The Philippine Social Security System provides compulsory insurance coverage for citizens of the Philippines.
The Philippine Social Security System provides compulsory insurance coverage for citizens of the Philippines.

The Philippine Social Security System was created in 1972. Republic Act No. 1161, which is known as Social Security Law, outlines the requirements and benefits associated with the program. The administrative body that collects and manages contributions and disperses benefits is called the Social Security System, and it is based in Manila. All employees and self-employed workers who earn more than 1,800 Philippine pesos per year must pay monthly contributions to the system.

Maternity

A woman may claim maternity benefits for a birth or miscarriage. She must notify her employer or the Social Security System if she is self-employed, of her pregnancy. When the birth occurs, she receives 100 percent of her average daily salary multiplied by the number of days for which she will receive the benefit. For a normal birth or a miscarriage, she receives 60 days’ pay. For a caesarean section, she will be paid for 78 days of leave. Average daily salary is calculated over the 12-month period before the semester in which the employee claims the benefit. A semester is a period of six consecutive months that ends in March, June, September or December. For example, if the event that triggers the benefit occurs in June, then the semester is from January to June. The period over which average earnings are calculated is the preceding January to December. Add the six highest monthly salaries during this period, and divide the result by 180. This is the average daily salary. To receive benefits, the employee must have paid into the Social Security System for three of the 12 months of the calculation period.

Sickness

An employee who falls ill may use the Social Security System’s sickness benefits if he has used up all of his sick time that is allowed by his employer. To qualify for this benefit, the worker must be unable to work for more than four days. He must notify his employer within five days of the onset of his inability to work, and the employer must notify the Social Security System within five days of receiving notification from the employee. For each day of illness, the employer must pay the employee 90 percent of his average daily earnings. The Social Security System reimburses the employer for this pay. If the sick person is self-employed, he must notify the Social Security System directly, and he will receive payments directly from them. He does not need to notify the System if he is in the hospital. Sickness benefits are available for up to 120 days per year, and no more than 240 days for the same condition.

Retirement

Philippine retirement benefits may be claimed by members of the system who are unemployed and 60 years old or older, are 65 or older regardless of employment status, or are 55 or older and have worked in underground mines for five years. If a retiree has not paid 120 monthly contributions to the Social Security System, then he will receive a lump sum payment of all of his contributions, his employer’s contributions on his behalf, and the accumulated interest. If a retiree has made 120 payments or more over the course of his lifetime, then he will receive a monthly benefit payment for the rest of his life. The amount of the monthly payment depends on the amount of his contributions to the system. He may receive additional pay for up to five dependent minor children. Retirees who will be paid monthly may choose to receive a lump sum in lieu of the first 18 months of payment. If a retiree who is receiving monthly payments and is under the age of 65 begins working again, his benefits are suspended until he stops working again or reaches the age of 65.

Disability

The Social Security System pays benefits for partial and total disabilities. A worker is eligible for monthly disability benefits if he has made 36 or more monthly contributions to the Social Security System. Workers who have a lower number of contributions will receive a lump sum disability payment. Monthly pensions are based on the number of years that the employee has worked. Lump sums are calculated by multiplying the monthly pension that the employee would have received had he made the necessary number of contributions by the number of contributions that the employee has made or 12, whichever is higher. For partial disability, this number is multiplied by the percentage of whole-body function that the disability impairs, as determined by the Social Security System. Permanent partial and permanent total disabilities are enumerated in the Philippine Social Security Law. For disabilities that fall outside of the list in Social Security Law, a medical assessment must find that the employee has at least 20 percent impairment below normal levels of function. The employee must report for medical assessment annually.

Death

The Social Security System pays death benefits to the beneficiaries of the deceased. If the deceased made 36 or more contributions to the System, the beneficiaries receive a monthly pension that is based on the level and number of contributions, with credits for the surviving dependent children. If the deceased made fewer payments, then the beneficiaries receive a lump sum that is the monthly pension that they would have received multiplied by the number of contributions that were made or 12, whichever is higher. The primary beneficiaries are the dependent spouse and children under 21. Illegitimate children will receive 50 percent of the benefit if there are fewer than five legitimate children. If there are no legitimate children, then illegitimate children will receive 100 percent of the benefits. If the deceased had no primary beneficiaries, then the benefits will be paid to his dependent parents--the secondary beneficiaries. If he had no secondary beneficiaries, then benefits will be paid to a party specified in his will.