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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Overseas Filipino Workers (OFWs), also known as “Migrant Workers”, refer to those who are engaged or have been engaged in a compensated activity in a state where they are not legal residents. Under the Social Security Act of 2018, all sea-based and land-based OFWs – who are not over sixty (60) years old – must make “compulsory” or mandated or required contributions to the SSS.
On August 27, 2024, the Social Security System (SSS) and the Department of Migrant Workers (DMW) entered into a Memorandum of Understanding (MOU), where both institutions agreed to promote the benefits of SSS membership to overseas Filipino workers (OFWs).
In a press brief, DMW Secretary Hans Leo J. Cacdac had explained the importance of SSS to OFWs, saying:
Many Filipinos working abroad prefer to retire here in the Philippines after spending a significant portion of their productive years overseas. Unfortunately, when they return home, they may not be eligible for a monthly pension because they overlooked their SSS contributions.
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We need to start building the future already for OFWs who are currently there — the 2-million-marker as I like to call them. So, they will have a nest egg so to speak, when they retire. (Daily Guardian, 2024)
In this article, some basics on the SSS contributions of OFWs are simplified and demystified.
Who are overseas Filipino workers or OFWs?
Under the Migrant Workers and Overseas Filipinos Act of 1995, the term “overseas Filipino worker” (OFW) is interchangeable with “migrant worker”, and both refer to a person who is engaged or has been engaged in a compensated activity in a state where he or she is not a legal resident.
(Sec. 3, Republic Act No. 8042, as amended)
What kind of contributions do OFWs make under the SSS?
Under the Social Security Act of 2018, all sea-based and land-based OFWs – who are not over sixty (60) years old – must make “compulsory” or mandated or required contributions to the SSS.
Furthermore:
a. Manning agents are considered as “employers” of sea-based OFWs, since they are agents of their principals.
Thus, manning agencies are solidarily liable with their principals when it comes to paying any civil liabilities which arise from violating the Social Security Act.
The persons having direct control, management or direction of the manning agencies shall be held criminally liable for any act or omission penalized under this Act
b. Land-based OFWs are compulsory members of the SSS and are considered as “sel-employed persons.”
c. Upon the termination of their employment overseas, OFWs may continue to pay contributions on a “voluntary basis” so that they may maintain their rights to full benefits under the SSS.
d. Filipino permanent migrants, permanent residents and naturalized citizens of their host countries may be covered by the SSS on a “voluntary basis.”
For OFWs covered under a “bilateral labor agreement” or social security agreements with other foreign countries:
- The Department of Foreign Affairs (DFA), the Department of Labor and Employment (DOLE) and all its agencies involved in deploying OFWs for employment abroad are mandated to negotiate bilateral labor agreements with the OFWs’ host countries to ensure that the employers of land-Overseas Filipino Workers (OFWs), also known as “Migrant Workers”, refer to those who are engaged or have been engaged in a compensated activity in a state where they are not legal residents. Under the Social Security Act of 2018, all sea-based and land-based OFWs – who are not over sixty (60) years old – must make “compulsory” or mandated or required contributions to the SSS.
- When this is the case, these land-based OFWs will no longer be considered as “self-employed persons.”
Instead, they shall be considered as “compulsorily covered employees” with employer and employee shares in contributions.
- The DFA, the DOLE and the SSS shall ensure compulsory coverage of OFWs through bilateral social security and labor agreements and other measures for enforcement.
(Sec.9-B, Republic Act No. 11199)
RELATED ARTICLES:
- Briefer on the List of Documentary Requirements for Retirement Benefit under SSS Circular No. 2020-010
- The Supreme Court decides: Surviving Spouse is entitled to SSS Pension even if the marriage was contracted after the spouse’s disability. (Belinda D.R. Dolera v. Social Security System, G.R. No. 253940, October 24, 2023)
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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