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Republic of the Philippines ENED
HOUSE OF REPRESENTATIVES| DATE:
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SEVENTEENTH CONGRESS
First Regular Session

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House BillNo.__ 340

HOUSE 9F REPRESENTATIVES

Introduced by AKBAYAN Representative Tomasito S. Villarin

EXPLANATORY NOTE

Private sector workers are protected against the hazards of disability,
sickness, maternity, old-age, death, and other contingencies resulting in
loss of income or financial burden through the government managed Social
Security System.

However, not all workers are covered under the SSS even as universal
coverage of the employed and the self-employed among private workers, is
mandated under Republic Act No. 8282 or the Social Security Act of 1997.
The SSS is a contributory system that provides financial protection and
benefits to members who regularly pay monthly contributions, including
benefits such as funeral, death, disability, retirement, work injury and
maternity benefits.

Social security contributions, small as they are compared to the protection
and potential benefits afforded to members, still present a huge financial
challenge to the working poor and the near poor workers.

While the financial burden on the employed is borne partly by the
employer's contribution of about two-thirds of total SSS contributions, the
self-employed have to pay for the entire contribution! Thus suffice to say,
the self-employed who mostly are the working poor and the near poor
workers do not have the full financial capacity to pay for their SS
contributions. It is thus, not surprising that a vast disparity between the
effective SSS coverage of the employed and the self-employed exists. Based
on the SSS Facts and Figures as of December 2015, there are 9,814,900
paying members who are employed but only 978,842 paying members who
are self-employed out of approximately 20 million employed private workers
and 12 million self-employed private workers.! Furthermore, the average
contribution level and the average contribution frequency of the self-
employed are lower than that of the employed.

1 Labor and Employment Statistics as of October 2015.


For the working poor or those workers whose monthly incomes are above
the subsistence line but below the poverty line and the near poor or those
workers whose monthly incomes are marginally above the poverty line, the
SSS may spell the difference between recovering from a contigency and
falling into absolute poverty.

‘This bill aims to relieve the financial burden of self-employed workers who
are working poor and near poor with regard to their membership in SSS by
prescribing government counterpart contributions.

This bill also addresses the gap in government poverty eradication programs
which are currently focused on social assistance for the poorest of the poor.
Preventive measures like this proposal will avert new Filipino families from
joining the ranks of the poor that can diminish or even nullify the positive
effects of the poverty eradication programs of the government.

TO! ITO S. VILLARIN


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No,__ 340

Introduced by AKBAYAN Representative Tomasito S. Villarin

AN ACT
PROVIDING FOR ENHANCED SOCIAL PROTECTION
FOR THE WORKING POOR AND THE NEAR POOR
AND PROVIDING FOR THE FUND THEREFOR

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

ARTICLE I
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “Working
Poor Protection Act of 2016”.

SECTION 2. Declaration of Policies. - The State shall uplift the
standard of living and quality of life of all Filipinos. Towards this end, the
government shall undertake a comprehensive approach to poverty
eradication that will consists of multi-layered programs which address the
specific needs of the near poor, the working poor, and the poorest of the
poor.

The State affirms its commitment to the millennium development
goals and sustainable development goals, and adheres to international
standards on working conditions and social protection floors. Specifically,
the government shall provide assistance in order that the near poor and the
working poor can enjoy the benefit of meaningful social protection against
the hazards of disability, sickness, maternity, old-age, death, and other
contingencies resulting in the loss of income or financial burden.

SECTION 3. Definition of Terms. - As used in this Act, the
following terms are hereby defined:

a) social protection refers to programs of the government aimed to

1


protect workers against contingencies resulting in loss of income or financial
burden.

b) working poor shall refer to a worker with an average monthly
income that is not sufficient to place a typical Filipino household above the
poverty line as defined by the Philippine Statistics Authority or such other
government agencies mandated to prepare the official poverty statistics of
the country.

c) near poor shall refer to a worker with an average monthly income
that is sufficient to place a typical Filipino household above, by no more
than 20%, the poverty line as defined by the Philippine Statistics Authority
or such other government agencies mandated to prepare the official poverty
statistics of the country.

