Published — April 18, 2021
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: Imprisonment for non-remittance of SSS, Pag-IBIG and PhilHealth contributions
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When an employee under compulsory coverage is separated from employment, his/her employer’s contributions on his/her account and his/her obligation to pay the contributions of his/her employees shall cease at the end of the month of separation.
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The separated employee shall be credited with all contributions paid on his/her behalf.
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The separated employee may continue to pay his/her contributions voluntarily to maintain his/her right to full benefit.
When an employee under compulsory coverage is separated from employment, employer’s contribution on his account and employer’s obligation to pay cease at the end of the month of separation.
Under the Implementing Rules and Regulations of Republic Act No. 11199 or The Social Security Act of 2018:
When an employee under compulsory coverage is separated from employment, his/her employer’s contributions on his/her account and his/her obligation to pay the contributions of his/her employees shall cease at the end of the month of separation.
The separated employee shall be credited with all contributions paid on his/her behalf and is entitled to the social security benefits in accordance with issued guidelines and the provisions of the Social Security Act of 2018.
The separated employee may continue to pay his/her contributions voluntarily to maintain his/her right to full benefit subject to the following guidelines:
- If the coverage as Voluntary Member (VM) is for the first time, he/she shall have the option to choose any Monthly Salary Credit (MSC) from the existing contributions schedule, regardless of age and last posted MSC prior to becoming a VM;
- Membership type of covered employee, self-employed or Overseas Filipino Worker (OFW) may be changed to VM by indicating voluntary as payor type in the contribution payment form. Such change in membership type upon payment of contribution shall be deemed as member’s declaration that he/she ceased to be employed, self-employed or OFW and that he/she realized no income or earnings either as employee, self-employed or OFW for the period for which the voluntary contribution/s was/were paid;
- A member who is sixty (60) years old and above but not yet sixty-five (65) with one hundred twenty (120) monthly contributions or more may continue paying as VM up to 65 years old. On the other hand, a member who is 65 years old and above with less than 120 monthly contributions may continue paying contributions as VM until he/she completes 120 monthly contributions;
- The guidelines on the revision and consolidation of coverage and contribution collection policies for self-employed and VM below 55 years old including OFWs and non-working (NW) spouses, shall continue to apply subject to Section 33 of the Social Security Act of 2018, as follows:
- A VM shall be allowed to change his/her MSC to a MSC higher or lower than the one indicated in his/her registration form depending on actual realization of earnings without having to present any proof thereof. Said contribution shall be deemed as the new declaration of earnings and shall be the basis in determining compliance with the allowable change in succeeding MSC;
- A VM who is below 55 years old shall be allowed to change his/her MSC without limit in frequency and in number of salary brackets in a given calendar year, but in no case shall it be lower than the prevailing minimum MSC. Submission of written request or declaration of earnings is not required.
- A VM who is 55 years old and above shall be allowed to increase his/her MSC only once in a given calendar year and by one (1) salary bracket only from the last posted MSC, regardless of whether proof of earnings is presented or not, except for the following cases whereby certain rules shall apply accordingly:
- In case of a change in his/her membership type from employed/self-employed/OFW-member to voluntary for the first time, he/she shall be allowed to increase his/her MSC without limit and without having to present proof of earnings; and
- In case of a higher maximum MSC under a new applicable schedule of contributions, he/she shall be allowed to increase his/her MSC up to the new maximum MSC, without having to present proof of earnings, provided that his/her last posted MSC corresponds to the maximum MSC under the immediately preceding schedule of contributions. The corresponding MSC of the first contribution in the above cases shall be the basis in determining compliance with the allowable change in succeeding MSC. No limit shall be imposed in case of decrease in MSC, but in no case shall it be lower than the prevailing minimum MSC.
- A VM may opt to pay his/her monthly contributions in advance regardless of the number of months or years. However, he/she shall be required to settle underpayment/s in the future that result from any policy change affecting the applicable schedule and the rate of contributions for the advance payments made;
- A VM shall pay his/her contribution in accordance with the guidelines on payment deadline applicable to self-employed members.
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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