Republic Act No. 1161 June 18, 1954
Members of the Commission who hear cases
AN ACT TO CREATE A SOCIAL SECURITY SYSTEM
PROVIDING SICKNESS, UNEMPLOYMENT, RETIREMENT,
DISABILITY AND DEATH BENEFITS FOR EMPLOYEES
SECTION 1. Short Title. This Act shall be known as the
"Social Security Law" (As amended by Sec. 1, P.D. No. 24, S-
1972)."
Section 2. Declaration of Policy. It is the 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
which shall provide to covered employees and their families
protection against the hazards of disability, sickness, old age
and death, with a view to promoting their well-being in the spirit
of social justice. (As amended by Sec. 1, R.A. 1792 and Sec. 2,
P.D. No. 24, S-1972)
A. Administration
SECTION 3. Social Security System. (a) To carry out the
purposes of this Act, the Social Security System with principal
place of business in Metro Manila, Philippines is hereby created.
The SSS shall be directed and controlled by a Social Security
Commission composed of the Secretary of Labor and
Employment, the SSS Administrator and seven appointive
members: three of whom shall represent the labor group, one of
whom shall be a woman; three, the management group, one of
whom shall be a woman; and, one, the general public, to be
appointed by the President of the Philippines. The Chairman of
the Commission shall be designated by the President from
among its members. The term of the appointive members shall
be three years: Provided, That the terms of the first six
appointive members shall be one, two and three years for every
two members, respectively.
All vacancies, except through the expiration of the term, shall be
filled for the unexpired term only. The apppointive members of
the Commission shall receive one thousand five hundred pesos
per diem for each meeting actually attended by them: Provided,
That no compensation shall be paid for more than eight
meetings a month.
pending before the Commission, shall also receive a per diem of
one thousand five hundred pesos. (As amended by Sec. 2, R.A.
1792, Sec. 1, R.A. 2658, Sec. 1, R.A. 4857; Sec. 3, P.D. No. 24,
S-1972; Sec. 1, P.D. No. 347, S-1973; Sec. 1, P.D. 735, S-
1975; Sec. 1, P.D. No. 1202, S-1977; Sec. 1, E.O. No. 102, S-
1986; and R.A. 7688)
(b) The general conduct of the operations and management
functions of the SSS shall be vested in the Administrator 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 administrator shall be a person who has had
previous experience in technical and administrative fields related
to the purposes of this Act. He shall be appointed by the
President of the Philippines and shall receive a salary to be fixed
by the Commission with the approval of the President, payable
from the funds of the SSS. (As amended by Sec. 1, R.A. 2658;
Sec. 3, P.D. No. 24, S-1972; and Sec. 1, P.D. No. 735, S- 1975)
(c) The Commission, upon the recommendation of the
Administrator shall appoint an actuary, and such other personnel
as may be deemed necessary; fix their compensation; prescribe
their duties and establish such methods and procedures as may
insure the efficient, honest and economical administration of the
provisions and purposes of this Act. Provided, however, That the
personnel of the SSS shall be selected only from civil service
eligibles certified by the commissioner of civil service and be
subject to civil service rules and regulations. (As amended by
Sec. 1, R.A. 2658 and Sec. 1, P.D. No. 735, S-1975)
Section 4. Powers and Duties of the Commission. For the
attainment of its main objectives as set forth in section two
hereof, the Commission shall have the following powers and
duties:
(a) To adopt, amend and rescind, subject to the approval of
the President, such rules and regulations as may be
necessary to carry out the provisions and purposes of this
Act.
(b) To submit annually not later than March 31, a public
report to the President of the Philippines covering its
activities in the administration and enforcement of this Act
during the preceding year including information and
recommendations on broad policies for the development and
perfection of the program of the SSS. (As amended by Sec.
2, P.D. No. 735, S-1975)
(c) To require the Actuary to submit a valuation report on
the SSS benefit program every five years, or more
frequently as may be necessary, and to undertake 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: President, That the actuarial soundness of the
reserve fund shall be guaranteed: Provided, further, That
such increases in benefits shall not require any increase in
the rate of contribution. (As amended by Sec. 1, P.D. No.
1636, S-1979 and Sec. 2, E.O. No. 102, S-1986)
(d) To establish branches of the System whenever and
wherever it may be expedient or necessary, and to inspect or
cause to be inspected periodically such branches.
(e) To enter into agreements or contracts for such service
and aid, as may be needed for the proper, efficient and
stable administration of the System.
(f) To adopt from time to time a budget of expenditures
including salaries of personnel, against all funds available to
the System under this Act. (As amended by Sec. 3, R.A.
1792)
(g) To set up its accounting system and provide the
necessary personnel therefor. (As amended by Sec. 3, R.A.
1792)
(h) To require reports, compilations and analyses of
statistical and economic data and to make investigations as
may be needed for the proper administration and
development of the System.
(i) To acquire property, real or personal, which may be
necessary or expedient for the attainment of the purposes of
this Act.
(j) To acquire, receive, or hold, by way of purchase,
expropriation or otherwise, public or private property for the
purpose of undertaking housing projects preferably for the
benefit of low-salaried employees and for the maintenance of
hospitals and institutions for the sick, aged and infirm
employees and immediate members of their families. (As
amended by Sec. 2, R.A. 2658 and Sec. 2., P.D. No. 735, S-
1975)
(k) To sue and be sued in court.
(l) To perform such other acts as it may deem appropriate
for the proper enforcement of this Act.
Section 5. Settlement of Disputes. (a) Any dispute arising
under this Act with respect to coverage, benefits, contributions
and penalties thereon or any other matter related thereto, shall
be cognizable by the Commission, and any case filed with
respect thereto shall be heard by the Commission, or any of its
members, or by hearing officers duly authorized by the
Commission and decided within twenty days after the
submission of the evidence. The filing, determination and
settlement of disputes shall be governed by the rules and
regulations promulgated by the Commission. (As amended by
Sec. 3, R.A. 2658; Sec. 2, R.A. 4857; and Sec. 3, P.D. No. 735,
S-1975)
(b) Appeal to Courts. Any decision of the Commission, in the
absence of an appeal therefrom as herein provided, shall
become final fifteen days after the date of notification, and
judicial review thereof shall be permitted only after any party
claiming to be aggrieved thereby has exhausted his remedies
before the Commission. The Commission shall be deemed to be
a party to any judicial action involving any such decision, and
may be represented by an attorney employed by the
Commission, or when requested by the Commission, by the
Solicitor General or any fiscal.
(c) Court Review. The decision of the Commission upon any
disputed matter may be received both upon the law and the
facts by the Court of Appeals. For the purpose of such review
the procedure concerning appeals from the Court of First
Instance shall be followed as far as practicable and consistent
with the purposes of this Act. Appeal from a decision of the
Commission must be taken within fifteen days from notification
of such decision. If the decision of the Commission involves only
questions of law, the same shall be reviewed by the Supreme
Court. No appeal bond shall be required. The case shall be heard
in a summary manner, and shall take precedence over all cases,
except that in the Supreme Court, criminal cases wherein life
imprisonment or death has been imposed by the trial court shall
take precedence. No appeal shall act as a supersedeas or a stay
of the order of the Commission, unless the Commission itself, or
the Court of Appeals or the Supreme Court, shall so order.
(d) Execution of decisions Any decision or award of the
Commission after the same has become final and executory shall
be enforced and executed in the same manner as decisions of
Courts of First Instance and the Commission shall have the
power to issue to the City or provincial sheriff or the sheriff
whom it may appoint such writs of execution as may be
necessary for the enforcement of such decision or award and
any person who shall fail or refuse to comply with such decision,
award, or writ, after being required to do so shall, upon
application by the Commission, be punished by the proper court
for contempt. (As amended by Sec. 4, P.D. No. 24, S-1972)
Section 6. Auditor and Counsel. (a) The Commissioner on
Auditor shall be the ex-officio Auditor of the SSS. He or his
representative shall check and audit all the accounts, funds and
properties of the SSS in the same manner and as frequently as
the accounts, funds and properties of the government are
checked and audited under existing laws; and he shall have, as
far as practicable, the same powers and duties as he has with
respect to the checking and auditing of public accounts, funds
and properties in general.
(b) The Secretary of Justice shall be the ex-officio counsel of the
SSS. He or his representative shall act as legal adviser and
counsel thereof. (As amended by Sec. 4, P.D. No. 735, S-1975)
Section 7. Oaths, Witnesses, and Production of
Records. When authorized by the Commission, an official or
employee thereof shall have the power to administer oath and
affirmation, take depositions, certify to official acts, and issue
subpoena and subpoena duces tecum to compel the attendance
of witnesses and the production of books, papers,
correspondence and other records deemed necessary as
evidence in connection with any question arising under this Act.
Any case of contumacy shall be dealt with in accordance with
the provisions of section five hundred eighty of the
Administrative Code.
B. Definitions
SECTION 8. Terms Defined. For the purposes of this Act,
the following terms shall, unless the context indicates otherwise,
have the following meanings:
(a) SSS The Social Security System created by this
Act. (As amended by Sec. 2, P.D. No. 1636, S-1979)
(b) Commission The Social Security Commission as
herein created.
(c) Employer Any person, natural or juridical, domestic
or foreign, who carries on in the Philippines any trade,
business, industry, undertaking, or activity of 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 subdivisions,
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. (As amended by Sec. 2, P.D.
No. 1636, S-1979)
(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.
(As amended by Sec. 4, R.A. 2658 and Sec. 2, P.D. No.
1636, S-1979)
(e) Dependent The legitimate, legitimated or legally
adopted child who is unmarried, not gainfully employed,
and not over twenty-one years of age, or over twenty-
one years of age, provided that he is congenitally
incapacitated and incapable of self-support, physically or
mentally; the legitimate spouse dependent for support
upon the employee; and the legitimate parents wholly
dependent upon the covered employee for regular
support. (As amended by Sec. 4, R.A. 2658; Sec. 3, R.A.
4857; and Sec. 5, P.D. No. 735, S-1975)
(f) Compensation All actual remuneration for
employment, including the mandated cost of living
allowance, as well as the cash value of any remuneration
paid in any medium other than cash except that part of
the remuneration in excess of three thousand pesos
received during the month. (As amended by Sec. 4, R.A.
1792; Sec. 4 R.A. 2658; Sec. 5, P.D. No. 24, S-1972;
and Sec. 3, E.O. No. 102, S-1986)
(g) Monthly salary credit The compensation base for
contributions and benefits as indicated in the schedule in
section eighteen of this Act. (As amended by Sec. 4, R.A.
2658 and Sec. 5 P.D. No. 24, S-1972)
(h) Monthly The period from one end of the last payroll
period of the preceding month to the end of the last
payroll period of the current month if compensation is on
hourly, daily or weekly basis; if on any other basis,
"monthly" shall mean a period of one month.
(i) Contribution The amount paid to the SSS by the
employee and by his employer in accordance with section
eighteen of this Act. (As amended by Sec. 5, P.D. No. 24,
S-1972)
(j) Employment. Any service performed by an
employee for his employer, except
1. Agricultural labor when performed by a share or
leasehold tenant or worker who is not paid any
regular daily wage or base pay and who does not
work for an uninterrupted period of at least six
months in a year; (As amended by Sec. 4, R.A.
2658)
2. Domestic service in a private home;
3. Employment purely casual and not for the
purposes of occupation or business of the
employer;
4. Service performed by an individual in the
employ of his son, daughter, or spouse, and
service performed by a child under the age of
twenty-one years in the employ of his parents;
5. Service performed on or in connection with an
alien vessel by an employee if he is employed
when such vessel is outside the Philippines;
6. Service performed in the employ of the
Philippine Government or an instrumentality or
agency thereof;
7. Service performed in the employ of a foreign
government or international organization, or their
wholly-owned instrumentality: Provided, however,
That his 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: Provided, further, That the terms of such
agreement shall conform with the provisions of
this Act on coverage and amount of payment of
contributions and benefits: Provided, finally, That
the provisions of this Act shall be supplementary
to any such agreement. (As amended by Sec. 1,
 R.A. 3839; Sec. 3, RA 4857; and Sec. 5, P.D. No.
735, S-1975)
8. Such other services performed by temporary
employees who may be excluded by regulation of
the Commission. Employees of bona fide
independent contractors shall not be deemed
employees of the employer engaging the services
of said contractors. (As amended by Sec. 5, P.D.
No. 735, S-1975)
(k) Beneficiaries The dependent spouse until he
remarries and dependent children, who shall be the
primary beneficiaries. In their absence, the dependent
parents and, subject to the restrictions imposed on
dependent children, the legitimate descendents and
illegitimate children who shall be the secondary
beneficiaries. In the absence of any of the foregoing, any
other person designated by the covered employee as
secondary beneficiary. (As amended by Sec. 4, R.A.
2658; Sec. 3, R.A. 4857; Sec. 1, P.D. No. 177, S-1973;
and Sec. 5, P.D. No. 735, S-1975)
(l) Contingency The retirement, death, permanent
disability, injury or sickness of the covered employee. (As
amended by Sec. 5, P.D. No. 735, S-1975)
(m) Average monthly salary credit The result obtained
by dividing the sum of the monthly salary credits in the
sixty-month period immediately preceding the semester
of contingency by the number of months of coverage in
the same period, or the result obtained by dividing the
sum of all the monthly salary credits paid prior to the
semester of contingency by the number of calendar
months of coverage in the same period, whichever is
greater: except where the month of contingency falls
within eighteen months from the month of coverage, in
which case it is the result obtained by dividing the sum of
all monthly salary credits paid prior to the month of
contingency by the total number of calendar months of
coverage in the same period: Provided, That the injury or
sickness which caused the disability shall be deemed as
the permanent disability for the purpose of computing
the average monthly salary credit. (As amended by Sec.
3, R.A. 4857 and Sec. 5, P.D. No. 735, S-1975)
(n) Average daily salary credit The result obtained by
dividing the sum of the six highest monthly salary credits
in the twelve-month period immediately preceding the
semester of contingency by one hundred eighty. (As
amended by Sec. 3, R.A. 4857; Sec. 5, P.D. No. 735, S-
1975; and Sec. 3, E.O. No. 102, S-1986)
(o) Semester A period of two consecutive quarters
ending in the quarter of contingency. (As amended by
Sec. 5, P.D. No. 735, S-1975)
(p) Quarter A period of three consecutive calendar
months ending on the last day of March, June,
September and December. (As amended by Sec. 3, R.A.
4857)
(q) Replacement ratio The sum of twenty per cent and
the quotient obtained by dividing three hundred by the
sum of three hundred forty and the average monthly
salary credit. (As amended by Sec. 2, P.D. No. 1636, S-
1979)
(r) Credited years of service For a member covered
prior to January 1975, nineteen hundred seventy five
minus the calendar year of coverage plus the number of
calendar years in which six or more contributions have
been paid from January 1975 up to the calendar year
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.
(As amended by Sec. 2, P.D. No. 1636, S-1979)
 C. Scope of the System
SECTION 9. Compulsory coverage. (a) Coverage in the
SSS shall be compulsory upon all employees not over sixty
years of age and their employers: Provided, That any benefit
already earned by employees under private benefit plans
existing at the time of the approval of this Act shall not be
discontinued, reduced or otherwise impaired: Provided, further,
That private plans which are existing and in force at the time of
compulsory coverage shall be integrated with the plan of the
SSS in such a way where the employer's contribution to his
private plan is more that that required of him in this Act he shall
pay to the SSS only the contribution required of him and he
shall continue his contribution to such private plan less his
contribution to the SSS so that the employer's total contribution
to his private benefit plan and to the Social Security System
shall be the same as his contribution to his private benefit plan
before the compulsory coverage: Provided, further, That any
changes, adjustments, modifications, eliminations or
improvements in the benefits to be available under the
remaining private plan, which may be necessary to adopt by
reason of the reduced contribution thereto as a result of the
integration, shall be subject to agreements between the
employers and employees concerned: Provided, further, That
the private benefit plan which the employer shall continue for his
employees shall remain under the employer's management and
control unless there is an existing agreement to the contrary:
Provided, finally, That nothing in this Act shall be construed as a
limitation on the right of employers and employees to agree on
and adopt benefits which are over and above those provided
under this Act. (As amended by Sec. 5, R.A. 1972; Sec. 5, R.A.
2658; and Sec. 2, R.A. 3839)
(b) Filipinos recruited in the Philippines by foreign-based
employers for employment abroad may be covered by the SSS
on a voluntary basis. (As amended by Sec. 2, P.D. No. 177, S-
1973 and Sec. 6, P.D. No. 735, S-1975)
Section 9-A. Compulsory Coverage of the Self-
employed. Coverage in the SSS shall also be compulsory
upon all self-employed persons earning P1,800 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 ten (b)
hereof:
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, scriptwriters and news
correspondents who do not fall within the definition of the
term "employee" in section eight (d) of this Act.
4. Professionals 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 SSS Law
applicable to covered employees shall also be applicable to the
covered self-employed persons. (As amended by Sec. 3, P.D.
No. 1636, S-1979)
Section 10. Effective Date of Coverage. Compulsory
coverage of the employer shall take effect on the first day of his
operation and that of the employee on the day of his
employment: Provided, That the compulsory coverage of self-
employed persons referred to in paragraphs (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. (As
amended by Sec. 6, R.A. 1972; Sec. 6, R.A. 2658; and Sec. 4,
P.D. No. 1636, S-1979)
Section 11. Effect of Separation from Employment.
When an employee under compulsory coverage is separated
from employment, his employer's contribution on his account
and his obligation to pay contributions arising from that
employment shall cease at the end of the month of separation,
but said employee shall be credited with all contributions paid on
his behalf and entitled to benefits according to the provisions of
this Act. He may, however, continue to pay the total
contributions to maintain his right to full benefit. (As amended
by Sec. 4, R.A. 4857 and Sec. 7, P.D. No. 735, S-1975)
Section 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. (As amended by Sec. 5, P.D. No. 1636, S-
1979)
D. Benefits
SECTION 12. 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 per cent 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 two
hundred 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 as of December 31, 1986 shall be increased by
twenty per cent. (As amended by Sec. 7, R.A. 1792; Sec. 7,
R.A. 2658; Sec. 5, R.A. 4857; Sec. 6, P.D. No. 24, S-1972; Sec.
3, P.D. No. 177, S-1973; Sec. 8, P.D. No. 735, S-1975; Sec. 2,
P.D. No. 1202, S-1977; Sec. 6, P.D. No. 1636, S-1979; Sec. 1,
E.O. No. 28, S-1986; and Sec. 4, E.O. No. 102, S-1986)
Section 12-A. Dependents' Pension. The dependents'
pension shall be equivalent to ten per cent of the monthly
pension for each dependent child but not exceeding five,
beginning with the youngest and without substitution. (As
amended by Sec. 3, P.D. No. 1202, S-1977)
Section 12-B. Retirement Benefits. (a) A covered
employee who has 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. (As amended by Sec. 4, P.D. No. 1202, S-1977)
(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.
(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. (As
amended by Sec. 7, R.A. 1792; Sec. 7, R.A. 2658; Sec. 6, P.D.
No. 24, S-1972; Sec. 3, P.D. No. 177, S-1973; Sec. 8, P.D. No.
735; S-1975; Sec. 4, P.D. No. 1202, S-1977; and Sec. 7, P.D.
No. 1636, S-1979)
(d) Upon the death of the retired employee pensioner, his
primary beneficiaries as of the date of his retirement shall be
entitled to eighty per cent 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 bigger
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. (As
amended by Sec. 7, P.D. No. 1636, S-1979 and E.O. No. 102, S-
1986)
Section 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 condition 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 sum benefit equivalent to twenty
times the monthly pension: Provided, however, That the
minimum death 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, 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. (As amended by Sec. 5, P.D. No. 1202, S-
1977 and Sec. 8, P.D. No. 1636, S-1979)
Section 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 date of his disability
shall again be subject to compulsory coverage and considered a
new member. (As amended by Sec. 6, P.D. No. 1202, S-1977)
(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
dependents' 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. (As
amended by Sec. 6, P.D. No. 1202, S-1977 and Sec. 9, P.D. No.
1636, S-1979)
(c) Upon the death of the permanent total disability pensioner,
his primary beneficiaries as of the date of disability shall be
entitled to eighty per cent 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 bigger
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. (As
amended by Sec. 9, P.D. No. 1636, S-1979 and Sec. 6, E.O. No.
102, S-1986)
(d) 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.
One leg 46

(As amended by Sec. 9, P.D. No. 1636, S-1979) One ear 10

(e) If the disability is permanent partial, and such disability Both ears 20
occurs before thirty-six monthly contributions have been paid
prior to the semester of disability, the benefit shall be such Hearing of one ear 10
percentage of the lump sum benefit described in the preceding
Hearing of both ears 20
paragraph with due regard to the degree of disability as the
Commission may determine. (As amended by Sec. 9, P.D. No.
Sight of one eye 25
1636, S-1979)

(f) If the disability is permanent partial and such disability (As amended by Sec. 10, P.D. No. 735, S-1975 and Sec. 9, P.D.
occurs after thirty-six monthly contributions have been paid No. 1636, S-1979)
prior to the semester of disability, the benefit shall be the
monthly pension for permanent total disability payable not (g) The percentage degree of disability, which is equivalent to
longer than the period designated in the following schedule: the ratio 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
Complete and Number of
permanent partial disabilities, but shall be additive for
permanent loss of use Months
deteriorating and related permanent partial disabilities, to a
of
maximum of one hundred per cent, in which case the employee
shall be deemed as permanently totally disabled. (As amended
One thumb 10
by Sec. 9, P.D. No. 1636, S-1979)
One index finger 8
Section 13-B. Funeral Benefit. A funeral grant of two
One middle finger 6 thousand pesos shall be paid to help defray the cost of funeral
expenses upon the death of a covered member, permanently
One right finger 5 totally disabled employee or retiree. (As amended by Sec. 11,
P.D. No. 735, S-1975; Sec. 2, E.O. No. 28, S-1986; and Sec. 7,
One little finger 3 E.O. No. 102, S-1986)
One big toe 6
Section 14. Sickness Benefit. (a) A covered employee who
One hand 39 has paid at least three monthly contributions in the twelve-
month period immediately preceding the semester of sickness
One arm 50 and is confined for more than three days in a hospital or
elsewhere with the Commission's approval, shall, for each day of
One foot 31 compensable confinement or fraction thereof, be paid by his
employer, or the SSS, if such person is unemployed, an
allowance equivalent to ninety per cent of his average daily
salary credit, subject to the following conditions: (As amended payment by the SSS, for as long as such allowances are due and
by Sec. 3, E.O. No. 28, S-1986) payable: Provided, That such allowance shall begin only after all
sick leaves of absence with full pay to the credit of the employee
(1) In no case shall the total amount of such daily shall have been exhausted. (As amended by Sec. 9, R.A. 2658;
allowance be less than seven pesos and fifty centavos nor Sec. 7, R.A. 4857; Sec. 8, P.D. No. 24, S-1972; Sec. 5, P.D. No.
exceed seventy-five pesos nor paid longer than one 177, S-1973; and Sec. 14, P.D. No. 735, S-1975)
hundred twenty days in one calendar year; nor shall any
unused portion of the one hundred twenty days of (c) One hundred per cent of the daily benefits provided in the
sickness benefit granted under this section be carried preceding paragraph shall be reimbursed by the SSS to said
forward and added to the total number of compensable employer upon receipt of satisfactory proof of such payment and
days allowable in the subsequent year; (As amended by legality thereof: Provided, That the employer has notified the
Sec. 3, E.O. No. 28, S-1986 and Sec. 8, E.O. No. 102, S- SSS of the confinement within five calendar days after receipt of
1986) the notification from the employee: Provided, further, That if the
notification to the SSS is made by the employer beyond five
(2) No employee shall be paid any sickness benefit for calendar days after receipt of the notification from the
more than two hundred forty days on account of the employee, said employer shall be reimbursed only for each day
same confinement; and of confinement starting from the tenth calendar day immediately
preceding the date of notification to the SSS: Provided, finally,
(3) The employee shall notify his employer of the fact of That the SSS shall reimburse the employer or pay the
his sickness or injury within five calendar days after the unemployed member only for confinement within the one year
start of his confinement unless such confinement is in a period immediately preceding the date the claim for benefit or
hospital or the employee became sick or was injured reimbursement is received by the SSS, except confinement in a
while working or within the premises of the employer in hospital in which case the claim for benefit or reimbursement
which case notification to the employer is not necessary: must be filed within one year from the last day of confinement.
Provided, That if the member is unemployed he shall (As amended by Sec. 9, R.A. 2658; Sec. 1, R.A. 4482; Sec. 7,
directly notify the SSS of his confinement within five R.A. 4857; and Sec. 8, P.D. No. 24, S-1972)
calendar days after the start thereof unless such
confinement is in a hospital in which case notification is (d) Where the employee has given the required notification but
also not necessary: Provided, further, That in cases the employer fails to notify the SSS of the confinement or to file
where notification is necessary, the confinement shall be the claim for reimbursement within the period prescribed in this
deemed to have started not earlier than the fifth day section resulting in the reduction of the benefit or denial of the
immediately preceding the date of notification. (As claim such employer shall have no right to recover the
amended by Sec. 9, R.A. 2658; Sec. 7, R.A. 4857; Sec. corresponding daily allowance he advanced to the employee as
8, P.D. No. 24, S-1972; Sec. 12, P.D. No. 735, S-1975; required in this section. (As amended by Sec. 8, P.D. No. 24, S-
and Sec. 10, P.D. No. 1636, S-1979) 1972 and Sec. 12, P.D. No. 735, S-1972)

(b) The compensable confinement shall begin on the first day of (e) The claim of reimbursement shall be adjudicated by the SSS
sickness, and the payment of such allowances shall be promptly within a period of two months from receipt thereof; Provided,
made by the employer every regular payday or on the fifteenth That should no payment be received by the employer within one
and last day of each month, and similarly in the case of direct month after the period prescribed herein for adjudication the
reimbursement shall thereafter earn simple interest of one per (f) That the SSS shall immediately reimburse the
cent per month until paid. (As amended by Sec. 8, P.D. No. 24, employer of one hundred per cent of the amount of
S-1972) maternity benefits advanced to the employee by the
employer upon receipt of satisfactory proof of such
(f) The provisions regarding the notification required of the payment and legality thereof; and
covered employee and the employer as well as the period within
which the claim for benefit or reimbursement may be filed shall (g) That if an employee should give birth or suffer
apply to all claims filed with the SSS beginning January 1, 1973. abortion or miscarriage without the required
(As amended by Sec. 8, P.D. No. 24, S-1972) contributions having been remitted for her by her
employer to the SSS, or without the latter having been
Section 14-A. Maternity Leave Benefit. A covered female previously notified by the employer of time of the
employee who has paid at least three monthly maternity pregnancy, the employer shall pay to the SSS damages
contributions in the twelve-month period preceding the semester equivalent to the benefits which said employee would
of her childbirth, abortion, or miscarriage and who is currently otherwise have been entitled to, and the SSS shall in turn
employed shall be paid a daily maternity benefit equivalent to pay such amount to the employee concerned. (As
one hundred per cent of her present basic salary, allowances amended by Sec. 7, P.D. No. 1202, S-1977; Sec. 11,
and other benefits or the cash equivalents of such benefits for P.D. No. 1636, S-1979; and R.A. 7322)
sixty days subject to the following conditions:
(a) That the employee shall have notified her employer of Section 15. Non-transferability of Benefits. The SSS shall
her pregnancy and the probable date of her childbirth pay the benefits provided for in this Act to such persons as may
which notice shall be transmitted to the SSS in be entitled thereto in accordance with the provisions of this Act:
accordance with the rules and regulations it may provide; Provided, That the beneficiary who is a national of a foreign
country which does not extend benefits to a Filipino beneficiary
(b) That the payment shall be advanced by the employer residing in the Philippines, or which is not recognized by the
in two equal installments within thirty days from the filing Philippines, shall not be entitled to receive any benefit under this
of the maternity leave application; Act: Provided, further, That notwithstanding the foregoing,
where the best interest of the SSS will be served, the
(c) That in case of caesarian delivery, the employees Commission may direct payments without regard to nationality
shall be paid the daily maternity benefit for seventy-eight or country of residence: Provided, further, That if the recipient is
days; a minor or a person incapable of administering his own affairs,
the Commission shall appoint a representative under such terms
(d) That payment of daily maternity benefits shall be a and conditions as it may deem proper: Provided, further, That
bar to the recovery of sickness benefits provided by this such appointment shall not be necessary in case the recipient is
Act for the same compensable period of sixty days for the under the custody of or living with the parents or spouse of the
same childbirth, abortion, or miscarriage; employee in which case the benefits shall be paid to such
parents or spouse, as representative payee of the recipient.
(e) That the maternity benefits provided under this Such benefits are not transferrable and no power of attorney or
section shall be paid only for the first four deliveries after other document executed by those entitled thereto, in favor of
March 13, 1973; any agent, attorney, or any other person for the collection
thereof on their behalf shall be recognized, except when they
are physically unable to collect personally such benefits:
Provided, further, That in case of death benefits, if no to attorney's fees not exceeding ten per cent of the benefits
beneficiary qualifies under this Act, said benefits shall be paid to awarded by the Commission, which fees shall not be payable
the legal heirs in accordance with the law of succession: before the actual payment of the benefits, and any stipulation to
Provided, finally, That notwithstanding any law to the contrary, the contrary shall be null and void.
the payment of benefits under this Act shall bar the recovery of
similar benefits under Title II of Book IV of the Labor Code of Any violation of the provisions of this Section shall be punished
the Philippines, as amended, during the period of such payment by a fine of not less than five hundred pesos nor more than five
for the same contingency, and conversely. (As amended by Sec. thousand pesos, or imprisonment for not less than six months
10, R.A. 2658; Sec. 4, R.A. 3839; Sec. 8, R.A. 4857; Sec. 8-A, nor more than one year, or both, at the discretion of the court.
P.D. No. 24, S-1972; and Sec. 13, P.D. No. 735, S-1975) (As amended by Sec. 4, P.D. No. 347, S-1973 and Sec. 8, P.D.
No. 1202, S-1977)
Section 16. Exemption from Tax, Legal Process and
Lien. All laws to the contrary notwithstanding the SSS and all E. Sources of Funds Employment Records and Reports
its assets and properties, all contributions collected and all
accruals thereto and income or investment earnings therefrom SECTION 18. Employee's Contribution. (a) Beginning as
as well as all supplies, equipment, papers or documents which of the last day of the calendar month when an employee's
may be required in connection with the operation or execution of compulsory coverage takes effect and every month thereafter
this Act shall be exempt from any tax, assessment, fee, charge, during his employment, the employer shall deduct and withhold
or customs or import duty; and all benefit payments made by from such employee's monthly salary, wage, compensation or
the SSS shall likewise be exempt from all kinds of taxes, fees or earnings, the employee's contribution in an amount
charges, and shall not be liable to attachments, garnishments, corresponding to his salary, wage, compensation or earnings
levy or seizure by or under any legal or equitable process during the month in accordance with the following schedule
whatsoever, either before or after receipt by the person or effective on January 1, 1987:
persons entitled thereto, except to pay any debt of the covered
employee to the SSS. No tax measure hereafter enacted shall
Salary Range of Monthly Monthly Contribution
apply to the SSS, unless it expressly revokes the declared policy
Bracket Compensation Salary Employer Employee Total
of the State in section two hereof granting tax-exemption to the
Number Credit
SSS. Any tax assessment against, and still unpaid by the SSS
shall be null and void. (As amended by Sec. 9, P.D. No. 24, S- I P 1 - 149.99 P 125.00 P 6.40 P 4.10 P 10.50
1972 and Sec. 14, P.D. No. 735, S-1975) II 150 - 199.99 175 9 5.7 14.7
III 200 - 249.99 225 11.4 7.5 18.9
Section 17. Fee of Agents, Attorneys, etc. No agent,
IV 250 - 349.99 300 15.2 10 25.2
attorney or other person in charge of the preparation, filing or
pursuing any claim for benefit under this Act shall demand or V 350 - 499.99 425 21.6 14.1 35.7
charge for his services any fee, and any stipulation to the VI 500 - 699.99 600 30.4 20 50.4
contrary shall be null and void. The retention or deduction of any VII 700 - 899.99 800 40.5 26.7 67.2
amount from any benefit granted under this Act for the payment VIII 900 - 1,000.00 50.7 33.3 84
of fees for such services is prohibited: Provided, however, That
1099.99
any member of the Philippine Bar who appears as counsel in any
case heard by the Social Security Commission shall be entitled IX 1100 - 1,250.00 63.3 41.7 105
1399.99
X 1400 - 1,500.00 76 50 126 (b) Every employer shall issue a receipt for all contributions
1749.99 deducted from the employee's compensation or shall indicate
XI 1750 - 2,000.00 101.3 66.7 168 such deductions on the employee's pay envelopes. (As amended
2249.99 by Sec. 12, P.D. No. 1636, S-1979)

