Law Summary

Background

• Authority: The Social Security Commission is authorized under Republic Act No. 1161, as amended, to increase benefits and add new ones, ensuring the solvency of the Reserve Fund and without raising contributions.
• Necessity: Upgrading benefit structures for low-income groups is essential to align with the evolving Social Security System Reserve Fund.
• Employer Penalties: Employers failing to remit contributions face a 3% monthly penalty, which can exceed the original due amount.

Amendments to Provisions

Section 1: Monthly Pension

• Provision: The monthly pension shall not be less than two hundred pesos and shall be paid in an aggregate amount of at least sixty times the monthly pension, except for secondary beneficiaries.
• Key Points:
  • Minimum pension set at ₱200.
  • Aggregate payments to be no less than ₱12,000 for primary beneficiaries.

Section 2: Funeral Benefit

• Provision: A funeral grant of ₱1,500 will be provided for funeral expenses upon the death of a covered member, permanently totally disabled employee, or retiree.
• Key Points:
  • Funeral grant amount established at ₱1,500.

Section 3: Sickness Benefit

• Provision: Employees with at least three monthly contributions in the preceding twelve months before sickness are eligible for benefits.
• Details:
  • Daily allowance of 90% of the average daily salary credit for compensable confinement.
  • Minimum daily allowance set at ₱4, maximum at ₱25.
  • Maximum of 120 days of compensable sickness benefits per calendar year.
  • Unused days cannot be carried over to subsequent years.

Section 4: Remission of Contributions

• Provision: Employers who have not remitted contributions can do so within six months from the issuance of this Executive Order without incurring the 3% penalty.
• Key Points:
  • Six-month grace period for remittance of contributions.
  • Failure to remit within this period results in the immediate imposition of the 3% penalty from the original due date.

General Provisions

• Repeals: Any conflicting laws, orders, rules, and regulations are repealed or modified accordingly.
• Effectivity: The Executive Order takes effect immediately, with the benefit increases starting on August 1, 1986.

Key Takeaways

• The Executive Order amends specific provisions of the Social Security Law, enhancing benefits for pensions, funeral expenses, and sickness.
• Employers are granted a six-month grace period for contribution remittance without penalties.
• Clear minimum and maximum thresholds for benefits are established, ensuring support for covered members and their beneficiaries.
• Compliance with these amendments is crucial for employers to avoid penalties and ensure their employees receive due benefits.