FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED ELEVEN HUNDRED AND SIXTY-ONE, OTHERWISE KNOWN AS "THE SOCIAL SECURITY LAW," AS AMENDED

• Number: Presidential Decree No. 177
• Sections: 10

Preamble

WHEREAS, on the 19th day of October, 1972, Presidential

Decree No. 24, amended certain Sections of Republic Act No. 1161, as

amended, otherwise known as "The Social Security Law"; and

WHEREAS, in order to bring about a more effective

implementation of the law and make the SSS even more responsive to the

needs of its members, it is necessary to further amend the Social

Security Law;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers in me vested by the Constitution as

Commander-in-Chief of all the Armed Forces of the Philippines, and

pursuant to Proclamation No. 1081, dated September 21, 1972, and General

Order No. 1, dated September 22, 1972, as amended, do hereby order and

decree that the Social Security Law be amended to bring about a more

effective implementation of the law and make the Social Security System

more responsive to the needs of its members as follows:

Section 1

SECTION 1. Section 8(k) of the Social Security Law, as

amended, is hereby further amended to read as follows:

"(k) Beneficiaries. — Those designated as such by the

covered employee from among the following:

"The legitimate spouse, the legitimate, legitimated,

acknowledged natural children, natural children by legal fiction, and

other illegitimate children, and their legitimate descendants, and the

legitimate parents.

"In the absence of any of the foregoing, any other person

designated by him."

Section 2

SEC. 2. Section 9 of the same Act is hereby further amended

by designating the present provision as paragraph (a) and adding

thereto paragraph (b) to read as follows:

"SEC. 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 than 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 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.

"(B) Filipinos recruited in the Philippines by foreign-based

employers for employment abroad may be covered by the SSS on a voluntary

basis under such rules and regulations as the Commission may

prescribe."

Section 3

SEC. 3. Section 12 (a) and (c) are hereby further amended

to read as follows:

"SEC. 12. Retirement benefits. — (a) A covered

employee who (3) has paid at least one hundred twenty monthly

contributions to the SSS, has reached the age of sixty years and is

separated from employment or, if still employed, is receiving less than

two hundred fifty pesos monthly compensation, or (2) has paid at least

one hundred twenty monthly contributions and has reached the age of

sixty-five years, or (3) has paid at least thirty-six monthly

contributions and has become permanently totally disabled, shall be

entitled for as long as he lives but in no case for less than five years

to a monthly pension amount to be computed as follows:

Forty-five percent of the first three hundred pesos of the

average monthly salary credit or fraction thereof; plus

Twenty-five percent of the next three hundred pesos of the

average monthly salary credit or fraction thereof; plus

Nine percent of each succeeding one hundred pesos of the

average monthly salary credit or fraction thereof; plus

One-tenth of one percent of the average monthly salary credit

for each monthly contribution in excess of one hundred twenty and paid

as of the last day of the second quarter preceding the quarter of

retirement: Provided, That a member of the SSS covered prior to

June 18, 1962 and who was fifty years of age or over on the date of his

coverage shall be entitled to the benefits hereunder if he has paid a

number of monthly contributions equivalent to the number of calendar

months of coverage at age sixty, but in no case less than twenty-four: Provided,

further. That the monthly pension shall in no case be less than

forty-five pesos: Provided, finally, That the foregoing

schedule shall take effect on January 1, 1974.

"(c) The monthly pension shall be suspended —

Upon the re-employment of a retired employee who is less

than sixty-five years old if he receives from his employment a monthly

compensation of two hundred fifty pesos or more; or

Upon the recovery of an employee retired due to permanent

total disability, or his failure to present himself for examination at

least once a year upon notice by the SSS."

Section 4

SEC. 4. Section 13 of the same Act is further amended to

read as follows:

"SEC. 13. Death and permanent disability benefits.

