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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:
Republic Act No. 7699 (The Act Instituting Limited Portability Scheme in the Social Security Insurance Systems by Totalizing the Workers’ Creditable Services or Contributions in each of the Systems) was enacted to institute the Limited Portability Scheme for the totalization and portability of social security benefits.
A covered worker who transfers employment from one sector to another or is employed in both sectors shall have his creditable services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized for the purposes of old age, disability, survivorship, and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization. (Section 3, R.A. No. 7699)
A covered worker who transfers employment from one sector to another or is employed in both sectors shall have his creditable services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized for the purposes of old age, disability, survivorship, and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization.
The law says:
“Provisions of any general or special law or rules and regulations to the contrary notwithstanding, a covered worker who transfers employment from one sector to another or is employed in both sectors shall have his credible services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization: Provided, however, That overlapping periods of membership shall be credited only once for purposes of totalization.” (Section 3, R.A. No. 7699)
What does the term portability mean?
The law says:
“Portability” shall refer to the transfer of funds for the account and benefit of a worker who transfers from one system to the other. (Section 2(b), R.A. No. 7699)
What is meant by the term totalization?
The law says:
“Totalization” shall refer to the process of adding up the periods of creditable services or contributions under each of the Systems, for purposes of eligibility and computation of benefits. (Section 2(e), R.A. No. 7699)
What are overlapping periods for purposes of the Limited Portability Law?
The law says:
“Overlapping periods” shall refer to the periods during which a worker simultaneously contributes to both Systems. (Section 1(i), Rule III, IRR of R.A. No. 7699)
Creditable Services for the Public Sector
The Implementing Rules and Regulations to the Limited Portability Law provides that:
“The following shall be considered as creditable services:
- All previous services with compensation or salary rendered by elective officials;
- The period during which an official or employee was on authorized sick leave of absence without pay not exceeding one year;
- All previous services rendered by an official or employee pursuant to an appointment whether permanent, provisional or temporary;
- All previous services rendered by an official or employee pursuant to a duly approved appointment to a position in the Civil Service with compensation or salary; and
- The period during which an official or employee was out of the service as a result of illegal termination of his service as finally decided by the proper authorities.” (Section 1(f), Rule III, IRR of R.A. No. 7699)
Period of Contribution for the Private Sector
The law says:
“For the private sector, the periods of contribution shall refer to the periods during which a person renders services for an employer with compensation or salary and during which contributions were paid to SSS. For the purpose of this Section, a self-employed person shall be considered an employee and employer at the same time.” (Section 1(g), Rule III, IRR of R.A. No. 7699)
The creditable services or contributions in both Systems shall be credited to their service or contribution record in each of the systems, and totalized for purposes of old age, disability, survivorship and other benefits in case the covered member does not qualify for SSS or GSIS benefits without totalization. (Section 3, R.A. No. 7699)
Principle of Proportionality of Benefits
Benefits to be paid by the system shall be in proportion to the number of contributions actually remitted to that system. All contributions paid by such member personally, and those that were paid by his employers to both systems (SSS and GSIS) shall be considered in the processing of benefits which he can claim from either or both systems. (Section 4, R.A. No. 7699)
Related article: PAYMENT OF SSS AND GSIS CONTRIBUTIONS BY THE SAME PERSON AT THE SAME TIME
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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