2006).
10
This phrase is declared unconstitutional in the case of Dycaico that is quoted below.
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disprove the presence of the illicit purpose. The proviso, as it creates this conclusive presumption, is
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unconstitutional because it presumes a fact which is not necessarily or universally true.

19. PERMANENT DISABILITY BENEFITS: Upon the permanent total disability of a member who has
paid at least thirty-six (36) monthly (i.e., 3 years) contributions prior to the semester of disability, he shall be
entitled to the monthly pension: Provided, That if he has not paid the required thirty-six (36) monthly
contributions, he 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. A
member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment
not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and
shall be considered a new member.

20. Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of
disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries
and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall
be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of
the five-year guaranteed period excluding the dependents' pension.

21. Permanent disabilities are either total or partial. 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 and approved by the SSS.

Partial disability is the loss of the use of an anatomical part of the body.

22. While ‘permanent total disability’ invariably results in an employee’s loss of work or inability to
perform his usual work, ‘permanent partial disability,’ on the other hand, occurs when an employee loses the
use of any particular anatomical part of his body which disables him to continue with his former work. Stated
otherwise, the test of whether or not an employee suffers from ‘permanent total disability’ is a showing of the
capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if
by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for
more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on
Employees Compensability (which, in a more detailed manner, describes what constitutes temporary total
disability), then said employee undoubtedly suffers from ‘permanent total disability’ regardless of whether or
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not he loses the use of any part of his body.

23. Disability should be understood less on its medical significance than on the loss of earning capacity.
Permanent total disability means disablement of an employee to earn wages in the same kind of work, or
work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person
of his mentality and attainment could do. It does not mean absolute helplessness. Moreover, a person’s
disability may not manifest fully at one precise moment in time but rather over a period of time. It is possible
that an injury which at first was considered to be temporary may later on become permanent or one who
suffers a partial disability becomes totally and permanently disabled from the same cause. Hence, the
petition of a covered employee for the adjustment of his partial disability to total disability due to the
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degenerative condition of his injury that prevents him from work is in order.

24. FUNERAL BENEFIT: A funeral grant equivalent to Twelve thousand pesos (P12,000.00) 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.

25. SICKNESS BENEFIT: 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 x x x. In no case shall the daily sickness benefit be
paid longer than one hundred twenty (120) days in one (1) calendar year x x x.

26. 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

11
Dycaico vs. SSS and SSC (G.R. No. 161357, 30 November 2005).
12
Vicente vs. Employees Compensation Commission (G.R. No. 85024, 23 January 1991).
13
SSC and SSS vs. CA,. et al. (G.R. No. 152058, 27 September 2004).
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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 x x x.

PENALTY

27. The elements of criminal liability under Section 22 of the SSS law are: (a) the employer fails to
register its employees with the SSS; (b) the employer fails to deduct monthly contributions from the salaries
and/or wages of its employees; and (c) having deducted the SSS contributions and/or loan payments to
SSS, the employer fails to remit these to the SSS.

28. Failure to remit collected SS premium is penalized under the Revised Penal Code. Since Sec. 28 (h)
of the Social Security Act (a special law) adopted the penalty from the Revised Penal Code, the
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Indeterminate Sentence Law also finds application.

29. Lack of criminal intent and good faith – as one’s failure to remit was brought about by alleged
economic difficulties, and he has already agreed to settle his obligations with the SSS through a
memorandum of agreement to pay in installments- is unavailing as defense for one’s failure to remit SSS
contributions and loan payments in violation of Section 28 (e), (f) and (h) of the SSS Law. The violations
charged pertain to the SSS Law, which is a special law. As such, it belongs to a class of offenses known as
mala prohibita. The law has long divided crimes into acts wrong in themselves called acts mala in se; and
acts which would not be wrong but for the fact that positive law forbids them, called acts mala prohibita. This
distinction is important with reference to the intent with which a wrongful act is done. The rule on the subject
is that in acts mala in se, the intent governs; but in acts mala prohibita, the only inquiry is, has the law been
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violated? When an act is illegal, the intent of the offender is immaterial.

30. "(f) If the act or omission penalized by this Act be committed by an association, partnership,
corporation or any other institution, its managing head, directors or partners shall be liable for the penalties
Provided in this Act for the offense.” This provision does not qualify that the director or partner should
likewise be a "managing director" or "managing partner." A mere partner may be penalized under the above
provision. Likewise, penalty under the above provision is separate and distinct from the 3& penalty for non-
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remittance of contribution from the date it falls due until paid pursuant to Section 22(a).

31. The word “proprietor” connotes management, control and power over a business entity. Hence, it is
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covered by the word “managing head” mentioned in Section 28(f).

32. Section 22(b), par. 2 of the SSS Law provides for a prescriptive period of 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, within which administrative and civil actions may be commenced against the
employer who failed to remit contributions. Criminal actions for violations of the SSS law, on the other hand,
prescribe in FOUR YEARS, as provided in Act No. 3326 (Act to Establish Periods of Prescription for
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Violations Penalized by Special Acts and Municipal Ordinances).

14
Mendoza vs. People (G.R. No. 183891, 3 August 2010).
15
Tan, et al. vs. Ballena, et al. (G.R. No. 168111, 4 July 2008).
16
Garcia vs. SSC Legal and Collection, SSS (G.R. No. 170735, 17 December 2007).
17
Mendoza vs. People (G.R. No. 183891, 3 August 2010).
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