— (a) Upon the covered employee's death, his beneficiaries shall be

entitled to the basic lump sum amount, plus five-twelfths of one percent

of the basic lump sum amount for each monthly contribution in excess of

one hundred twenty and paid as of the last day of the second quarter

preceding the quarter of death: Provided, That any of the

following conditions is satisfied at the time of death:

"1. He shall have paid eighteen monthly contributions within

the thirty-six calendar month period ending on the last day of the

second quarter preceding the quarter of death.

"2. His payment ratio is not less than eighty percent."

"Provided, further, That if none of the foregoing

conditions are satisfied, his death benefit shall be the above amount

multiplied by one and one-fourth times his payment ratio: Provided,

finally, That the death benefit shall not be less than the total

contributions paid by him and his employer in his behalf to the SSS nor

less than five hundred pesos: Provided, however, That the covered

employee who dies in the month of coverage shall be entitled to the

minimum benefit."

Section 5

SEC. 5. Section 14(b) of the same Act is further amended to

read as follows:

"(b) The payment of such allowances shall be promptly made by

the employer every regular pay day or on the fifteenth and last day of

each month in the case of direct payment by the SSS for as long as such

allowances are due and payable: Provided, That such allowance

shall begin only after all current sick leaves of absence with full pay,

if any, to the credit of the employer shall have been exhausted."

Section 6

SEC. 6. Section 22(e) of the same Act is further amended

to read as follows:

"(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 (6) months from approval of this amendatory Act

remit said contributions to the SSS and submit corresponding collection

lists therefor without incurring the prescribed three percent penalty.

In case the employer, fails to remit to the SSS the said contributions

within the six months grace period, the penalty of three percent shall

be imposed from the time the contributions first became due as provided

in paragraph (a) of this Section: Provided, however, That the

administrator, may in meritorious cases, allow employers who have

submitted a payment plan, on or before April 19, 1973, to pay their

contributions due and payable up to December 31, 1973 without incurring

the prescribed three percent penalty."

Section 7

SEC. 7. Section 26(g) of the same Act is further amended to

read as follows:

"(g) As part of its investment operations the SSS shall act as

insurer of all or part of its interests on properties mortgaged to the

SSS or on the lives of mortgagors whose properties arc mortgaged to the

SSS in accordance with such rules and regulations prescribed by the

Social Security Commission. 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.

"The SSS may insure any of its interests or part thereof with

any private company or reinsurer.

"The Insurance Commission or its authorized representatives

shall make an examination into the financial condition and methods of

business transactions 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 SSC 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.

"The general law on insurance promulgated thereunder shall have

suppletory application insofar as it is not in conflict with the SSS Law

and its rules and regulations."

Section 8

SEC. 8. Section 28(a) and (e) are hereby further amended to

read as follows:

"SEC. 28. Penal Clause. — (a) Whoever, for the

purpose of causing any payment to be made under this Act, or under an

agreement thereunder, where none is authorized to be paid, shall make or

cause to be made false statement or representation as to any

compensation paid or received, or whoever makes or causes to be made any

false statement of a material fact in any claim for any benefit payable

under this Act or application for loan with the SSS, or whoever makes

or causes to be made any false statement, representation, affidavit, or

document, in connection with such claim shall suffer the penalties

provided for in Article One Hundred Seventy-Two of the Revised Penal

Code."

"(e) Whoever fails or refuses to comply with the provisions of

this Act or with the rules and regulations promulgated by the

Commission, shall be punished by a fine of not less than five hundred

pesos nor more than five thousand pesos or imprisonment for not less

than six months nor more than one year, or both at the discretion of the

court: Provided, That, where the violation consists in failure

or refusal to register employees, or to deduct contributions from

employee's compensation and remit the same to the SSS, the penalty shall

be a fine of not les than five hundred pesos nor more than five

thousand pesos and imprisonment for not less than six months nor more

than one year."

Section 9

SEC. 9. This Decree shall form part of the law of the land

and shall take effect immediately.

Done in the City of Manila,

this 23rd day of April, in the year of Our Lord, nineteen hundred and

seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ROBERTO V. REYES

Assistant Executive Secretary