Notable Changes on The Social Security System of The Philippines By The Enactment Of Republic Act No. 11199, Also Known as The New Social Security Law Of 2018, amending Republic Act No. 8282

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Published — February 27, 2019

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.

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.

Read also: Understanding SSS and its benefits

The President recently signed into law a new Social Security Law, Republic Act No. 11199 amending Republic Act No. 8282.  The new law on Social Security System provides some new provisions particularly the following:

1.In the new SS Law, Section 8, (j) (1) of R.A. No. 11199, the term Employment now includes as an exception those with no employer-employee relationship to wit:

“(j) Employment- Any service performed by an employee for his employer except:

(1) Services where there is no employer-employee relationship in accordance with existing labor laws, rules, regulations and jurisprudence”.

Significance: This new provision sets the record straight that when there is no employer-employee relationship, the member could declare himself as a voluntary member. Also, the provision in the old law, including in the exception (a) employment which is purely casual and not for the purpose of occupation or business of employer and (b) service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines is now deleted.

2. SECTION 9-B adding Overseas Filipino Workers to Compulsory Coverage. The new law provides:

“Coverage in the SSS shall be compulsory upon all sea-based and land-based OFWs as defined under Republic Act No.  8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022: Provided, That, they are not over sixty (60) years of age.

All benefit provisions under this Act shall apply to all covered OFWs. The benefits include, among others, retirement, death, disability, funeral, sickness and maternity.

Manning agencies are agents of their principals and are considered as employers of sea-based OFWs.

For purposes of the implementation of this Act, any law to the contrary notwithstanding manning agencies are jointly and severally or solidarily liable with their principals with respect to the civil liabilities incurred for any violation of this Act.

The persons having directs control, management or direction of the manning agencies shall be held criminally liable for any act or omission penalized under this Act notwithstanding Section 28(f) hereof

Land-based OFWs are compulsory members of the SSS and considered in the same manner as self-employed persons under such rules and regulations that the Commission shall prescribe”.

“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 agreement with the OFWs’ host countries to ensure that the employers of the land-based OFWs, similar to the principals of sea-based OFWs, pay the required SSS contributions, in which case these land-based OFWs shall no longer be considered in the same manner as self-employed person in the Act. Instead, they shall be considered as compulsorily covered employees with employer and employee shares in the contributions that shall be provided for in the bilateral labor agreements and their implementing administrative agreements: Provided, That, in countries which already extend social security coverage to OFWs, the DFA through the Philippine embassies and the DOLE shall negotiate further agreements to serve the best interests of the OFWs.

The DFA, the DOLE, and the SSS shall ensure compulsory coverage of the OFWs through bilateral social security and labor agreements and other measures for enforcement.

Upon the termination of their employment overseas, OFWs may continue to pay contributions on a voluntary basis to maintain their rights to full benefits.

Filipino permanent migrants, including Filipino immigrants, permanent residents and naturalized citizens of their host countries may be covered by the SSS on a voluntary basis”.

Significance: In the old SSS Law, there was no provision requiring OFWs to be covered compulsorily in the SSS. There is a difference between sea-based OFW and land-based OFW.

For sea-based OFWs, the manning agency which is considered as an agent of the principal employer of said OFWs will be considered as if the employer of the sea-based OFWs for the purpose of paying for the contributions of the sea-based OFWs. This is to ensure that said OFWs will be covered by SSS and can avail of its benefits to further their welfare.

For land-based OFWs, they are considered as self-employed persons and shall pay their contributions voluntarily.

The Department of Foreign Affairs (DFA) and the Department of Labor and Employment (DOLE) and all its agencies will be helping SSS in its mandate to ensure the social security of OFWs and as such the DFA and DOLE is mandated to negotiate bilateral agreements with countries where the primary consideration is to ensure that OFWs will have social security either secured abroad or locally, in the Philippines, but bearing in mind that those offered abroad should be equivalent or more than what is given in the Philippines.

3. SECTION 14-B which provides for Unemployment Insurance or Involuntary Separation Benefits. The new law provides for another benefit that can be availed of a member to wit:

“A member who is not over sixty (60) years of age who has paid at least thirty-six (36) months contributions twelve (12) months of which should be in the eighteen-month period immediately preceding the involuntary unemployment or separation shall be paid benefits in the form of monthly cash payments equivalent to fifty percent (50%) of the average monthly salary credit for a maximum of two (2) months: Provided, That an employee who is involuntarily unemployed can only claim unemployment benefits once every three (3) years: Provided, further, That in case of concurrence of two or more compensable contingencies, only the highest benefit shall be paid, subject to the rules and regulations that the Commission may prescribe”.

Significance: Those who were recently unemployed, involuntarily or separated from work, can avail of this unemployment insurance or involuntary separation benefits provided that the qualifications have been met. In summary:

1. The member is not over sixty (60) years of age; and
2. Has paid at least thirty-six (36) months contributions twelve (12) months of which should be in the eighteen-month period immediately preceding the involuntary unemployment or separation.

It must be noted that it can only be availed of once every three (3) years provided that the abovementioned qualifications have been met.

This is very helpful for those who find themselves suddenly and involuntarily unemployed in order for them to still afford the basic needs.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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