Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 891)
The main objective of Presidential Decree No. 891 is to further amend Title II, Book Four on "Employees Compensation and State Insurance Fund" of Presidential Decree No. 442 (Labor Code of the Philippines) to provide adequate and meaningful benefits for employment-related disabilities and death, while ensuring the financial viability of the State Insurance Fund.
For SSS members, 'average monthly salary credit' is the result of dividing the sum of the monthly salary credits in the sixty-month period immediately preceding the semester of death or permanent disability by sixty. If the death or disability falls within eighteen months from the month of coverage, it is the sum of all monthly salary credits paid divided by the total number of calendar months of coverage.
For GSIS members, the average monthly salary credit is the actual monthly salary or wage of the employee on the month of the contingency.
A 'semester' means a period of two consecutive quarters ending in the quarter of death, permanent disability, injury, or sickness.
An employee who sustains an injury or illness resulting in temporary total disability shall be paid by the System an income benefit equivalent to 90% of his average daily salary credit for each day of such disability, provided that the daily income benefit shall not be less than 2.50 pesos nor more than 16 pesos, and shall not be paid for more than 120 continuous days.
The monthly income benefit is 115% of the basic benefit, computed as 45% of the first 300 pesos of average monthly salary credit, plus 25% of the next 300 pesos, plus 9% of each succeeding 100 pesos, plus 0.1% of the average monthly salary credit for each month of paid coverage in excess of 120 months. The monthly benefit shall not be less than 45 pesos and is paid for up to five years or until death.
Primary beneficiaries receive a monthly income benefit equivalent to the monthly income benefit for permanent total disability plus 10% of the basic benefit for each dependent child (up to five children), paid for no more than five years. The total payments shall not exceed 12,000 pesos, and the permanent total disability portion is guaranteed for five years.
If there is no primary beneficiary, the System shall pay secondary beneficiaries a lump sum benefit equivalent to the lesser of 35 times the monthly income benefit for permanent total disability or 6,000 pesos.
For covered employees already under permanent total disability who die, the primary beneficiaries will receive the monthly income benefit plus 10% of the basic benefit for each dependent child, not beyond the remaining guaranteed period, with total payments not exceeding 12,000 pesos. If no primary beneficiary exists, secondary beneficiaries receive a lump sum benefit based on the balance of income benefit subject to specified limits.
The decree took effect immediately upon its signing on February 9, 1976, and it repeals all provisions of existing laws, orders, decrees, rules, and regulations inconsistent with its provisions.