XII 2250 - 2,500.00 126.7 83.3 210

Section 19. Employer's Contributions. (a) Beginning as of
2749.99
the last day of the month when an employee's compulsory
XIII 2750 - OVER 3,000.00 152 100 252 coverage takes effect and every month thereafter during his
employment, his employer shall pay, with respect to such
The tabulated schedule for the monthly contribution of the self- covered employee, the employer's contribution in accordance
employed and voluntary members effective January 1, 1987 with the schedule indicated in section eighteen of this Act.
shall be as follows: Notwithstanding any contract to the contrary, an employer shall
not deduct, directly or indirectly, from the compensation of his
Salary Range of Monthly Salary Monthly employees covered by the SSS or otherwise recover from them
Bracket compensation Credit Contribution the employer's contributions with respect to such employees.
Number
I P 1 - 149.99 P 125.00 P 10.00 (b) The remittance of such contributions by the employer shall
be supported by a quarterly collection list to be submitted to the
II 150 - 199.99 175 14 SSS at the end of each calendar quarter indicating the correct ID
III 200 - 249.99 225 18 number of the employer, the correct names and SS numbers of
IV 250 - 349.99 300 24 the employees and the total contributions paid for their account
V 350 - 499.99 425 34 during the quarter. (As amended by Sec. 13, P.D. No. 1636, S-
1979)
VI 500 - 699.99 600 48
VII 700 - 899.99 800 64 Section 19-A. Contributions of the Self-employed. The
VIII 900 - 1,099.99 1,000.00 80 contributions to the SSS of the self-employed shall be
IX 1,100 - 1,399.99 1,250.00 100 determined in accordance with section eighteen of this Act:
Provided, That the average monthly net earnings declared by
X 1,400 - 1,749.99 1,500.00 120
the self-employed at the time of his registration with the SSS
XI 1,750 - 2,249.99 2,000.00 160 shall be considered as his monthly compensation and he shall
XII 2,250 - 2,749.99 2,500.00 200 pay both the employer and employee contributions.
XIII 2,750 - OVER 3,000.00 240
Net earnings as understood under this section shall be the net
The maximum covered earnings or compensation of all SSS income from his business or profession as reflected in the
members shall be limited to three thousand pesos per month as income tax return for the immediately preceding year, excluding
provided in the foregoing schedules unless otherwise provided rental income, dividend, interest investments and the like or all
by the Social Security Commission through rules and regulations types of incomes which are not derived from his business
taking into consideration actual calculations and rate of benefits. registered with the SSS or from the practice of his profession.
(As amended by Sec. 10, R.A. 1792; Sec. 11, R.A. 2658; Sec.
10, P.D. No. 24, S-1972; and Sec. 9, P.D. No. 1202, S-1986)
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 becomes
the new basis of his monthly salary credit. (As amended by Sec.
14, P.D. No. 1636, S-1979)
Section 20. Government Contribution. As the contribution
of the Government to the operation of the System, the Congress
shall annually appropriate out of any funds in the National
Treasury not otherwise appropriated, the necessary sum or
sums to meet the estimated expenses of the System for each
ensuing year. In addition to this contribution, the Congress shall
appropriate from time to time such sum or sums as may be
needed to assure the maintenance of an adequate working
balance of the funds of the System as disclosed by suitable
periodic actuarial studies to be made of the operations of the
System.
Section 21. Government Guarantee. The benefits
prescribed in this Act shall not be diminished and to guarantee
said benefits the Government of the Republic of the Philippines
accepts general responsibility for the solvency of the System.
(As amended by Sec. 13, R.A. 1792)
Section 22. Remittance of Contributions. (a) The
contribution imposed in the preceding section shall be remitted
to the SSS within the first seven days of each calendar month
following the month for which they are applicable or within such
time as the Commission may prescribe. Every employer required
to deduct and to remit such contributions shall be liable for their
payment and if any contribution is not paid to the SSS as herein
prescribed, he shall pay besides the contribution a penalty
thereon of three per cent per month from the date the
contribution falls due until paid. If deemed expedient and
advisable by the Commission, the collection and remittance of
contributions shall be made quarterly or semi-annually in
advance, the contributions payable by the employees to be
advanced by their respective employers: Provided, That upon
separation of an employee, any contribution so paid in advance
but not due shall be credited or refunded to his employer. (As
amended by Sec. 12, P.D. No. 24, S-1972)
(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 prejudice 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 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. (As
amended by Sec. 15, P.D. No. 1636, S-1979)
(c) Should any person, natural or juridical, default in any
payment of contributions, the Commission may also collect the
same in either of the following ways:
(1) By an action in court, which shall hear and dispose of
the case in preference to any other civil action, or
(2) By issuing a warrant to the Sheriff of any province or
city commanding him to levy upon and sell any real and
personal property of the debtor. The Sheriff's sale by
virtue of said warrant shall be governed by the same
procedure prescribed for executions against property
upon judgments by a court of record.
(d) The last complete record of monthly contributions paid by
the employer or the average of the monthly contributions paid
during the past three years as of the date of filing of the action
for collection shall be presumed to be the monthly contributions
payable by and due from the employer to the SSS for each of
the unpaid month, unless contradicted and overcome by other
evidence: Provided, That the SSS shall not be barred from
determining and collecting the true and correct contributions due
the SSS even after full payment pursuant to this paragraph, nor
shall the employer be relieved of his liability under section
twenty-eight of this Act. (As amended by Sec. 12, P.D. No. 24,
S-1972 and Sec. 11, P.D. No. 1202, S-1977)
(e) For purposes of this Section, any employer who is delinquent
or has not remitted all the monthly contributions due and
payable may within six months from the issuance of this
Executive Order remit said contributions to the SSS and submit
the corresponding collection lists herefore without incurring the
prescribed three per cent penalty. In case the employer fails to
remit to the SSS the said contributions within the six months
grace period, the penalty of three per cent shall be imposed
from the time the contributions first became due as provided in
paragraph (a) of this section. (As amended by Sec. 12, P.D. No.
24, S-1972; Sec. 6, P.D. No. 177, S-1973; and Sec. 4, E.O. No.
28, S-1986)
Section 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 per cent per month for late payments
provided for in paragraph (a) of section twenty-two of this Act
and the manner of collection of contributions specified in
paragraphs (b), (c) and (d) of section twenty-two of this Act are
also applicable to the collection of penalties and contributions of
the covered self-employed. (As amended by Sec. 16, P.D. No.
1636, S-1979)
Section 23. Method of Collection and Payment. The SSS
shall require a complete and proper collection and payment of
contributions and proper identification of the employer and the
employee. Payment may be made in cash, checks, stamp,
coupons, tickets, or other reasonable devices that the
Commission may adopt. (As amended by Sec. 15, P.D. No. 735,
S-1975)
Section 24. Employment Records and Reports. (a) Each
employer shall immediately report to the SSS the names, ages,
civil status, occupations, salaries and dependents of all his
employees who are subject to compulsory coverage: Provided,
That if an employee subject to compulsory coverage should die
or become sick or disabled or reach the age of sixty without the
SSS having previously received any report or written
communication about him from his employer or a contribution
paid in his name by his employer, the said employer shall pay to
the SSS the damages equivalent to the benefits to which said
employee would have been entitled had his name been reported
on time by the employer to the SSS, except that in case of
pension benefits, the employer shall be liable to pay the SSS
damages equivalent to five year's monthly pension; including
dependents' pension: Provided, further, That if the contingency
occurs within thirty days from the date of employment, the
employer shall be relieved of his liability for damages. (As
amended by Sec. 15, R.A. 1792; Sec. 9, R.A. 4857; Sec. 13,
P.D. No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and Sec.
12, P.D. No. 1202, S-1977)
(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
reduction of benefits, the employer shall pay to the SSS
damages to the extent of such reduction. (As amended by Sec.
13, P.D. No. 24, S-1972; Sec. 16, P.D. No. 735, S-1975; and
Sec. 17, P.D. No. 1636, S-1979)
In addition to the liability mentioned in the preceding
paragraphs (a) and (b) hereof, the employer shall also be liable
for the payment of the corresponding unremitted contributions
and penalties thereon. (As amended by Sec. 17, P.D. No. 1636,
S-1979)
(c) The records and reports duly accomplished and submitted to
the SSS by the employee or the employer, as the case may be,
shall be kept confidential by the SSS except in compliance with a
subpoena duces tecum issued by the Courts, shall not be
divulged without the consent of the Administrator or any official
of the SSS duly authorized by him, shall be presumed correct as
to the data and other matters stated therein, unless the
necessary corrections to such records and reports have been
properly made by the parties concerned before the right to the
benefit being claimed accrues, and shall be made the basis for
the adjudication of the claim. If as a result of such adjudication
the SSS in good faith pays a monthly pension to a beneficiary
who is inferior in right to another beneficiary or with whom
another beneficiary is entitled to share, such payments shall
discharge the SSS from liability, unless and until such other
beneficiary notifies the SSS of his claim prior to the payments.
(As amended by Sec. 13, P.D. No. 24, S-1972 and Sec. 16, P.D.
No. 735, S-1975)
(d) Every employer shall keep true and accurate work records
for such period and containing such information as the
Commission may prescribe, in addition to an "Annual Register of
New and Separated Employees" which shall be secured from the
SSS wherein the employer shall enter on the first day of
employment or on the effective date of separation, the names of
the persons employed or separated from employment, their SSS
numbers, and such other data that the Commission may require
and said annual register shall be submitted to the SSS in the
month of January of each year. Such records shall be open for
inspection by the SSS or its authorized representatives quarterly to or collected by the SSS every year under this Act, and all
or as often as the SSS may require.
The SSS may also require each employer to submit, with respect requirements as provided by law for other public special funds:
to the persons in his employ, reports needed for the effective
administration of this Act. (As amended by Sec. 13, P.D. No. 24, contributions plus three per cent of other revenues shall be
S-1972)
(e) Effective July 1, 1973, each employer shall require as a
condition to employment, the presentation of a registration
number secured by the prospective employee from the SSS in
accordance with such procedure as the SSS may adopt:
Provided, That in case of employees who have earlier been
assigned registration numbers by virtue of a previous
employment, such numbers originally assigned to them should
be used for purposes of this section: Provided, further, That the
issuance of such registration numbers by the SSS shall not
exempt the employer from complying with the provisions of
paragraph (a) of this section. (As amended by Sec. 13, P.D. No.
24, S-1972)
(f) Notwithstanding any law to the contrary, microfilm copies of
original SSS records and reports, duly certified by the official
custodian thereof, shall have evidentiary value as the originals
and be admissible as evidence in all legal proceedings. (As
amended by Sec. 16, P.D. No. 735, S-1975)
Section 24-A. Report and Registration of the Self-
employed. Each covered self-employed person shall, within
thirty 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 without the SSS having
previously received such report, the SSS shall not pay him the
corresponding benefit. (As amended by Sec. 18, P.D. No. 1636,
S-1979)
F. Funds of the System
Section 25. Deposit and Disbursements. All moneys paid
accruals thereto shall be deposited, administered and disbursed
in the same manner and under the same conditions and
Provided, That not more than twelve per cent of the total yearly
disbursed for salaries and wages, purchases of office equipment
and materials, operational expenses and the maintenance of
regional offices of the SSS: Provided, further, That if the
expenses in any year are less than the maximum amount
permissible, the difference shall not be availed of as additional
expenses in the following years. (As amended by Sec. 16, R.A.
2658; Sec. 5, R.A. 3839; Sec. 10, R.A. 4857; Sec. 13-A, P.D.
No. 24, S-1972; Sec. 17, P.D. No. 735, S-1975; and Sec. 10,
E.O. No. 102, S-1986)
Section 26. Investment of Reserve Funds. All revenues of
the SSS that are not needed to meet the current administrative
and operational expenses incidental to the carrying out of this
Act shall be accumulated in a fund to be known as the 'Reserve
Fund'. Such portions of the Reserve Fund as are not needed to
meet the current benefit obligations thereof shall be invested to
earn an average annual income of at least nine per cent and
shall be known as the 'Investment Reserve Fund' which shall be
invested in any or all of the following: (As amended by Sec. 14,
P.D. No. 24, S-1972; Sec. 19, P.D. No. 1636, S-1979; and Sec.
11, E.O. No. 102, S-1986)
(a) In interest-bearing bonds or securities of the
Government of the Philippines, or bonds or securities for
the payment of the interest and principal to which the
faith and credit of the Republic of the Philippines is
pledged.
(b) In interest-bearing deposits or securities in any
domestic bank doing business in the Philippines:
Provided, That such deposits shall not exceed at any time
the unimpaired capital and surplus or total private
deposits of the depository bank, whichever is smaller:
Provided, further, That said bank shall first have been
designated as the depository for this purpose by the
Monetary Board of the Bangko Sentral ng Pilipinas:
Provided, finally, That such investment in deposits or
securities shall be equitably distributed to all designated
banks. (As amended by Sec. 14, P.D. No. 24, S-1972)
(c) In loans or interest-bearing advances to the National
Government for the construction of permanent toll
bridges, toll roads or government office buildings in
accordance with actuarial considerations and the
conditions prescribed by law in such cases: Provided,
That the tolls shall be collected by the SSS for a
reasonable fee. (As amended by Sec. 14, P.D. No. 24, S-
1972)
(d) In direct housing loans to covered employees and
group housing projects giving priority to the low-income
groups, up to a maximum of ninety per cent of the
appraised value of the properties to be mortgaged by the
borrowers and in loans for the construction and the
maintenance of hospitals and institutions for the sick,
aged and infirmed members and their families, referred
to in section 4 (j) of this Act: Provided, That such
investment shall not exceed thirty per cent of the
Investment Reserve Fund. (As amended by Sec. 15, R.A.
2658; Sec. 14, P.D. No. 24, S-1972; Sec. 18, P.D. No.
735, S-1975; and Sec. 11, E.O. No. 102, S-1986)
(e) In short and medium term loans to covered
employees such as salary, educational, calamity and
emergency loans: Provided, That not more than ten per
cent of the Investment Reserve Fund at any time shall be
invested for this purpose. (As amended by Sec. 15, R.A.
2658; Sec. 14, P.D. No. 24, S-1972; and Sec. 11, E.O.
No. 102, S-1986)
(f) In other income earning projects and investments
secured by first mortgages on real estate collaterals
which, in the determination of the Commission, shall
redound to the benefit of the SSS, its members, as well
as the public welfare: Provided, That any such
investment shall be made with due diligence and
prudence to earn the highest possible interest consistent
with safety. (As amended by Sec. 17, R.A. 1792; Sec.
11, R.A. 4857; and Sec. 14, P.D. No. 24, S-1972)
(g) As part of its investment operations, the SSS shall act
as insurer of all or part of its interests on SSS properties
mortgaged to the SSS, or lives of mortgagors whose
properties are mortgaged to the SSS. For this purpose,
the SSS shall establish a separate account to be known
as the "Mortgagors' Insurance Account." All amounts
received by the SSS in connection with the aforesaid
insurance operations shall be placed in the Mortgagors'
Insurance Account. The assets and liabilities of the
Mortgagors' Insurance Account shall at all times be
clearly identifiable and distinguishable from the assets
and liabilities in all other accounts of the SSS.
Notwithstanding any provision of law to the contrary, the
assets held in the Mortgagors' Insurance Account shall
not be chargeable with the liabilities arising out of any
other business the SSS may conduct but shall be held
and applied exclusively for the benefit of the owners or
beneficiaries of the insurance contracts issued by the SSS
under this paragraph.
(h) The SSS may insure any of its interests or part
thereof with any private company or reinsurer. The
Insurer Commission or its authorized representatives
shall make an examination into the financial condition
and methods of transacting business of the SSS at least
once in two years, but such examination shall be limited
to the insurance operation of the SSS as authorized
under this section and shall not embrace the other
operations of the SSS; and the report of said examination
shall be submitted to the Commission and a copy thereof
shall be furnished the office of the President of the
Philippines within a reasonable time after the close of the
examination: Provided, That for each examination, the
SSS shall pay to the Insurance Commission an amount
equal to the actual expenses of the Insurance
Commission in the conduct of the examination including
the salaries of the examiners and of the actuary of the
Insurance Commission who have been assigned to make
such examination for the actual time spent in said
examination: Provided, further, That the general law on
insurance promulgated thereunder shall have suppletory
application insofar as it is not in conflict with the SS Law
and its rules and regulations. (As amended by Sec. 14,
P.D. No. 24, S-1972; Sec. 1, P.D. No. 65; Sec. 7, P.D.
No. 177, S-1973; and Sec. 18, P.D. No. 735, S-1975)
(i) In bonds, debentures or other evidences of
indebtedness of any solvent corporation or institution
created or existing under the laws of the Philippines:
Provided, That the issuing, assuming or guaranteeing
entity or its predecessors shall not have defaulted in the
payment of interest on any of its securities and that
during each of any three including the last two of the five
fiscal years next preceding the date of acquisition by the
SSS of such bonds, debentures, or other evidences of
indebtedness, the net earnings of the issuing, assuming
or guaranteeing institution available for its fixed charges,
as hereinafter defined, shall have been not less than one
and one-quarter times the total of its fixed charges for
such year: Provided, further, That such investment shall
not exceed 10 per cent of the Investment Reserve Fund.
As used in this section, the term 'net earnings available
for fixed charges' shall mean net income after deducting
operating and maintenance expenses, taxes other than
income taxes, depreciation and depletion; but excluding
extraordinary non-recurring items of income or expense
appearing in the regular financial statement of the
issuing, assuming or guaranteeing institution. The Term
'fixed charges' shall include interest on funded and
unfunded debt, amortization of debt discount and rentals
for leased properties. (As amended by Sec. 12, E.O. No.
102, S-1986)
(j) In preferred stocks of any solvent corporation or
institution created or existing under the laws of the
Philippines: Provided, That the issuing, assuming, or
guaranteeing entity or its predecessors has paid regular
dividends upon its preferred or guaranteed stocks for a
period of at least three years next preceding the date of
investment in such preferred or guaranteed stocks:
Provided, further, That if the stocks are guaranteed, the
amount of stocks so guaranteed is not in excess of fifty
percentum of the amount of the preferred or common
stocks, as the case may be, of the issuing corporations:
Provided, furthermore, That if the corporation or
institution has not paid dividends upon its preferred
stocks, the corporation or institution has sufficient
retained earnings to declare dividends for at least two
 years on such preferred stock: Provided, finally, That 15, P.D. No. 24, S-1972; Sec. 8, P.D. No. 177, S-1973; and
such investment shall not exceed 10 per cent of the Sec. 5, P.D. No. 347, S-1973)
Investment Reserve Fund. (As amended by Sec. 12, E.O.
No. 102, S-1986) (b) Whoever shall obtain or receive any money or check under
this Act or any agreement thereunder, without being entitled
(k) In common stocks of any solvent corporation or thereto with intent to defraud any covered employee, employer
institution created or existing under the laws of the or the SSS, shall be fined not less than five hundred pesos nor
Philippines listed in the stock exchange with proven track more than five thousand pesos and imprisoned for not less than
record of profitability and payment of dividends over the six months nor more than one year. (As amended by Sec. 15,
last three years: Provided, That such investment shall not P.D. No. 24, S-1972)
exceed ten per cent of the Investment Reserve Fund. (As
amended by Sec. 12, E.O. No. 102, S-1986) (c) Whoever buys, sells, offers for sale, uses, transfers, takes or
gives in exchange, or pledges or gives in pledge, except as
Section 27. Records and Reports. The administrator shall authorized in this Act or in regulations made pursuant thereto,
keep and cause to be keep records of operations, of the funds of any stamp, coupon, ticket, book or other device, prescribed
the System and of disbursements thereof and all accounts of pursuant to section twenty-three hereof by the Commission for
payments made out of said funds. During the month of January the collection or payment of contributions required herein, shall
of each year, the Administrator shall prepare for submission to be fined not less than five hundred pesos nor more than five
the President and to the Congress of the Philippines a report of thousand pesos, or imprisoned for not less than six months nor
operations of the System during the preceding year including more than one year, or both, at the discretion of the court.
statistical data on the number of persons covered and benefited,
their occupations and employment status, the duration and (d) Whoever, with intent to defraud, alters, forges, makes or
amount of benefits paid, the finances of the System at the close counterfeits any stamp, coupon, ticket, book or other device
of the said year, and recommendations. He shall also cause to prescribed by the Commission for the collection or payment of
be published in two newspapers of general circulation in the any contribution required herein, or uses, sells, lends, or has in
Philippines a synopsis of the annual report, showing in particular his possession any such altered, forged, or counterfeited
the status of the finances of the System and the benefits materials or makes, uses, sells, or has in his possession any
administered. such altered, forged material in imitation of the material used in
the manufacture of such stamp, coupon, ticket, book, or other
Section 28. Penal Clause. (a) Whoever, for the purpose of device, shall be fined not less than one thousand pesos nor
causing any payment to be made under this Act, or under an more than ten thousand pesos or imprisoned for not less than
agreement thereunder, where none is authorized to be paid, one year nor more than five years, or both, at the discretion of
shall make or cause to be made any false statement or the court.
representation as to any compensation paid or received or
whoever makes or causes to be made any false statement of a (e) Whoever fails or refuses to comply with the provisions of this
material fact in any claim for any benefit payable under this Act, Act or with the rules and regulations promulgated by the
or application for loan with the SSS, or whoever makes or Commission, shall be punished by a fine of not less than five
causes to be made any false statement, representation, hundred pesos nor more than five thousand pesos,
affidavit, or document in connection with such claim or loan, imprisonment for not less than six months nor more than one
shall suffer the penalties provided for in Art. one hundred year, or both, at the discretion of the court: Provided, That
seventy-two of the Revised Penal Code. (As amended by Sec. 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 a 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. (As amended by Sec. 19, R.A. 1792; Sec. 16, R.A. 2658,
Sec. 8, P.D. No. 177, S-1973; and Sec. 20, P.D. No. 1636, S-
1979)
(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 to the
penalties provided in this Act for the offense.
(g) Any employee of the System who receives or keeps funds or
property belonging, payable or deliverable to the System and
who shall appropriate the same, or shall take or misappropriate
or shall consent, or through abandonment or negligence shall
permit any other person to take such property or funds, wholly
or partially, or shall otherwise be guilty of misappropriation of
such funds or property, shall suffer the penalties provided in Art.
two hundred seventeen of the Revised Penal Code. (As amended
by Sec. 16, R.A. 2658)
(h) Any employer who after deducting the monthly contributions
or loan amortizations from his employee's compensation; fails to
remit the said deductions to the SSS within thirty days from the
date they became due shall be presumed to have
misappropriated such contributions or loan amortizations and
shall suffer the penalties provided in Art. three hundred fifteen
of the Revised Penal Code. (As amended by Sec. 15, P.D. No.
24, S-1972)
(i) Criminal action arising from a violation of the provisions of
this Act may be commenced by the SSS or the employee
concerned either under this Act or in appropriate cases under
the Revised Penal Code: Provided, That such criminal action may
be filed by the SSS in the city or municipality where the SSS
provincial or regional office is located if the violation was
committed within its territorial jurisdiction or in Metro Manila, at
the option of the SSS. (As amended by Sec. 15, P.D. No. 24, S-
1972; Sec. 19, P.D. No. 735, S-1975; and Sec. 13, P.D. No.
1202, S-1977)
Section 29. Government Aid. The establishment of the
Social Security System shall not disqualify the covered
employees and employers from receiving such government
assistance, financial or otherwise, as may be provided.
Section 30. Separability Clause. In the event any provision
of this Act or the application of such provision to any person or
circumstance is declared invalid, the remainder of this Act or the
application of said provision to other persons or circumstances
shall not be affected by such declaration.
Section 31. Saving Clause. The Assembly hereby reserves
the right to amend, alter, or repeal any provision of this Act, and
no person shall be or shall be deemed to be vested with any
property or other right by virtue of the enactment or operation
of this Act. (As amended by Sec. 21, R.A. 1792 and Sec. 20,
P.D. No. 735, S-1975)
Section 32. Effectivity. This Act shall take effect upon its
approval.
Approved: June 18, 19541awphil
Republic Act No. 8291 May 30, 1997
AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS
AMENDED, EXPANDING AND INCREASING THE COVERAGE
AND BENEFITS OF THE GOVERNMENT SERVICE
INSURANCE SYSTEM, INSTITUTING REFORMS THEREIN
AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled::
Section 1. Presidential Decree No. 1146, as amended,
otherwise known as the "Revised Government Service
Insurance Act of 1977", is hereby further amended to read as
follows:
"SECTION 1. Title. - The title of this Act shall be: "The
Government Service Insurance System Act of 1997."
"A. DEFINITIONS
"SEC. 2. Definition of terms.- Unless the context
otherwise indicates, the following terms shall mean:
"(a) GSIS- The Government Service Insurance System
created by Commonwealth Act No. 186;
"(b) Board- The Board of Trustees of the Government
Service Insurance System;
"(c) Employer- The national government, its political
subdivisions, branches, agencies or instrumentalities,
including government-owned or controlled corporations,
and financial institutions with original charters, the
constitutional commissions and the judiciary;
"(d) Employee or Member- Any person receiving
compensation while in the service of an employer as
defined herein, whether by election or appointment,
irrespective of status of appointment, including barangay
and Sanggunian officials;
"(e) Active Member- A member who is not separated
from the service;
"(f) Dependents- Dependents shall be the following: (a)
the legitimate spouse dependent for support upon the
member or pensioner; (b) the legitimate, legitimated,
legally adopted child, including the illegitimate child, who
is unmarried, not gainfully employed, not over the age of
majority, or is over the age of majority but incapacitated
and incapable of self-support due to a mental or physical
defect acquired prior to age of majority; and (c) the
parents dependent upon the member for support;
"(g) Primary beneficiaries- The legal dependent spouse
until he/she remarries and the dependent children;
"(h) Secondary beneficiaries- The dependent parents
and, subject to the restrictions on dependent children,
the legitimate descendants;
"(i) Compensation- The basic pay or salary received by
an employee, pursuant to his election/appointment,
excluding per diems, bonuses, overtime pay, honoraria,
allowances and any other emoluments received in
addition to the basic pay which are not integrated into
the basic pay under existing laws;
"(j) Contribution- The amount payable to the GSIS by the
member and the employer in accordance with Section 5
of this Act;
"(k) Current Daily Compensation- The actual daily
compensation or the actual monthly compensation
divided by the number of working days in the month of
contingency but not to exceed twenty-two (22) days;
"(l) Average Monthly Compensation (AMC)- The quotient
arrived at after dividing the aggregate compensation
received by the member during his last thirty-six (36)
months of service preceding his separation/retirement/
disability/death by thirty-six (36), or by the number of
months he received such compensation if he has less
than thirty-six (36) months of service: Provided, That the
average monthly compensation shall in no case exceed
the amount and rate as may be respectively set by the
Board under the rules and regulations implementing this
Act as determined by the actuary of the GSIS: Provided,
further, That initially the average monthly compensation
shall not exceed Ten thousand pesos (P10,000.00), and
premium shall be nine percent (9%) and twelve percent
(12%) for employee and employer covering the AMC limit
and below and two percent (2%) and twelve percent
(12%) for employee and employer covering the
compensation above the AMC limit;
"(m) Revalued average monthly compensation- An
amount equal to one hundred seventy percent (170%) of
the first One thousand pesos (P1,000.00) of the average
monthly compensation plus one hundred percent (100%)
of the average monthly compensation in excess of One
thousand pesos (P1,000.00);
"(n) Lump sum- The basic monthly pension multiplied by
sixty (60);
"(o) Pensioner- Any person receiving old-age permanent
total disability pension or any person who has received
the lump sum excluding one receiving survivorship
pension benefits as defined in Section 20 of this Act;
"(p) Gainful Occupation- Any productive activity that
provided the member with income at least equal to the
minimum compensation of government employees;
"(q) Disability- Any loss or impairment of the normal
functions of the physical and/or mental faculty of a
member which reduces or eliminates his/her capacity to
continue with his/her current gainful occupation or
engage in any other gainful occupation;
"(r) Total Disability- Complete incapacity to continue with
his present employment or engage in any gainful
occupation due to the loss or impairment of the normal
functions of the physical and/or mental faculties of the
member;
"(s) Permanent Total Disability- Accrues or arises when
recovery from the impairment mentioned in Section 2 (Q)
is medically remote;
"(t) Temporary Total Disability- Accrues or arises when
the impaired physical and/or mental faculties can be
rehabilitated and/or restored to their normal functions;
"(u) Permanent Partial Disability- Accrues or arises upon
the irrevocable loss or impairment of certain portion/s of
the physical faculties, despite which the member is able
to pursue a gainful occupation.
"B. MEMBERSHIP IN THE GSIS
"SEC. 3. Compulsory Membership. - Membership in the
GSIS shall be compulsory for all employees receiving
compensation who have not reached the compulsory
retirement age, irrespective of employment status,
except members of the Armed Forces of the Philippines
and the Philippine National Police, subject to the
condition that they must settle first their financial
obligation with the GSIS, and contractuals who have no
employer and employee relationship with the agencies
they serve.
"Except for the members of the judiciary and
constitutional commissions who shall have life insurance
only, all members of the GSIS shall have life insurance,
retirement, and all other social security protections such
as disability, survivorship, separation, and unemployment
benefits.
"SEC. 4. Effect of Separation from the Service. - A
member separated from the service shall continue to be
a member, and shall be entitled to whatever benefits he
has qualified to in the event of any contingency
compensable under this Act.
"C. SOURCES OF FUNDS
"SEC. 5. Contributions. - (a) It shall be mandatory for the
member and employer to pay the monthly contributions
specified in the following schedule:
 "Monthly Compensation Percentagepositions,
MonthlyCompensation Payablesubsequent changes therein, if any, as may be
Member
I. Maximum Average
Monthly Compensation
(AMC) Limit and Below 9.0%
II. Over the Maximum AMC Limit
-Up to the Maximum AMC Limit 9.0%
-In Excess of the AMC Limit 2.0%
"Members of the judiciary and constitutional
commissioners shall pay three percent (3%) of their
monthly compensation as personal share and their
employers a corresponding three percent (3%) share for
their life insurance coverage.
"(b) The employer shall include in its annual
appropriation the necessary amounts for its share of the
contributions indicated above, plus any additional
premiums that may be required on account of the
hazards or risks of its employees occupation.
"(c) It shall be mandatory and compulsory for all
employers to include the payment of contributions in
their annual appropriations. Penal sanctions shall be
imposed upon employers who fail to include the payment
of contributions in their annual appropriations or
otherwise fail to remit the accurate/exact amount of
contributions on time, or delay the remittance of
premium contributions to the GSIS. The heads of offices
and agencies shall be administratively liable for non-
remittance or delayed remittance of premium
contributions to the GSIS.
"SEC. 6. Collection and Remittance of Contributions. - (a)
The employer shall report to the GSIS the names of all its
employees, their corresponding employment status,
of salaries and such other pertinent information,
including
by required by the GSIS; the employer shall deduct each
month from the monthly salary or compensation of each
Employer
employee the contribution payable by him in accordance
with the schedule prescribed in the rules and regulations
implementing this Act.
12.0%
"(b) Each employer shall remit directly to the GSIS the
employees and employers contributions within the first
12.0%
ten (10) days of the calendar month following the month
12.0%
to which the contributions apply. The remittance by the
employer of the contribution to the GSIS shall take
priority over and above the payment of any and all
obligations, except salaries and wages of its employees.
"SEC. 7. Interest on Delayed Remittances. - Agencies
which delay the remittance of any and all monies due the
GSIS shall be charged interests as may be prescribed by
the Board but not less than two percent (2%) simple
interest per month. Such interest shall be paid by the
employers concerned.
"SEC. 8. Government Guarantee. - The government of
the Republic of the Philippines hereby guarantees the
fulfillment of the obligations of the GSIS to its members
as and when they fall due.
"D. BENEFITS
"SEC. 9. Computation of the Basic Monthly Pension. - (a)
The basic monthly pension is equal to:
"1) thirty-seven and one-half percent (37.5%) of the
revalued average monthly compensation; plus
"2) two and one-half percent (2.5%) of said revalued
average monthly compensation for each year of service
in excess of (15) years: Provided, That the basic monthly
pension shall not exceed ninety percent (90%) of the
average monthly compensation.
"(b) The basic monthly pension may be adjusted upon
the recommendation of the President and General
Manager of the GSIS and approved by the President of
the Philippines in accordance with the rules and
regulations prescribed by the GSIS: Provided, however,
that the basic monthly pension shall not be less than One
thousand and three hundred pesos
(P1,300.00): Provided, further, that the basic monthly
pension for those who have rendered at least twenty (20)
years of service after the effectivity of this Act shall not
be less than Two thousand four hundred pesos
(P2,400.00) a month.
"SEC. 10. Computation of Service. - (a) The computation
of service for the purpose of determining the amount of
benefits payable under this Act shall be from the date of
original appointment/election, including periods of service
at different times under one or more employers, those
performed overseas under the authority of the Republic
of the Philippines, and those that may be prescribed by
the GSIS in coordination with the Civil Service
Commission.
"(b) All service credited for retirement, resignation or
separation for which corresponding benefits have been
awarded under this Act or other laws shall be excluded in
the computation of service in case of reinstatement in the
service of an employer and subsequent retirement or
separation which is compensable under this Act.
"For the purpose of this section, the term service shall
include full-time service with
compensation: Provided, that part-time and other
services with compensation may be included under such
rules and regulations as may be prescribed by the GSIS.
"SEPARATION BENEFITS
"SEC. 11. Separation Benefits. - The separation benefits
shall consist of: (a) a cash payment equivalent to one
hundred percent (100%) of his average monthly
compensation for each year of service he paid
contributions, but not less than Twelve thousand pesos
(P12,000) payable upon reaching sixty (60) years of age
upon separation, whichever comes later: Provided, that
the member resigns or separates from the service after
he has rendered at least three (3) years of service but
less than fifteen (15) years; or
"(b) a cash payment equivalent to eighteen (18) times
his basic monthly pension at the time of resignation or
separation, plus an old-age pension benefit equal to the
basic monthly pension payable monthly for life upon
reaching the age of sixty (60): Provided, that the
member resigns or separates from the service after he
has rendered at least fifteen (15) years of service and is
below sixty (60) years of age at the time of resignation
or separation.
"SEC. 12. Unemployment or Involuntary Separation
Benefits. - Unemployment benefits in the form of monthly
cash payments equivalent to fifty percent (50%) of the
average monthly compensation shall be paid to a
permanent employee who is involuntarily separated from
the service due to the abolition of his office or position
usually resulting from reorganization: Provided, That he
has been paying integrated contributions for at least one
(1) year prior to separation. Unemployment benefits shall
be paid in accordance with the following schedules:
"Contributions Made Benefit Duration
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3 months
6 or more years but less than 9 years 4 months
 9 or more years but less than 11 years 5 months
11 or more years but less than 15 years 6 months
"The first payment shall be equivalent to two (2) monthly
benefits. A seven-day (7) waiting period shall be imposed
on succeeding monthly payments.
"All accumulated unemployment benefits paid to the
employee during his entire membership with the GSIS
shall be deducted from voluntary separation benefits.
"The GSIS shall prescribe the detailed guidelines in the
operationalization of this section in the rules and
regulations implementing this Act.
"RETIREMENT BENEFITS
"SEC. 13. Retirement Benefits. - (a) Retirement benefits
shall be:
"(1) the lump sum payment as defined in this Act
payable at the time of retirement plus an old-age
pension benefit equal to the basic monthly
pension payable monthly for life, starting upon
expiration of the five-year (5) guaranteed period
covered by the lump sum; or
"(2) cash payment equivalent to eighteen (18)
months of his basic monthly pension plus monthly
pension for life payable immediately with no five-
year (5) guarantee.
"(b) Unless the service is extended by appropriate
authorities, retirement shall be compulsory for an
employee of sixty-five (65) years of age with at least
fifteen (15) years of service: Provided, That if he has less
than fifteen (15) years of service, he may be allowed to
continue in the service in accordance with existing civil
service rules and regulations.
"SEC. 13-A. Conditions for Entitlement. - A member who
retires from the service shall be entitled to the retirement
benefits enumerated in paragraph (a) of Section 13
hereof: Provided, That:
(1) he has rendered at least fifteen years of
service;
(2) he is at least sixty (60) years of age at the
time of retirement; and
(3) he is not receiving a monthly pension benefit
from permanent total disability.
"SEC. 14. Periodic Pension Adjustment. - The monthly
pension of all pensioners including all those receiving
survivorship pension benefits shall be periodically
adjusted as may be recommended by the GSIS actuary
and approved by the Board in accordance with the rules
and regulations prescribed by the GSIS.
"PERMANENT DISABILITY BENEFITS
"SEC. 15. General Conditions for Entitlement. - A
member who suffers permanent disability for reasons not
due to his grave misconduct, notorious negligence,
habitual intoxication, or willful intention to kill himself or
another, shall be entitled to the benefits provided for
under Sections 16 and 17 immediately following, subject
to the corresponding conditions thereof.
"SEC. 16. Permanent Total Disability Benefits. - (a) If the
permanent disability is total, he shall receive a monthly
income benefit for life equal to the basic monthly pension
effective from the date of disability:Provided, That:
 (1) he is in the service at the time of disability; or "(d) The following disabilities shall be deemed total and
permanent:
(2) if separated from the service, he has paid at
least thirty-six (36) monthly contributions within "(1) complete loss of sight of both eyes;
the five (5) year period immediately preceding
disability, or has paid a total of at least one "(2) loss of two (2) limbs at or above the ankle or
hundred eighty (180) monthly contributions, prior wrist;
to his disability: Provided, further, That if at the
time of disability, he was in the service and has "(3) permanent complete paralysis of two (2)
paid a total of at least one hundred eighty (180) limbs;
monthly contributions, in addition to the monthly
income benefit, he shall receive a cash payment
"(4) brain injury resulting in incurable imbecility or
equivalent to eighteen (18) times his basic
insanity; and
monthly pension: Provided, finally, That a
member cannot enjoy the monthly income benefit
for permanent disability and the old-age "(5) such other cases as may be determined by
retirement simultaneously. the GSIS.

