Section 2
SECTION 2. Paragraphs (a), (c) and (d) of Section 8 of Republic Act No. 1181 are hereby amended and paragraphs (q) and (r) are added thereto to read as follows: "SEC. 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. "(c) Employer—Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity or any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivision, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed professional shall be both employee and employer at the same time. "(d) Employee—Any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship; Provided, That a self-employed professional shall be both employee and employer at the same time. "(q) Replacement ratio.—The sum of twenty percent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average monthly salary credit. "(r) Credited years of service.—For a member covered prior to January 1975, nineteen hundred and seventy five minus the calendar years of coverage plus the number of calendar years in which six or more contributions have been paid from January 1975 up to the calendar years containing the semester prior to the contingency. For a member covered in or after January 1975, the number of calendar years in which six or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency."