Declaration of Policy
- Establish a tax-exempt social security system.
- Provide protection against disability, sickness, maternity, old age, death, and income loss.
- Extend coverage to workers and their beneficiaries.
Creation and Structure of the Social Security System (SSS)
- SSS established as a corporate body with principal place in Metro Manila.
- Governed by a Social Security Commission composed of 10 members including Secretary of Labor, SSS president, workers', employers' representatives, and a public member.
- Terms for appointive members are three years with per diem and allowances.
- SSS President is the CEO, appointed by the President of the Philippines, with prescribed qualifications.
- Commission appoints actuary and personnel; civil service rules apply except for certain ranks.
- SSS exempted from Republic Acts No. 6758 and 7430.
Powers and Duties of the Commission
- Adopt and amend rules with Presidential approval.
- Establish and maintain Provident Funds for members and employees.
- Approve restructuring proposals for contributions and loans.
- Authorize cooperatives and associations as collecting agents.
- Compromise or release interest, penalties related to investments.
- Oversee all SSS actions and approve policies.
Powers and Duties of the SSS
- Submit annual public report covering activities and recommendations.
- Require actuarial valuation every four years; ensure actuarial soundness.
- Establish offices nationwide and inspect periodically.
- Enter into contracts for services.
- Adopt budget and set accounting system.
- Collect data and conduct investigations.
- Acquire and dispose of property for SSS purposes.
- Undertake housing projects, maintain hospitals and schools.
- Sue or be sued and perform corporate acts for enforcement.
Settlement of Disputes
- SSS Commission to hear and decide disputes within 20 days after evidence submission.
- Appeals allowed to Court of Appeals or Supreme Court within 15 days.
- Decisions become final if not appealed within 15 days.
- Execution of decisions enforceable via writ of execution; noncompliance punishable by contempt.
Auditor and Counsel
- Commission on Audit Chairman as ex-officio auditor.
- Secretary of Justice as ex-officio legal counsel.
Oaths, Witnesses, and Production of Records
- Authorized SSS officials may administer oaths, take depositions, and issue subpoenas.
- Commission handles cases of contumacy.
Definitions of Key Terms
- Employer, Employee, Dependents, Compensation, Contribution, Member, Beneficiaries, Contingency, etc.
- Clarify scope and application of terms for proper coverage and benefits.
Coverage
- Compulsory coverage for all employees under 60 and their employers.
- Domestic helpers included if income not less than P1,000 monthly.
- Integration with existing private benefit plans allowed without reducing benefits.
- Voluntary coverage for certain spouses and Filipinos employed abroad.
Compulsory Coverage of Self-employed
- Certain self-employed professions are covered including professionals, single proprietors, performers, athletes, farmers, fishermen.
- Provisions for self-employed similar to employees.
Effectivity of Coverage
- Employer coverage effective first day of operation.
- Employee coverage effective day of employment.
- Self-employed coverage effective upon registration.
Effect of Separation from Employment
- Employer contributions cease end of month of separation.
- Employee retains credit for contributions paid and benefits.
- Option to continue contributions for full benefits.
Effect of Interruption of Business or Income
- No contributions required if self-employed member has no income in a month.
- Option to continue paying contributions; no retroactive payments except as allowed.
Monthly and Dependents’ Pensions
- Monthly pension computed based on salary, credited years, and fixed minimums.
- Dependents’ pension paid for qualifying children; legal order of preference applies.
Retirement Benefits
- Eligibility based on age and paid contributions.
- Option to receive lump sum payment for first 18 months of pension.
- Suspension of pension on reemployment.
- Benefits for beneficiaries upon death.
Death and Disability Benefits
- Death benefits payable to beneficiaries based on contributions paid.
- Permanent total disability entitles member to pension; lesser contributions yield lump sums.
- Suspension and resumption conditions clearly stated.
- Detailed schedule and computation for permanent partial disabilities.
Funeral Benefit
- Fixed funeral grant of P12,000 to assist with expenses on death of members or retirees.
Sickness and Maternity Leave Benefits
- Sickness benefit payable subject to contribution and confinement requirements.
- Employer advances payments; reimbursement by SSS.
- Maternity benefit payable to female members meeting contribution requirements; conditions for notification and reimbursement.
Non-transferability of Benefits
- Benefits payable only to entitled persons.
- Restrictions on power of attorney for collection.
- Payments to legal heirs if no qualified beneficiaries.
Tax Exemptions and Immunities
- SSS funds, properties, and benefits exempt from taxes and legal processes.
- Protection against attachments and liens except to settle debts to SSS.
Restrictions on Fees for Claim Preparation
- Prohibition on agents or attorneys charging fees for benefit claims except Philippine Bar members with capped attorney’s fees.
- Penalties for violations include fines and imprisonment.
Contributions and Remittance
- Employer and employee contributions based on salary brackets.
- Employer remits contributions monthly with penalties for delinquency.
- Self-employed pay both shares based on declared earnings; Commission may reduce for lower income.
- Government contribution and financial support.
Government Guarantee
- Government assures solvency of SSS and guarantees benefits.
Reporting and Employment Records
- Employers must report employee data promptly.
- Liability for damages if employers fail to report or remit contributions.
- Strict confidentiality rules for records.
- Annual submission of employment registers and reports required.
- Local government units require SSS compliance for business permits.
Funds Management and Investments
- Funds deposited and managed as public special funds.
- Limits set for administrative expenses.
- Reserve Fund and Investment Reserve Fund established.
- Detailed investment guidelines promoting safety, yield, and liquidity in government securities, infrastructure, real estate, corporate bonds, mutual funds, and others.
- Limits on types and percentages of investments.
- Appointment of fund managers authorized.
Mortgagor Insurance Account
- SSS may insure interests on mortgaged properties.
- Separate account for insurance operations with independent assets and liabilities.
- Subject to regulation and examination by Insurance Commission.
Penal Provisions
- Penalties for false claims, fraud, misuse or alteration of contribution devices, failure to comply with the law.
- Fines and imprisonment apply.
- Liability extends to corporate officers.
- Penalties for misappropriation by SSS employees.
- Classification of offenses and venue rules specified.
Government Aid and Transitory Provisions
- SSS membership does not preclude other government assistance.
- Six-month grace period for delinquent employers to remit contributions without penalties.
- Provisions for installment payments within one year.
- Penalties apply if conditions not met after grace period.
Separability, Repealing, and Effectivity Clauses
- Invalid provisions do not affect other parts of the Act.
- Repeals inconsistent laws and rules.
- Effective 15 days after publication in official gazette or newspapers.
This comprehensive summary covers the key statutory provisions, structure, benefits, coverage, penalties, administration, funding and investment mechanisms, and procedural rules essential to understanding and applying the Social Security Act of 1997 in the Philippines.