"(b) If a member who suffers permanent total disability "SEC. 17. Permanent Partial Disability Benefits. - (a) If
does not satisfy conditions (1) and (2) in paragraph (a) the disability is partial, he shall receive a cash payment
of this section but has rendered at least three (3) years in accordance with a schedule of disabilities to be
of service at the time of his disability, he shall be prescribed by the GSIS: Provided, That he satisfies either
advanced the cash payment equivalent to one hundred conditions (1) or (2) of Section 16 (a);
percent (100%) of his average monthly compensation for
each year of service he paid contributions, but not less "(b) The following disabilities shall be deemed permanent
than Twelve thousand pesos (P12,000.00) which should partial:
have been his separation benefit.
"(1) complete and permanent loss of the use of:
"(c) Unless the member has reached the minimum
retirement age, disability benefit shall be suspended (i) any finger
when:
(ii) any toe
"(1) he is reemployed; or
(iii) one arm
"(2) he recovers from his disability as determined
by the GSIS, whose decision shall be final and (iv) one hand
binding; or
(v) one foot
"(3) he fails to present himself for medical
examination when required by the GSIS.
 (vi) one leg
(vii) one or both ears
(viii) hearing of one or both ears
(ix) sight of both eyes
"(2) such other cases as my be determined by the
GSIS.
"TEMPORARY DISABILITY BENEFITS
"SEC. 18. Temporary Total Disability Benefits. - (a) A
member who suffers temporary total disability for
reasons not due to any of the conditions enumerated in
Section 15 hereof shall be entitled to seventy-five
percent (75%) of his current daily compensation for each
day or fraction thereof of temporary disability benefit not
exceeding one hundred twenty (120) days in one
calendar year after exhausting all his sick leave credits
and collective bargaining agreement sick leave benefits,
if any, but not earlier than the fourth day of his
temporary total disability: Provided, That:
"(1) he is in the service at the time of his
disability; or
"(2) if separated, he has rendered at least three
(3) years of service and has paid at least six (6)
monthly contributions in the twelve-month period
immediately preceding his disability.
"Provided, however, That a member cannot enjoy the
temporary total disability benefit and sick leave pay
simultaneously: Provided, further, That if the disability
requires more extensive treatment that lasts beyond one
hundred twenty (120) days, the payment of the
temporary total disability benefit may be extended by the
GSIS but not to exceed a total of two hundred forty (240)
days.
"(b) The temporary total disability benefit shall in no case
be less than Seventy pesos (P70.00) a day.
"(c) The notices required of the member and the
employer, the mode of payment, and the other
requirements for entitlement to temporary total disability
benefits shall be provided in the rules and regulations to
be prescribed by the GSIS.
"SEC. 19. Non-scheduled Disability. - For injuries or
illnesses resulting in a disability not listed in the schedule
of partial/total disability provided herein, the GSIS shall
determined the nature of the disability and the
corresponding benefits therefor.
"SURVIVORSHIP BENEFITS
"SEC. 20. Survivorship Benefits. - When a member or
pensioner dies, the beneficiaries shall be entitled to
survivorship benefits provided in Sections 21 and 22
hereunder subject to the conditions therein provided for.
The survivorship pension shall consist of:
(1) the basic survivorship pension which is fifty
percent (50%) of the basic monthly pension; and
(2) the dependent childrens pension not
exceeding fifty percent (50%) of the basic
monthly pension
"SEC. 21. Death of a Member. - (a) Upon the death of a
member, the primary beneficiaries shall be entitled to:
(1) survivorship pension: Provided, That the
deceased:
 (i) was in the service at the time of his
death; or
(ii) if separated from the service, has at
least three (3) years of service at the time
of his death and has paid thirty-six (36)
monthly contributions within the five-year
period immediately preceding his death; or
has paid a total of at least one hundred
eighty (180) monthly contributions prior to
his death; or
(2) the survivorship pension plus a cash payment
equivalent to one hundred percent (100%) of his
average monthly compensation for every year of
service: Provided, That the deceased was in the
service at the time of his death with at least three
(3) years of service; or
(3) a cash payment equivalent to one hundred
percent (100%) of his average monthly
compensation for each year of service he paid
contributions, but not less than Twelve thousand
pesos (P12,000.00): Provided, That the deceased
has rendered at least three (3) years of service
prior to his death but does not qualify for the
benefits under item (1) or (2) of this paragraph.
(b) The survivorship pension shall be paid as follows:
(1) when the dependent spouse is the only
survivor, he/she shall receive the basic
survivorship pension for life or until he/she
remarries;
(2) when only dependent children are the
survivors, they shall be entitled to the basic
survivorship pension for as long as they are
qualified, plus the dependent childrens pension
equivalent to ten percent (10%) of the basic
monthly pension for every dependent child not
exceeding five (5), counted from the youngest
and without substitution;
(3) when the survivors are the dependent spouse
and the dependent children, the dependent
spouse shall receive the basic survivorship
pension for life or until he/she remarries, and the
dependent children shall receive the dependent
childrens pension mentioned in the immediately
preceding paragraph (2) hereof.
(c) In the absence of primary beneficiaries, the
secondary beneficiaries shall be entitled to:
(1) the cash payment equivalent to one hundred
percent (100%) of his average monthly
compensation for each year of service he paid
contributions, but not less than Twelve thousand
pesos (P12,000.00): Provided, That the member
is in the service at the time of his death and has
at least three (3) years of service; or
(2) in the absence of secondary beneficiaries, the
benefits under this paragraph shall be paid to his
legal heirs.
(d) For purposes of the survivorship benefits, legitimate
children shall include legally adopted and legitimated
children.
"SEC. 22. Death of a Pensioner. - Upon the death of an
old-age pensioner or a member receiving the monthly
income benefit for permanent disability, the qualified
beneficiaries shall be entitled to the survivorship pension
defined in Section 20 of this Act, subject to the provisions
of paragraph (b) of Section 21 hereof. When the
pensioner dies within the period covered by the lump
sum, the survivorship pension shall be paid only after the
expiration of the said period.
"FUNERAL BENEFITS
"SEC. 23. Funeral Benefits. - The amount of the funeral
benefits shall be determined and specified by the GSIS in
the rules and regulations but shall not be less than
Twelve thousand pesos (P12,000.00): Provided, That it
shall be increased to at least Eighteen thousand pesos
(P18,000.00) after five (5) years and shall be paid upon
the death of:
(a) an active member as defined under Section 2
(e) of this Act; or
(b) a member who has been separated from the
service, but who may be entitled to future benefit
pursuant to Section 4 of this Act; or
(c) a pensioner, as defined in Section 2 (o) of this
Act; or
(d) a retiree who at the time of his retirement was
of pensionable age under this Act but who opted
to retire under Republic Act No. 1616.
"LIFE INSURANCE BENEFITS
"SEC. 24. Compulsory Life Insurance. - All employees
except for Members of the Armed Forces of the
Philippines (AFP) and the Philippine National Police (PNP)
shall, under such terms and conditions as may be
promulgated by the GSIS, be compulsorily covered with
life insurance, which shall automatically take effect as
follows:
(1) for those employed after the effectivity of this
Act, their insurance shall take effect on the date of
their employment;
(2) for those whose insurance will mature after
the effectivity of this Act, their insurance shall be
deemed renewed on the day following the
maturity or expiry date of their insurance;
(3) for those without any life insurance as of the
effectivity of this Act, their insurance shall take
effect following said effectivity.
"SEC. 25. Dividends. - An annual dividend may be
granted to all members of the GSIS whose life insurance
is in force for at least one (1) year in accordance with a
dividends allocation formula to be determined by the
GSIS.
"SEC. 26. Optional Insurance. - Subject to the rules and
regulations prescribed by the GSIS, a member may apply
for insurance and/or pre-need coverage embracing life,
health, hospitalization, education, memorial plans, and
such other plans as may be designed by the GSIS, for
himself and/or his dependents. Any employer may
likewise apply for group insurance coverage for its
employees. The payment of the premiums/installments
for optional insurance and pre-need products may be
made by the insured or his employer and/or any person
acceptable to the GSIS.
"SEC. 27. Reinsurance. - The GSIS may reinsure any of
its interests or part thereof with any private company or
reinsurer whether domestic of foreign: Provided, That the
GSIS shall submit an annual report on its reinsurance
operations to the Insurance Commission.
"E. ADJUDICATION OF CLAIMS AND DISPUTES
"SEC. 28. Prescription. - Claims for benefits under this
Act except for life and retirement shall prescribe after
four (4) years from the date of contingency.
"SEC. 29. Facility of Payment. - The GSIS shall prescribe
rules and regulations to facilitate payment of benefits,
proceeds, and claims under this Act and any other laws
administered by the GSIS. Payments made by the GSIS
prior to its receipt of an adverse claim, to a beneficiary or
claimant subsequently found not entitled thereto, shall
not bar the legal and eligible recipient to his right to
demand the payment of benefits, proceeds, and claims
from the GSIS, who shall, however, have a right to
institute the appropriate action in a court of law against
the ineligible recipient.
"SEC. 30. Settlement of Disputes. - The GSIS shall have
original and exclusive jurisdiction to settle any disputes
arising under this Act and any other laws administered by
the GSIS.
The Board may designate any member of the Board, or
official of the GSIS who is a lawyer, to act as hearing
officer to receive evidence, make findings of fact and
submit recommendations, together with all documentary
and testimonial evidence to the Board within thirty (30)
working days from the time the parties have closed their
respective evidence and filed their last pleading. The
Board shall decide the case within thirty (30) days from
the receipt of the hearing officers findings and
recommendations. The cases heard directly by the Board
shall be decided within thirty (30) working days from the
time they are submitted by the parties for decision.
"SEC. 31. Appeals. - Appeals from any decision or award
of the Board shall be governed by Rules 43 and 45 of the
1997 Rules of Civil Procedure adopted by the Supreme
Court on April 8, 1997 which will take effect on July 1,
1997: Provided, That pending cases and those filed prior
to July 1, 1997 shall be governed by the applicable rules
of procedure: Provided, further, That the appeal shall
take precedence over all other cases except criminal
cases when the penalty of life imprisonment or death
or reclusion perpetua is imposable.
The appeal shall not stay the execution of the order or
award unless ordered by the Board, by the Court of
Appeals or by the Supreme Court and the appeal shall be
without prejudice to the special civil action of certiorari
when proper.
"SEC. 32. Execution of Decision. - When no appeal is
perfected and there is no order to stay by the Board, by
the Court of Appeals or by the Supreme Court, any
decision or award of the Board shall be enforced and
executed in the same manner as decisions of the
Regional Trial Court. For this purpose, the Board shall
have the power to issue to the city or provincial sheriff or
its appointed sheriff such writs of execution as may be
necessary for the enforcement of such decision or award,
and any person who shall fail or refuse to comply with
such decision, award, writ or process after being required
to do so shall, upon application by the GSIS, be punished
for contempt.
"SEC. 33. Oaths, Witnesses, and Production of Records. -
When authorized by the Board, an official or employee of
the GSIS shall have the power to administer oath and
affirmation, take deposition, certify to official acts, and
issue subpoena ad testificandum and subpoena duces
tecum to compel the attendance of witnesses and the
production of books, papers, correspondences, and other
records deemed necessary as evidence in connection with
any question arising under this Act. Any case of
contumacy shall be dealt with in accordance with the
provisions of Section 580 of the Revised Administrative
Code.
"F. FUNDS OF THE GSIS
"SEC. 34. Funds. - All contributions payable under
Section 5 of this Act together with the earnings and
accruals thereon shall constitute the GSIS Social
Insurance Fund. The said fund shall be used to finance
the benefits administered by the GSIS under this Act. In
addition, the GSIS shall administer the optional insurance
fund for the insurance coverage described in Section 26
hereof, the Employees Compensation Insurance Fund
created under P.D. 626, as amended, General Insurance
Fund created under Act No. 656, as amended, and such
other special funds existing or that may be created for
special groups or persons rendering services to the
government. The GSIS shall maintain the required
reserves to guarantee the fulfillment of its obligations
under this Act.
The funds of the GSIS shall not be used for purposes
other than what are provided for under this Act.
Moreover, no portion of the funds of the GSIS or income
thereof shall accrue to the General Fund of the national
government and its political subdivisions,
instrumentalities and other agencies including
government-owned and controlled corporations except as
may be allowed under this Act.
"SEC. 35. Deposits and Disbursements. - All revenues
collected and all accruals thereto shall be deposited,
administered and disbursed in accordance with the law. A
maximum expense loading of twelve percent (12%) of
the yearly revenues from all sources may be disbursed
for administrative and operational expenses except as
may be otherwise approved by the President of the
Philippines on the basis of actuarial and management
studies.
"SEC. 36. Investment of Funds. - The funds of the GSIS
which are not needed to meet the current obligations
may be invested under such terms and conditions and
rules and regulations as may be prescribed by the
Board: Provided, That investments shall satisfy the
requirements of liquidity, safety/security and yield in
order to ensure the actuarial solvency of the funds of the
GSIS: Provided, further, That the GSIS shall submit an
annual report on all investments made to both Houses of
Congress of the Philippines, to wit:
(a) in interest-bearing bonds or securities or other
evidence of indebtedness of the Government of
the Philippines;
(b) in interest-bearing deposits or securities in any
domestic bank doing business in the
Philippines: Provided, That in the case of such
deposits, there shall not exceed at any time the
unimpaired capital and surplus or total private
deposits of the depository bank, whichever is
smaller: Provided, further, That the said bank has
prior designation as a depository for the purpose
by the Monetary Board of the Central Monetary
Authority;
(c) in direct housing loans to members and group
housing projects secured by first mortgage, giving
priority to the low income groups and in short and
medium term loans to members such as salary,
policy, educational, emergency stock purchase
plan and other similar loans: Provided, That no
less than forty percent (40%) of the investible
fund of the GSIS Social Insurance Fund shall be
invested for these purposes;
(d) in bonds, securities, promissory notes or other
evidence of indebtedness of educational or
medical institutions to finance the construction,
improvement and maintenance of schools and
hospitals;
(e) in real estate property including shares of
stocks involving real state property and
investments secured by first mortgages on real
estate or other collaterals acceptable to the
GSIS: Provided, That such investment shall, in the
determination of the Board, redound to the benefit
of the GSIS, its members as well as the general
public;
 (f) in debt instruments and other securities traded
in the secondary markets;
(g) in loans to, or in bonds, debentures,
promissory notes or other evidence of
indebtedness of any solvent corporation created
or existing under the laws of the Philippines;
(h) in common and preferred stocks of any
solvent corporation or financial institution created
or existing under the laws of the Philippines listed
in the stock exchange with proven track record of
profitability over the last three (3) years and
payment of dividends at least once over the same
period;
(i) in domestic mutual funds including investments
related to the operations of mutual funds; and
(j) in foreign mutual funds and in foreign currency
deposits or foreign currency-denominated debts,
non-speculative equities and other financial
instruments or other assets issued in accordance
with existing laws of the countries where such
financial instruments are issued: Provided, That
these instruments or assets are listed in bourses
of the respective countries where these
instruments or assets are issued: Provided,
further, That the issuing company has proven
track record of profitability over the last three (3)
years and payment of dividends at least once over
the same period.
"SEC. 37. Records and Reports. - The GSIS shall keep
and cause to keep such records as may be necessary for
the purpose of making actuarial studies, calculations and
valuations of the funds of the GSIS including such data
needed in the computation of rates of disability,
mortality, morbidity, separation and retirement among
the members and any other information useful for the
adjustment of the benefits of the members. The GSIS
shall maintain appropriate books of accounts to record its
assets, liabilities, income, expenses, receipts and
disbursement of funds and other financial transactions
and operations.
"SEC. 38. Examination and Valuation of the Funds. - The
GSIS shall make a periodic actuarial examination and
valuation of its funds in accordance with accepted
actuarial principles.
"SEC. 39. Exemption from Tax, Legal Process and Lien. -
It is hereby declared to be the policy of the State that
the actuarial solvency of the funds of the GSIS shall be
preserved and maintained at all times and that
contribution rates necessary to sustain the benefits under
this Act shall be kept as low as possible in order not to
burden the members of the GSIS and their employers.
Taxes imposed on the GSIS tend to impair the actuarial
solvency of its funds and increase the contribution rate
necessary to sustain the benefits of this Act. Accordingly,
notwithstanding any laws to the contrary, the GSIS, its
assets, revenues including all accruals thereto, and
benefits paid, shall be exempt from all taxes,
assessments, fees, charges, or duties of all kinds. These
exemptions shall continue unless expressly and
specifically revoked and any assessment against the
GSIS as of the approval of this Act are hereby considered
paid. Consequently, all laws, ordinances, regulations,
issuances, opinions or jurisprudence contrary to or in
derogation of this provision are hereby deemed repealed,
superseded and rendered ineffective and without legal
force and effect.
"Moreover, these exemptions shall not be affected by
subsequent laws to the contrary unless this section is
expressly, specifically and categorically revoked or
repealed by law and a provision is enacted to substitute
or replace the exemption referred to herein as an
essential factor to maintain or protect the solvency of the
fund, notwithstanding and independently of the guaranty
of the national government to secure such solvency or
liability.
"The funds and/or the properties referred to herein as
well as the benefits, sums or monies corresponding to the
benefits under this Act shall be exempt from attachment,
garnishment, execution, levy or other processes issued
by the courts, quasi-judicial agencies or administrative
bodies including Commission on Audit (COA)
disallowances and from all financial obligations of the
members, including his pecuniary accountability arising
from or caused or occasioned by his exercise or
performance of his official functions or duties, or incurred
relative to or in connection with his position or work
except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.
"G. ADMINISTRATION
"SEC. 40. Implementing Body. - The Government Service
Insurance System as created under Commonwealth Act
No. 186 shall implement the provisions of this Act.
"SEC. 41. Powers and Functions of the GSIS. - The GSIS
shall exercise the following powers and functions:
(a) to formulate, adopt, amend and/or rescind
such rules and regulations as may be necessary to
carry out the provisions and purposes of this Act,
as well as the effective exercise of the powers and
functions, and the discharge of duties and
responsibilities of the GSIS, its officers and
employees;
(b) to adopt or approve the annual and
supplemental budget of receipts and expenditures
including salaries and allowances of the GSIS
personnel; to authorize such capital and operating
expenditures and disbursements of the GSIS as
may be necessary and proper for the effective
management and operation of the GSIS;
(c) to invest the funds of the GSIS, directly or
indirectly, in accordance with the provisions of this
Act;
(d) to acquire, utilize or dispose of, in any manner
recognized by law, real or personal property in the
Philippines or elsewhere necessary to carry out
the purposes of this Act;
(e) to conduct continuing actuarial and statistical
studies and valuations to determine the financial
condition of the GSIS and taking into
consideration such studies and valuations and the
limitations herein provided, re-adjust the benefits,
contributions, premium rates, interest rates or the
allocation or re-allocation of the funds to the
contingencies covered;
(f) to have the power of succession;
(g) to sue and be sued;
(h) to enter into, make, perform and carry out
contracts of every kind and description with any
person, firm or association or corporation,
domestic or foreign;
(i) to carry on any other lawful business
whatsoever in pursuance of, or in connection with
the provisions of this Act;
(j) to have one or more offices in and outside of
the Philippines, and to conduct its business and
exercise its powers throughout and in any part of
the Republic of the Philippines and/or in any or all
foreign countries, states and
territories: Provided, That the GSIS shall maintain
a branch office in every province where there
exists a minimum of fifteen thousand (15,000)
membership;
(k) to borrow funds from any source, private or
government, foreign or domestic, only as an
incident in the securitization of housing mortgages
of the GSIS and on account of its receivables from
any government or private entity;
(l) to invest, own or otherwise participate in
equity in any establishment, firm or entity;
(m) to approve appointments in the GSIS except
appointments to positions which are policy
determining, primarily confidential or highly
technical in nature according to the Civil Service
rules and regulations: Provided, That all positions
in the GSIS shall be governed by the
compensation and position classification system
and qualifications standards approved by the GSIS
Board of Trustees based on a comprehensive job
analysis and audit of actual duties and
responsibilities: Provided, further, That the
compensation plan shall be comparable with the
prevailing compensation plans in the private
sector and shall be subject to the periodic review
by the Board no more than once every four (4)
years without prejudice to yearly merit reviews or
increases based on productivity and profitability;
(n) to design and adopt an Early Retirement
Incentives Plan (ERIP) and/or financial assistance
for the purpose of retirement for its own
personnel;
(o) to fix and periodically review and adjust the
rates of interest and other terms and conditions
for loans and credits extended to members or
other persons, whether natural or juridical;
(p) to enter into agreement with the Social
Security System or any other entity, enterprise,
corporation or partnership for the benefit of
members transferring from one system to another
subject to the provisions of Republic Act No. 7699,
otherwise known as the Portability Law;
(q) to be able to float proper instrument to liquefy
long-term maturity by pooling funds for short-
term secondary market;
(r) to submit annually, not later than June 30, a
public report to the President of the Philippines
and the Congress of the Philippines regarding its
activities in the administration and enforcement of
this Act during the preceding year including
information and recommendations on board
policies for the development and perfection of the
programs of the GSIS;
(s) to maintain a provident fund, which consists of
contributions made by both the GSIS and its
officials and employees and their earnings, for the
payments of benefits to such officials and
employees or their heirs under such terms and
conditions as it may prescribe;
(t) to approve and adopt guidelines affecting
investments, insurance coverage of government
properties, settlement of claims, disposition of
acquired assets, privatization or expansion of
subsidiaries, development of housing projects,
increased benefit and loan packages to members,
and the enforcement of the provision of this Act;
(u) any provision of law to the contrary
notwithstanding, to authorize the payment of
extra remuneration to the officials and employees
directly involved in the collection and/or
remittances of contributions, loan repayments,
and other monies due to the GSIS at such rates
and under such conditions as it may
adopt: Provided, That the best interest of the
GSIS shall be observed thereby;
(v) to determine, fix and impose interest upon
unpaid premiums due from employers and
employees;
(w) to ensure the collection or recovery of all
indebtedness, liabilities and/or accountabilities,
including unpaid premiums or contributions in
favor of the GSIS arising from any cause or source
whatsoever, due from obligors, whether public or
private. The Board shall demand payment or
settlement of the obligations referred to herein
within thirty (30) days from the date the
obligation becomes due, and in the event of
failure or refusal of the obligor or debtor to
comply with the demand, to initiate or institute
the necessary or proper actions or suits, criminal,
civil or administrative or otherwise, before the
courts, tribunals, commissions, boards, or bodies
of proper jurisdiction within thirty (30) days
reckoned from the expiry date of the period fixed
in the demand within which to pay or settle the
account;
(x) to design and implement programs that will
promote and mobilize savings and provide
additional resources for social security expansion
and at the same time afford individual members
appropriate returns on their savings/investments.
The programs shall be so designed as to spur
socio-economic take-off and maintain continued
growth; and
(y) to exercise such powers and perform such
other acts as may be necessary, useful, incidental
or auxiliary to carry out the provisions of this Act,
or to attain the purposes and objectives of this
Act.
"SEC. 42. The Board of Trustees; its Composition; Tenure
and Compensation. - The corporate powers and functions
of the GSIS shall be vested in and exercised by the Board
of Trustees composed of the President and General
Manager of the GSIS and eight (8) other members to be
appointed by the President of the Philippines, one (1) of
whom shall be either the President of the Philippine Public
School Teachers Association (PPSTA) or the President of
the Philippine Association of School Superintendents
(PASS), another two (2) shall represent the leading
organizations or associations of government
employees/retirees, another four (4) from the banking,
finance, investment, and insurance sectors, and one (1)
recognized member of the legal profession who at the
time of appointment is also a member of the GSIS. The
Trustees shall elect from among themselves a Chairman
while the President and General Manager of the GSIS
shall automatically be the vice-chairman.
The Trustees, except the President and General Manager
who shall cease as trustee upon his separation, shall hold
office for six (6) years without reappointment, or until
their successors are duly appointed and qualified.
Vacancy, other than through the expiration of the term,
shall be filled for the unexpired term only. The members
of the Board shall be entitled to a per diem of Two
thousand five hundred pesos (P2,500.00) for each board
meeting actually attended by them, but not to exceed
Ten thousand pesos (P10,000.00) a month and
reasonable transportation and representation allowances
as may be fixed by the Board.
"SEC. 43. Powers and Functions of the Board of
Trustees. - The Board of Trustees shall have the following
powers and functions:
"(a) to formulate the policies, guidelines and
programs to effectively carry out the purposes of
this Act;
"(b) to promulgate such rules and regulations as
may be necessary or proper for the effective
exercise of the powers and functions as well as
the discharge of the duties and responsibilities of
the GSIS, its officers and employees;
"(c) upon the recommendation of the President
and General Manager, to approve the annual and
supplemental budget of receipts and expenditures
of the GSIS, and to authorize such operating and
capital expenditures and disbursements of the
GSIS as may be necessary or proper for the
effective management, operation and
administration of the GSIS;
"(d) upon the recommendation of the President
and General Manager, to approve the GSIS
organizational and administrative structure and
staffing pattern, and to establish, fix, review,
revise and adjust the appropriate compensation
packages for the officers and employees of the
GSIS and reasonable allowances, incentives,
bonuses, privileges and other benefits as may be
necessary or proper for the effective
management, operation and administration of the
GSIS, which shall be exempt from Republic Act
No. 6758, otherwise known as the Attrition Law;
"(e) to fix and periodically review and adjust the
rates of interest and other terms and conditions
for loans and credits extended to its members or
other persons, whether natural or juridical;
"(f) the provision of any law to the contrary
notwithstanding, to compromise or release, in
whole or in part, any claim or settle liability to the
GSIS, regardless of the amount involved, under
such terms and conditions as it may impose for
the best interest of the GSIS;
"(g) to approve and adopt guidelines affecting
investments, insurance coverage of government
properties, settlement of claims, disposition of
acquired assets, development of housing projects,
increased benefit and loan packages to members,
and the enforcement of the provisions of this Act;
"(h) to determine, fix, and impose interest upon
unpaid or unremitted premiums and/or
contributions; and
"(i) to do and perform any and all acts necessary,
proper or incidental to the attainment of the
purposes and objectives of this Act.
"SEC. 44. Appointment, Qualifications, and Compensation
of the President and General Manager and of other
Personnel. - The President and General Manager of the
GSIS shall be its Chief Executive Officer and shall be
appointed by the President of the Philippines. He shall be
a person with management and investments expertise
necessary for the effective performance of his duties and
functions under this Act.
"The GSIS President and General Manager shall be
assisted by one or more executive vice-presidents, senior
vice-presidents and managers in addition to the usual
supervisory and rank-and-file positions who shall be
appointed and removed by the President and General
Manager with the approval of the Board, in accordance
with the existing Civil Service rules and regulations.
"SEC. 45. Powers and Duties of the President and
General Manager. - The President and General Manager
of the GSIS shall, among others, execute and administer
the policies and resolutions approved by the Board and
direct and supervise the administration and operations of
the GSIS. The President and General Manager, subject to
the approval of the Board, shall appoint the personnel of
the GSIS, remove, suspend or otherwise discipline them
for cause, in accordance with the existing Civil Service
rules and regulations, and prescribe their duties and
qualifications to the end that only competent persons
may be employed.
"SEC. 46. Auditor. - (a) The Chairman of the Commission
on Audit shall be the ex officio auditor of the GSIS, and
the necessary personnel to assist said representative in
the performance of his duties.
"(b) The Chairman of the Commission on Audit or his
authorized representatives, shall submit to the Board
soon after the close of each calendar year, an audited
statement showing the financial condition and progress of
the GSIS for the calendar year just ended.
"SEC. 47. Legal Counsel. - The Government Corporate
Counsel shall be the legal adviser and consultant of the
GSIS, but the GSIS may assign to the Office of the
Government Corporate Counsel (OGCC) cases for legal
action or trial, issues for legal opinions, preparation and
review of contracts/agreements and others, as the GSIS
may decide or determine from time to time: Provided,
however, That the present legal services group in the
GSIS shall serve as its in-house legal counsel.
"The GSIS may, subject to approval by the proper court,
deputize any personnel of the legal service group to act
as special sheriff in the enforcement of writs and
processes issued by the court, quasi-judicial agencies or
administrative bodies in cases involving the GSIS.
"SEC. 48. Powers of the Insurance Commission. - The
Insurance Commissioner or his authorized
representatives shall make an examination of financial
condition and methods of transacting business of the
GSIS at least once every three (3) years and the report
of said examination shall be submitted to the Board of
Trustees and copies thereof be furnished the Office of the
President of the Philippines and the two houses of the
Congress of the Philippines within five (5) days after the
close of examination: Provided, however, That for each
examination, the GSIS shall pay the office of the
Insurance Commissioner an amount equal to the actual
expenses incurred by the said office in the conduct of
examination, including the salaries of the examiners and
of the actuary of such examination for the actual time
spent.
"H. GENERAL PROVISION
"SEC. 49. Dispensation of Social Insurance Benefits. - (a)
The GSIS shall pay the retirement benefits to the
employee on his last day of service in the
government: Provided, That all requirements are
submitted to the GSIS within a reasonable period prior to
the effective date of the retirement;
"(b) The GSIS shall discontinue the processing and
adjudication of retirement claims under R.A. No. 1616
except refund of retirement premium under R. A. No.
910. Instead, all agencies concerned shall process and
pay the gratuities of their employees. The Board shall
adopt the proper rules and procedures for the
implementation of this provision.
"SEC. 50. Development and Disposition of Acquired
Assets. - The GSIS shall have the right to develop and
dispose of its acquired assets obtained in the ordinary
course of its business. To add value to, improve
profitability on, and/or enhance the marketability of an
acquired asset, the GSIS may further develop/renovate
the same either with its own capital or through a joint
venture arrangement with private companies or
individuals.
"The GSIS may sell its acquired assets in accordance with
existing Commission on Audit (COA) rules and
regulations for an amount not lower than the current
market value of the property. For this purpose, the GSIS
shall conduct an annual appraisal of its property or
acquired assets to determine its current market value. All
notices of sale shall be published in newspapers of
general circulation.
"No injunction or restraining order issued by any court,
commission, tribunal or office shall bar, impede or delay
the sale and disposition by the GSIS of its acquired
assets except on questions of ownership and national or
public interest.
"SEC. 51. Government Assistance to the GSIS. - The
GSIS may call upon any employer for such assistance as
may be necessary in the discharge of its duties and
functions.
"I. PENAL PROVISIONS
"SEC. 52. Penalty. - (a) Any person found to have
participated directly or indirectly in the commission of
fraud, collusion, falsification, or misrepresentation in any
transaction with the GSIS, whether for him or for some
other persons, shall suffer the penalties provided for in
Article 172 of the Revised Penal Code.
"(b) Whoever shall obtain or receive any money or check
invoking any provision of this Act or any agreement
thereunder, without being entitled thereto with the intent
to defraud any member, any employer, the GSIS, or any
third party, shall be punished by a fine of not less than
Five thousand pesos (P5,000.00) nor more than Twenty
thousand pesos (P20,000.00) or by imprisonment of not
less than six (6) years and one (1) day to twelve (12)
years, or both, at the discretion of the court.
"(c) Whoever fails or refuses to comply with the
provisions of this Act or with the rules and regulations
adopted by the GSIS, shall be punished by a fine of not
less than Five thousand pesos (P5,000.00) nor more than
Twenty thousand pesos (P20,000.00) or imprisonment of
not less than six (6) years and one (1) day to twelve (12)
years, or both, at the discretion of the court.
"(d) The treasurer, finance officer, cashier, disbursing
officer, budget officer or other official or employee who
fails to include in the annual budget the amount
corresponding to the employer and employee
contributions, or who fails or refuses or delays by more
than thirty (30) days from the time such amount
becomes due and demandable, or to deduct the monthly
contributions of the employee shall, upon conviction by
final judgment, suffer the penalties of imprisonment from
six (6) months and one (1) day to six (6) years, and a
fine of not less than Three thousand pesos (P3,000.00)
but not more than Six thousand pesos (P6,000.00), and
in addition, shall suffer absolute perpetual disqualification
from holding public office and from practicing any
profession or calling licensed by the government.
"(e) Any employee or member who receives or keeps
fund or property belonging, payable or deliverable to the
GSIS and appropriates the same, or takes or
misappropriates or uses the same for any purpose other
than authorized by this Act, or permits another person to
take, misappropriate or use said fund or property by
expressly consenting thereto, or through abandonment or
negligence, or is otherwise guilty of the misappropriation
of said fund or property, in whole or in part, shall suffer
the penalties provided in Article 217 of the Revised Penal
Code, and in addition, shall suffer absolute perpetual
disqualification from holding public office and from
practicing any profession or calling licensed by the
government.
"(f) Any employee who, after deducting the monthly
contribution or loan amortization from a members
compensation, fails to remit the same to the GSIS within
thirty (30) days from the date they should have been
remitted under Section 6(a), shall be presumed to have
misappropriated such contribution or loan amortization
and shall suffer the penalties provided in Article 315 of
the Revised Penal Code, and in addition, shall suffer
absolute perpetual disqualification from holding public
office and from practicing any profession or calling
licensed by the government.
"(g) The heads of the offices of the national government,
its political subdivisions, branches, agencies and
instrumentalities, including government-owned or
controlled corporations and government financial
institutions, and the personnel of such offices who are
involved in the collection of premium contributions, loan
amortization and other accounts due the GSIS who shall
fail, refuse or delay the payment, turnover, remittance or
delivery of such accounts to the GSIS within thirty (30)
days from the time that the same shall have been due
and demandable shall, upon conviction by final judgment,
suffer the penalties of imprisonment of not less than one
(1) year nor more than five (5) years and a fine of not
less than Ten thousand pesos (P10,000.00) nor more
than Twenty thousand pesos (P20,000.00), and in
addition, shall suffer absolute perpetual disqualification
from holding public office and from practicing any
profession or calling licensed by the government.
"(h) The officers and/or personnel referred to in
paragraph (g) of this section shall be liable not only
criminally but also civilly to the GSIS or to the employee
or member concerned in the form of damages, including
surcharges and interests.
"(i) For the charges or complaints referred to in
paragraph (g) of this section, the liabilities therein set
forth shall be construed as waiver of the State of its
immunity from suit, hence, the above-mentioned officials
and/or personnel may not invoke the defense of non-
suability of the State.
"(j) Failure of the Members of the GSIS Board, including
the chairman and the vice-chairman, to comply with the
provisions of paragraph (w) of Section 41 hereof, shall
subject them to imprisonment of not less than six (6)
months nor more than one (1) year or a fine of not less
than Five thousand pesos (P5,000.00) nor more than Ten
thousand pesos (P10,000.00) without prejudice to any
civil or administrative liability which may also arise
therefrom.
"(k) Criminal actions arising from violations of the
provisions of this Act may be commenced by the GSIS or
by the aggrieved member, either under this Act or, in
appropriate cases, under the Revised Penal Code.
"SEC. 53. Implementing Rules and Regulations. - The
implementing rules and regulations to carry out the
provisions of this Act shall be adopted and promulgated
by the GSIS not later than ninety (90) days after the
approval of this Act.
"SEC. 54. Non-impairment of Benefits, Powers,
Jurisdiction, Rights, Privileges, Functions and Activities. -
Nothing in this Act shall be construed to repeal, amend or
limit any provision of existing laws, Presidential Decrees
and Letters of Instructions, not otherwise specifically
inconsistent with the provisions of this Act.
"SEC. 55. Exclusiveness of Benefits. - Whenever other
laws provide similar benefits for the same contingencies
covered by this Act, the member who qualifies to the
benefits shall have the option to choose which benefits
will be paid to him. However, if the benefits provided by
 the law chosen are less than the benefits provided under
this Act, the GSIS shall pay only the difference.

"SEC. 56. Appropriations. - The amount necessary to

carry out the provisions of this Act shall be included in
the respective budgets of the agencies in the national
government obligation program of the year following its
enactment into law and thereafter."
Section 2. Separability Clause. - Should any provision of this
Act or any part thereof be declared invalid, the other provisions,
so far as they are separable from the invalid ones, shall remain
in force and effect.
Section 3. Repealing Clause. - All laws and any other law or
parts of law specifically inconsistent herewith are hereby
repealed or modified accordingly: Provided, That the rights
under the existing laws, rules and regulations vested upon or
acquired by an employee who is already in the service as of the
effectivity of this Act shall remain in force and effect: Provided,
further, That subsequent to the effectivity of this Act, a new
employee or an employee who has previously retired or
separated and is reemployed in the service shall be covered by
the provisions of this Act.
Section 4. Effectivity. - This Act shall take effect fifteen (15)
days after its publication in the Official Gazette or in at least two
(2) newspapers of general circulation.
This Act, which is a consolidation of Senate Bill No. 2013 and
House Bill No. 8561, was finally passed by the Senate and the
House of Representatives on May 29, 1997 and May 28, 1997,
respectively.
Approved: May 30, 1997.
Title II
EMPLOYEES COMPENSATION AND STATE INSURANCE
FUND
Chapter I
POLICY AND DEFINITIONS
Article 166. Policy. The State shall promote and develop a tax-
exempt employees compensation program whereby employees
and their dependents, in the event of work-connected disability
or death, may promptly secure adequate income benefit and
medical related benefits.
Article 167. Definition of terms. As used in this Title, unless the
context indicates otherwise:
"Code" means the Labor Code of the Philippines instituted under
Presidential Decree Numbered four hundred forty-two, as
amended.
"Commission" means the Employees Compensation Commission
created under this Title.
"SSS" means the Social Security System created under Republic
Act Numbered Eleven hundred sixty-one, as amended.
"GSIS" means the Government Service Insurance System
created under Commonwealth Act Numbered One hundred
eighty-six, as amended.
"System" means the SSS or GSIS, as the case may be.

"Employer" means any person, natural or juridical, employing

the services of the employee.
"Employee" means any person compulsorily covered by the
GSIS under Commonwealth Act Numbered One hundred eighty-
six, as amended, including the members of the Armed Forces of
the Philippines, and any person employed as casual, emergency,
temporary, substitute or contractual, or any person compulsorily
covered by the SSS under Republic Act Numbered Eleven
hundred sixty-one, as amended.
"Person" means any individual, partnership, firm, association,
trust, corporation or legal representative thereof.
"Dependent" means the legitimate, legitimated or legally
adopted or acknowledged natural child who is unmarried, not
gainfully employed, and not over twenty-one (21) years of age
or over twenty-one (21) years of age provided he is
incapacitated and incapable of self-support due to a physical or
mental defect which is congenital or acquired during minority;
the legitimate spouse living with the employee and the parents
of said employee wholly dependent upon him for regular
support.
"Beneficiaries" means the dependent spouse until he/she
remarries and dependent children, who are the primary
beneficiaries. In their absence, the dependent parents and
subject to the restrictions imposed on dependent children, the
illegitimate children and legitimate descendants, who are the
secondary beneficiaries: Provided, That the dependent
acknowledged natural child shall be considered as a primary
beneficiary when there are no other dependent children who are
qualified and eligible for monthly income benefit.
"Injury" means any harmful change in the human organism from Philippine Hospital Association and accredited by the
any accident arising out of and in the course of the employment. Commission.
"Sickness" means any illness definitely accepted as an
occupational disease listed by the Commission, or any illness
caused by employment subject to proof that the risk of
contracting the same is increased by working conditions. For this
purpose, the Commission is empowered to determine and
approve occupational diseases and work-related illnesses that
may be considered compensable based on peculiar hazards of
employment.
"Death" means loss of life resulting from injury or sickness.
"Disability" means loss or impairment of a physical or mental
function resulting from injury or sickness.
"Compensation" means all payments made under this Title for
income benefits and medical or related benefits.
"Income benefit" means all payments made under this Title to
the providers of medical care, rehabilitation services and
hospital care.
"Medical benefit" means all payments made under this Title to
the providers of medical care, rehabilitation services and
hospital care.
"Related benefit" means all payments made under this Title for
appliances and supplies.
"Appliances" means crutches, artificial aids and other similar
devices.
"Supplies" means medicine and other medical, dental or surgical
items.
"Hospital" means any medical facility, government or private,
authorized by law, an active member in good standing of the
"Physician" means any doctor of medicine duly licensed to
practice in the Philippines, an active member in good standing of
the Philippine Medical Association and accredited by the
Commission.
"Wages" or "Salary", insofar as they refer to the computation of
benefits defined in Republic Act No. 1161, as amended, for SSS
and Presidential Decree No. 1146, as amended, for GSIS,
respectively, except that part in excess of Three Thousand
Pesos.
"Monthly salary credit" means the wage or salary base for
contributions as provided in Republic Act Numbered Eleven
hundred sixty-one, as amended, or the wages or salary.
"Average monthly salary credit" in the case of the SSS means
the result obtained by dividing the sum of the monthly salary
credits in the sixty-month period immediately following the
semester of death or permanent disability by sixty (60), except
where the month of death or permanent disability falls within
eighteen (18) calendar months from the month of coverage, in
which case, it is the result obtained by dividing the sum of all
monthly salary credits paid prior to the month of contingency by
the total number of calendar months of coverage in the same
period.
"Average daily salary credit" in the case of the SSS means the
result obtained by dividing the sum of the six (6) highest
monthly salary credits in the twelve-month period immediately
preceding the semester of sickness or injury by one hundred
eighty (180), except where the month of injury falls within
twelve (12) calendar months from the first month of coverage,
in which case it is the result obtained by dividing the sum of all
monthly salary credits by thirty (30) times the number of
calendar months of coverage in the period.
In the case of the GSIS, the average daily salary credit shall be
the actual daily salary or wage, or the monthly salary or wage
divided by the actual number of working days of the month of
contingency.
"Quarter" means a period of three (3) consecutive months
ending on the last days of March, June, September and
December.
"Semester" means a period of two consecutive quarters ending
in the quarter of death, permanent disability, injury or sickness.
"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.
"Credited years of service" - For a member covered prior to
January, 1975, nineteen hundred seventy-five minus the
calendar year of coverage, plus the number of calendar years in
which six or more contributions have been paid from January,
1975 up to the calendar year containing the semester prior to
the contingency. For a member covered on 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.
"Monthly income benefit" means the amount equivalent to one
hundred fifteen percent of the sum of 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: Provided, That
the monthly income benefit shall in no case be less than two
hundred fifty pesos.
Chapter II
COVERAGE AND LIABILITY
Article 168. Compulsory coverage. Coverage in the State
Insurance Fund shall be compulsory upon all employers and
their employees not over sixty (60) years of age: Provided, That
an employee who is over (60) years of age and paying
contributions to qualify for the retirement or life insurance
benefit administered by the System shall be subject to
compulsory coverage.
Article 169. Foreign employment. The Commission shall ensure
adequate coverage of Filipino employees employed abroad,
subject to regulations as it may prescribe.
Article 170. Effective date of coverage. Compulsory coverage of shall be delivered to the disabled employee or other persons
the employer during the effectivity of this Title shall take effect entitled thereto, after deducting the cost of proceedings and
on the first day of his operation, and that of the employee, on expenses of the System.
the date of his employment.
Article 175. Deprivation of the benefits. Except as otherwise
Article 171. Registration. Each employer and his employees provided under this Title, no contract, regulation or device
shall register with the System in accordance with its regulations. whatsoever shall operate to deprive the employee or his
dependents of any part of the income benefits and medical or
Article 172. Limitation of liability. The State Insurance Fund related services granted under this Title. Existing medical
shall be liable for compensation to the employee or his services being provided by the employer shall be maintained and
dependents, except when the disability or death was occasioned continued to be enjoyed by their employees.
by the employees intoxication, willful intention to injure or kill
himself or another, notorious negligence, or otherwise provided Chapter III
under this Title. ADMINISTRATION

Article 173. Extent of liability. Unless otherwise provided, the
liability of the State Insurance Fund under this Title shall be
exclusive and in place of all other liabilities of the employer to
the employee, his dependents or anyone otherwise entitled to
receive damages on behalf of the employee or his dependents.
The payment of compensation under this Title shall not bar the
recovery of benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act Numbered Eleven
hundred sixty-one, as amended, Republic Act Numbered Forty-
eight hundred sixty-four as amended, and other laws whose
benefits are administered by the System or by other agencies of
the government. (As amended by Presidential Decree No. 1921).
Article 174. Liability of third party/ies.
When the disability or death is caused by circumstances creating
a legal liability against a third party, the disabled employee or
the dependents, in case of his death, shall be paid by the
System under this Title. In case benefit is paid under this Title,
the System shall be subrogated to the rights of the disabled
employee or the dependents, in case of his death, in accordance
with the general law.
Where the System recovers from such third party damages in
excess of those paid or allowed under this Title, such excess
Article 176. Employees Compensation Commission.
To initiate, rationalize, and coordinate the policies of the
employees compensation program, the Employees
Compensation Commission is hereby created to be composed of
five ex-officio members, namely: the Secretary of Labor and
Employment as Chairman, the GSIS General Manager, the SSS
Administrator, the Chairman of the Philippine Medical Care
Commission, and the Executive Director of the ECC Secretariat,
and two appointive members, one of whom shall represent the
employees and the other, the employers, to be appointed by the
President of the Philippines for a term of six years. The
appointive member shall have at least five years experience in
workmens compensation or social security programs. All
vacancies shall be filled for the unexpired term only. (As
amended by Section 19 [c], Executive Order No. 126)
The Vice Chairman of the Commission shall be alternated each
year between the GSIS General Manager and the SSS
Administrator. The presence of four members shall constitute a
quorum. Each member shall receive a per diem of two hundred
pesos for every meeting that is actually attended by him,
exclusive of actual, ordinary and necessary travel and
representation expenses. In his absence, any member may
designate an official of the institution he serves on full-time
basis as his representative to act in his behalf. (As amended by benefits payable by the System for similar contingencies:
Section 2, Presidential Decree No. 1368) Provided, That the Commission may upgrade benefits and add
new ones subject to approval of the President: and Provided,
The general conduct of the operations and management further, That the actuarial stability of the State Insurance Fund
functions of the GSIS or SSS under this Title shall be vested in shall be guaranteed: Provided, finally, That such increases in
its respective chief executive officers, who shall be immediately benefits shall not require any increases in contribution, except
responsible for carrying out the policies of the Commission. as provided for in paragraph (b) hereof; (As amended by
Section 3, Presidential Decree No. 1641)
The Commission shall have the status and category of a
government corporation, and it is hereby deemed attached to To appoint the personnel of its staff, subject to civil service law
the Department of Labor and Employment for policy coordination and rules, but exempt from WAPCO law and regulations;
and guidance. (As amended by Section 2, Presidential Decree
No. 1368) To adopt annually a budget of expenditures of the Commission
and its staff chargeable against the State Insurance Fund:
Article 177. Powers and duties. The Commission shall have the Provided, That the SSS and GSIS shall advance on a quarterly
following powers and duties: basis, the remittances of allotment of the loading fund for the
Commissions operational expenses based on its annual budget
To assess and fix a rate of contribution from all employers; as duly approved by the Department of Budget and
Management; (As amended by Section 3, Presidential Decree
No. 1921)
To determine the rate of contribution payable by an employer
whose records show a high frequency of work accidents or
occupational diseases due to failure by the said employer to To have the power to administer oath and affirmation, and to
observe adequate safety measures; issue subpoena and subpoena duces tecum in connection with
any question or issue arising from appealed cases under this
Title;
To approve rules and regulations governing the processing of
claims and the settlement of disputes arising therefrom as
prescribed by the System; To sue and be sued in court;

To initiate policies and programs toward adequate occupational
health and safety and accident prevention in the working
environment, rehabilitation other than those provided for under
Article 190 hereof, and other related programs and activities,
and to appropriate funds therefor; (As amended by Section 3,
Presidential Decree No. 1368)
To acquire property, real or personal, which may be necessary
or expedient for the attainment of the purposes of this Title;
To enter into agreements or contracts for such services and as
may be needed for the proper, efficient and stable
administration of the program;

To make the necessary actuarial studies and calculations To perform such other acts as it may deem appropriate for the
concerning the grant of constant help and income benefits for attainment of the purposes of the Commission and proper
permanent disability or death and the rationalization of the enforcement of the provisions of this Title. (As amended by
benefits for permanent disability and death under the Title with Section 18, Presidential Decree No. 850)
Article 178. Management of funds. All revenues collected by
the System under this Title shall be deposited, invested,
administered and disbursed in the same manner and under the
same conditions, requirements and safeguards as provided by
Republic Act Numbered eleven hundred sixty-one, as amended,
with regard to such other funds as are thereunder being paid to
or collected by the SSS and GSIS, respectively: Provided, That
the Commission, SSS and GSIS may disburse each year not
more than twelve percent of the contribution and investment
earnings collected for operational expenses, including
occupational health and safety programs, incidental to the
carrying out of this Title.
Article 179. Investment of funds. Provisions of existing laws to
the contrary notwithstanding, all revenues as are not needed to
meet current operational expenses under this Title shall be
accumulated in a fund to be known as the State Insurance Fund,
which shall be used exclusively for payment of the benefits
under this Title, and no amount thereof shall be used for any
other purpose. All amounts accruing to the State Insurance
Fund, which is hereby established in the SSS and GSIS,
respectively, shall be deposited with any authorized depository
bank approved by the Commission, or invested with due and
prudent regard for the liquidity needs of the System. (As
amended by Section 4, Presidential Decree No. 1368)
Article 180. Settlement of claims. The System shall have
original and exclusive jurisdiction to settle any dispute arising
from this Title with respect to coverage, entitlement to benefits,
collection and payment of contributions and penalties thereon,
or any other matter related thereto, subject to appeal to the
Commission, which shall decide appealed cases within twenty
(20) working days from the submission of the evidence.
Article 181. Review. Decisions, orders or resolutions of the
Commission may be reviewed on certiorari by the Supreme
Court on question of law upon petition of an aggrieved party
within ten (10) days from notice thereof.
Article 182. Enforcement of decisions.
Any decision, order or resolution of the Commission shall
become final and executory if no appeal is taken therefrom
within ten (10) days from notice thereof. All awards granted by
the Commission in cases appealed from decisions of the System
shall be effected within fifteen days from receipt of notice.
In all other cases, decisions, orders and resolutions of the
Commission which have become final and executory shall be
enforced and executed in the same manner as decisions of the
Court of First Instance, and the Commission shall have the
power to issue to the city or provincial sheriff or to the sheriff
whom it may appoint, such writs of execution as may be
necessary for the enforcement of such decisions, orders or
resolutions, and any person who shall fail or refuse to comply
therewith shall, upon application by the Commission, be
punished by the proper court for contempt.
Chapter IV
CONTRIBUTIONS
Article 183. Employers contributions.
Under such regulations as the System may prescribe, beginning
as of the last day of the month when an employees compulsory
coverage takes effect and every month thereafter during his
employment, his employer shall prepare to remit to the System
a contribution equivalent to one percent of his monthly salary
credit.
The rate of contribution shall be reviewed periodically and
subject to the limitations herein provided, may be revised as the
experience in risk, cost of administration and actual or
anticipated as well as unexpected losses, may require.
Contributions under this Title shall be paid in their entirety by
the employer and any contract or device for the deductions of
any portion thereof from the wages or salaries of the employees
shall be null and void.
When a covered employee dies, becomes disabled or is
separated from employment, his employers obligation to pay
the monthly contribution arising from that employment shall
cease at the end of the month of contingency and during such
months that he is not receiving wages or salary.
Article 184. Government guarantee. The Republic of the
Philippines guarantees the benefits prescribed under this Title,
and accepts general responsibility for the solvency of the State
Insurance Fund. In case of any deficiency, the same shall be
covered by supplemental appropriations from the national
government.
Chapter V
MEDICAL BENEFITS
Article 185. Medical services. Immediately after an employee
contracts sickness or sustains an injury, he shall be provided by
the System during the subsequent period of his disability with
such medical services and appliances as the nature of his
sickness or injury and progress of his recovery may require,
subject to the expense limitation prescribed by the Commission.
Article 186. Liability. The System shall have the authority to
choose or order a change of physician, hospital or rehabilitation
facility for the employee, and shall not be liable for
compensation for any aggravation of the employees injury or
sickness resulting from unauthorized changes by the employee
of medical services, appliances, supplies, hospitals, rehabilitation As soon as practicable, the System shall establish centers
facilities or physicians.
Article 187. Attending physician. Any physician attending an
injured or sick employee shall comply with all the regulations of
the System and submit reports in prescribed forms at such time be within its resources, to help each rehabilitee to develop his
as may be required concerning his condition or treatment. All
medical information relevant to the particular injury or sickness
shall, on demand, be made available to the employee or the
System. No information developed in connection with treatment
or examination for which compensation is sought shall be
considered as privileged communication.
Article 188. Refusal of examination or treatment. If the
employee unreasonably refuses to submit to medical
examination or treatment, the System shall stop the payment of
further compensation during such time as such refusal
continues. What constitutes an unreasonable refusal shall be
determined by the System which may, on its own initiative,
determine the necessity, character and sufficiency of any
medical services furnished or to be furnished.
Article 189. Fees and other charges. All fees and other charges
for hospital services, medical care and appliances, including
professional fees, shall not be higher than those prevailing in
wards of hospitals for similar services to injured or sick persons
in general and shall be subject to the regulations of the
Commission. Professional fees shall only be appreciably higher
than those prescribed under Republic Act Numbered sixty-one
hundred eleven, as amended, otherwise known as the Philippine
Medical Care Act of 1969.
Article 190. Rehabilitation services.
The System shall, as soon as practicable, establish a continuing
program, for the rehabilitation of injured and handicapped
employees who shall be entitled to rehabilitation services, which
shall consist of medical, surgical or hospital treatment, including
appliances if they have been handicapped by the injury, to help
them become physically independent.
equipped and staffed to provide a balanced program of remedial
treatment, vocational assessment and preparation designed to
meet the individual needs of each handicapped employee to
restore him to suitable employment, including assistance as may
mental, vocational or social potential.
Chapter VI
DISABILITY BENEFITS
Article 191. Temporary total disability.
Under such regulations as the Commission may approve, any
employee under this Title who sustains an injury or contracts
sickness resulting in temporary total disability shall, for each day
of such a disability or fraction thereof, be paid by the System an
income benefit equivalent to ninety percent of his average daily
salary credit, subject to the following conditions: the daily
income benefit shall not be less than Ten Pesos nor more than
Ninety Pesos, nor paid for a continuous period longer than one
hundred twenty days, except as otherwise provided for in the
Rules, and the System shall be notified of the injury or sickness.
(As amended by Section 2, Executive Order No. 179)
Temporary total disability lasting continuously for more than one
hundred twenty days, except as otherwise provided for in the
Rules;
Complete loss of sight of both eyes;
Loss of two limbs at or above the ankle or wrist;
Permanent complete paralysis of two limbs;
Brain injury resulting in incurable imbecility or insanity; and
Such cases as determined by the Medical Director of the System
and approved by the Commission.
The number of months of paid coverage shall be defined and
approximated by a formula to be approved by the Commission.

The payment of such income benefit shall be in accordance with Article 193. Permanent partial disability.
the regulations of the Commission. (As amended by Section 19,
Presidential Decree No. 850) Under such regulations as the Commission may approve, any
employee under this Title who contracts sickness or sustains an
Article 192. Permanent total disability. injury resulting in permanent partial disability shall, for each
month not exceeding the period designated herein, be paid by
Under such regulations as the Commission may approve, any the System during such a disability an income benefit for
employee under this Title who contracts sickness or sustains an permanent total disability.
injury resulting in his permanent total disability shall, for each
month until his death, be paid by the System during such a The benefit shall be paid for not more than the period
disability, an amount equivalent to the monthly income benefit, designated in the following schedules:
plus ten percent thereof for each dependent child, but not
exceeding five, beginning with the youngest and without Complete and permanent No. of Months
substitution: Provided, That the monthly income benefit shall be loss of the use of
the new amount of the monthly benefit for all covered One thumb - 10
pensioners, effective upon approval of this Decree. One index finger - 8
One middle finger - 6
The monthly income benefit shall be guaranteed for five years, One ring finger - 5
and shall be suspended if the employee is gainfully employed, or One little finger - 3
recovers from his permanent total disability, or fails to present One big toe - 6
himself for examination at least once a year upon notice by the One toe - 3
System, except as otherwise provided for in other laws, decrees, One arm - 50
orders or Letters of Instructions. (As amended by Section 5, One hand - 39
Presidential Decree No. 1641) One foot - 31
One leg - 46
The following disabilities shall be deemed total and permanent: One ear - 10
Both ears - 20
Hearing of one ear - 10
Hearing of both ears - 50
Sight of one eye - 25
A loss of a wrist shall be considered as a loss of the hand, and a
loss of an elbow shall be considered as a loss of the arm. A loss
of an ankle shall be considered as loss of a foot, and a loss of a
knee shall be considered as a loss of the leg. A loss of more than
one joint shall be considered as a loss of one-half of the whole
finger or toe: Provided, That such a loss shall be either the
functional loss of the use or physical loss of the member. (As
amended by Section 7, Presidential Decree No. 1368)
In case of permanent partial disability less than the total loss of
the member specified in the preceding paragraph, the same
monthly income benefit shall be paid for a portion of the period
established for the total loss of the member in accordance with
the proportion that the partial loss bears to the total loss. If the
result is a decimal fraction, the same shall be rounded off to the
next higher integer.
In cases of simultaneous loss of more than one member or a
part thereof as specified in this Article, the same monthly
income benefit shall be paid for a period equivalent to the sum
of the periods established for the loss of the member or the part
thereof. If the result is a decimal fraction, the same shall be
rounded off to the next higher integer.
In cases of injuries or illnesses resulting in a permanent partial
disability not listed in the preceding schedule, the benefit shall
be an income benefit equivalent to the percentage of the
permanent loss of the capacity to work. (As added by Section 7,
Presidential Decree No. 1368)
Under such regulations as the Commission may approve, the
income benefit payable in case of permanent partial disability
may be paid in monthly pension or in lump sum if the period
covered does not exceed one year. (As added by Section 7,
Presidential Decree No. 1368)
Chapter VII
DEATH BENEFITS
Article 194. Death.
Under such regulations as the Commission may approve, the
System shall pay to the primary beneficiaries upon the death of
the covered employee under this Title, an amount equivalent to
his monthly income benefit, plus ten percent thereof for each
dependent child, but not exceeding five, beginning with the
youngest and without substitution, except as provided for in
paragraph (j) of Article 167 hereof: Provided, however, That the
monthly income benefit shall be guaranteed for five years:
Provided, further, That if he has no primary beneficiary, the
System shall pay to his secondary beneficiaries the monthly
income benefit but not to exceed sixty months: Provided, finally,
That the minimum death benefit shall not be less than fifteen
thousand pesos. (As amended by Section 4, Presidential Decree
No. 1921)
Under such regulations as the Commission may approve, the
System shall pay to the primary beneficiaries upon the death of
a covered employee who is under permanent total disability
under this Title, eighty percent of the monthly income benefit
and his dependents to the dependents pension: Provided, That
the marriage must have been validly subsisting at the time of
disability: Provided, further, That if he has no primary
beneficiary, the System shall pay to his secondary beneficiaries
the monthly pension excluding the dependents pension, of the
remaining balance of the five-year guaranteed period: Provided,
finally, That the minimum death benefit shall not be less than
fifteen thousand pesos. (As amended by Section 4, Presidential
Decree No. 1921)
The monthly income benefit provided herein shall be the new
amount of the monthly income benefit for the surviving
beneficiaries upon the approval of this decree. (As amended by
Section 8, Presidential Decree No. 1368)
Funeral benefit. - A funeral benefit of Three thousand pesos
(P3,000.00) shall be paid upon the death of a covered employee
or permanently totally disabled pensioner. (As amended by
Section 3, Executive Order No. 179)
Chapter VIII
PROVISIONS COMMON TO INCOME BENEFITS
Article 195. Relationship and dependency. All questions of
relationship and dependency shall be determined as of the time
of death.
Article 196. Delinquent contributions.
An employer who is delinquent in his contributions shall be liable
to the System for the benefits which may have been paid by the
System to his employees or their dependents, and any benefit
and expenses to which such employer is liable shall constitute a
lien on all his property, real or personal, which is hereby
declared to be preferred to any credit, except taxes. The
payment by the employer of the lump sum equivalent of such
liability shall absolve him from the payment of the delinquent
contribution and penalty thereon with respect to the employee
concerned.
Failure or refusal of the employer to pay or remit the
contribution herein prescribed shall not prejudice the right of the
employee or his dependents to the benefits under this Title. If
the sickness, injury, disability or death occurs before the System
receives any report of the name of his employee, the employer
shall be liable to the System for the lump sum equivalent to the
benefits to which such employee or his dependents may be
entitled.
Article 197. Second injuries. If any employee under permanent
partial disability suffers another injury which results in a
compensable disability greater than the previous injury, the
State Insurance Fund shall be liable for the income benefit of the If the System in good faith pays income benefit to a dependent
new disability: Provided, That if the new disability is related to who is inferior in right to another dependent or with whom
the previous disability, the System shall be liable only for the
difference in income benefits.
Article 198. Assignment of benefits. No claim for compensation
under this Title is transferable or liable to tax, attachment,
garnishment, levy or seizure by or under any legal process
whatsoever, either before or after receipt by the person or
persons entitled thereto, except to pay any debt of the
employee to the System.
Article 199. Earned benefits. Income benefits shall, with
respect to any period of disability, be payable in accordance with
this Title to an employee who is entitled to receive wages,
salaries or allowances for holidays, vacation or sick leaves and
any other award of benefit under a collective bargaining or other
agreement.
Article 200. Safety devices. In case the employees injury or
death was due to the failure of the employer to comply with any
law or to install and maintain safety devices or to take other
precautions for the prevention of injury, said employer shall pay
the State Insurance Fund a penalty of twenty-five percent
(25%) of the lump sum equivalent of the income benefit payable
by the System to the employee. All employers, specially those
who should have been paying a rate of contribution higher than
required of them under this Title, are enjoined to undertake and
strengthen measures for the occupational health and safety of
their employees.
Article 201. Prescriptive period. No claim for compensation
shall be given due course unless said claim is filed with the
System within three (3) years from the time the cause of action
accrued. (As amended by Section 5, Presidential Decree No.
1921)
Article 202. Erroneous payment.
another dependent is entitled to share, such payments shall
discharge the System from liability, unless and until such other
dependent notifies the System of his claim prior to the
payments.
In case of doubt as to the respective rights of rival claimants,
the System is hereby empowered to determine as to whom
payments should be made in accordance with such regulations
as the Commission may approve. If the money is payable to a
minor or incompetent, payment shall be made by the System to
such person or persons as it may consider to be best qualified to
take care and dispose of the minors or incompetents property
for his benefit.
Article 203. Prohibition. No agent, attorney or other person
pursuing or in charge of the preparation or filing of any claim for
benefit under this Title shall demand or charge for his services
any fee, and any stipulation to the contrary shall be null and
void. The retention or deduction of any amount from any benefit
granted under this Title for the payment of fees for such services
is prohibited. Violation of any provision of this Article 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.
Article 204. Exemption from levy, tax, etc. All laws to the
contrary notwithstanding, the State Insurance Fund and all its
assets shall be exempt from any tax, fee, charge, levy, or
customs or import duty and no law hereafter enacted shall apply Article 206. Notice of sickness, injury or death. Notice of
to the State Insurance Fund unless it is provided therein that the sickness, injury or death shall be given to the employer by the
same is applicable by expressly stating its name.
Chapter IX
RECORDS, REPORTS AND PENAL PROVISIONS
Article 205. Record of death or disability.
All employers shall keep a logbook to record chronologically the
sickness, injury or death of their employees, setting forth
therein their names, dates and places of the contingency, nature
of the contingency and absences. Entries in the logbook shall be
made within five days from notice or knowledge of the
occurrence of the contingency. Within five days after entry in
the logbook, the employer shall report to the System only those
contingencies he deems to be work-connected.
All entries in the employers logbook shall be made by the
employer or any of his authorized official after verification of the
contingencies or the employees absences for a period of a day
or more. Upon request by the System, the employer shall
furnish the necessary certificate regarding information about any
contingency appearing in the logbook, citing the entry number,
page number and date. Such logbook shall be made available for
inspection to the duly authorized representative of the System.
Should any employer fail to record in the logbook an actual
sickness, injury or death of any of his employees within the
period prescribed herein, give false information or withhold
material information already in his possession, he shall be held
liable for fifty percent of the lump sum equivalent of the income
benefit to which the employee may be found to be entitled, the
payment of which shall accrue to the State Insurance Fund.
In case of payment of benefits for any claim which is later
determined to be fraudulent and the employer is found to be a
party to the fraud, such employer shall reimburse the System
the full amount of the compensation paid.
employee or by his dependents or anybody on his behalf within
five days from the occurrence of the contingency. No notice to
the employer shall be required if the contingency is known to
the employer or his agents or representatives.
Article 207. Penal provisions.
The penal provisions of Republic Act Numbered Eleven Hundred
Sixty-One, as amended, and Commonwealth Act Numbered One
Hundred Eighty-Six, as amended, with regard to the funds as
are thereunder being paid to, collected or disbursed by the [May 1, 1978] and subsequently amended by Section 7,
System, shall be applicable to the collection, administration and Presidential Decree No. 1641)
disbursement of the Funds under this Title. The penal provisions
on coverage shall also be applicable.

Any person who, for the purpose of securing entitlement to any

benefit or payment under this Title, or the issuance of any
certificate or document for any purpose connected with this
Title, whether for him or for some other person, commits fraud,
collusion, falsification, misrepresentation of facts or any other
kind of anomaly, shall be punished with a fine of not less than
five hundred pesos nor more than five thousand pesos and an
imprisonment for not less than six months nor more than one
year, at the discretion of the court.

If the act penalized by this Article is committed by any person

who has been or is employed by the Commission or System, or
a recidivist, the imprisonment shall not be less than one year; if
committed by a lawyer, physician or other professional, he shall,
in addition to the penalty prescribed herein, be disqualified from
the practice of his profession; and if committed by any official,
employee or personnel of the Commission, System or any
government agency, he shall, in addition to the penalty
prescribed herein, be dismissed with prejudice to re-
employment in the government service.

Article 208. Applicability. This Title shall apply only to injury,

sickness, disability or death occurring on or after January 1,
1975.

Article 208-A. Repeal. All existing laws, Presidential Decrees

and Letters of Instructions which are inconsistent with or
contrary to this Decree, are hereby repealed: Provided, That in
the case of the GSIS, conditions for entitlement to benefits shall
be governed by the Labor Code, as amended: Provided,
however, That the formulas for computation of benefits, as well
as the contribution base, shall be those provided under
Commonwealth Act Numbered One Hundred Eighty-Six, as
amended by Presidential Decree No. 1146, plus twenty percent
thereof. (As added by Section 9, Presidential Decree No. 1368