ARTICLE IL
ENHANCED SOCIAL PROTECTION
FOR SELF-EMPLOYED WORKERS

SECTION 4. Enhanced Social Protection for the Working Poor. -
All workers, whether employed or self-employed, shall be covered by the
Social Security System (SSS), the Employee's Compensation (EC) Fund, the
Philippine Health Insurance Corporation (Philhealth), and the Home
Development Mutual Fund (Pag-IBIG) and they shall be entitled to all the
benefits in accordance with the pertinent provisions provided by law.

A self-employed working poor who has a monthly income that is at
least P2,750 but less than P9,250 shall be entitled to a counterpart
government contribution for every valid monthly contribution to the SSS
and the EC Fund based on the following schedule:

Range of income Monthly EC SSS SSS
salary credit | contribution | contribution | contribution
(Msc) _| SE's share | SE's share | Govt's share
P2,750 ~ P3,249.99 P3,000| _100.00%| 33 1/3%| 66 2/3%
P3,250 — P3,749.99 P3,500|  100.00%|  426/7%| 57 1/7%
P3,750 — P4,249.99 P4,000|  100.00%| 50.00%] _50.00%|
P4,250 — P4,749.99 P4,500|  100.00%| 555/9%|  444/9%
P4,750 ~ P5,249.99 P5,000| _ 100.00%| 60.00% 40.00%
P5,250 - P5,749.99 P5,500|  100.00%| 63 7/11%| 36 4/11%
P5,750 — P6,249.99 P6,000| __100.00%| 66 2/3%| 33 1/3%
P6,250 ~ P6,749.99 P6,500| _ 100.00%| 69 3/13%| 30 10/13%
P6,750 - P7,249.99 P7,000| _100.00%| __713/7%| 28 4/7%
P7,250-P7,749.99 | __P7,500| _100.00%| 73 1/3%| 26 2/3%



P7,750 — P8,249.99 P8,000 100.00% 75.00%, 25.00%|
P8,250 — P8,749.99 P8,500 100.00%| 768/17%| 23 9/17%|

Provided, That contributions from government and the working poor
shall be subject to review by the ECC and the SSS, taking into consideration
poverty thresholds provided by the Philippine Statistics Authority not later
than five (5) years after the effectivity fo this Act and every six (6) years
thereafter.

SECTION 5. Government Contribution. - The government
contribution shall be paid only upon payment of the contribution by the
working poor, subject to the schedule of payment prepared and prescribed
by the SSS.

ARTICLE Ill
ADMINISTRATION AND FUNDING

SECTION 6. Social Protection Fund. - A Social Protection Fund is
hereby established under the budget of the SSS. This fund shall be used
solely for the purpose of this Act and may not be used for other social
protection programs of the government. This fund will be sourced from the
following:

a) ten percent (10%) of the share of the national government in all
lotteries conducted by the Philippine Charity Sweepstakes Office;

b) ten percent (10%) of the share of the natonal government in the
earnings of the Philippine Amusement and Gaming Corporation; and

c)ten percent (10%) of the eighty percent (80%) of the remaining balance
of the incremental revenue derived from Republic Act No. 10351
allocated for the universal health care under the National Health
Insurance Program, the attainment of the millennium development
goals and health awareness programs.

SECTION 7. Administration of the Fund. - The Social Protection
Fund shall be administered by the SSS as a separate and distinct fund from
the SSS Investment Reserve Fund. The government contributions provided
for under this Act shall be drawn from the fund.

SECTION 8. Responsibilities of the SSS. - The SSS shall have the
following responsibilities:

a) administer the Social Protection Fund, including the preparation of an
annual financial report;

b) device systems and procedures for the timely computation of

a


aggregate government contributions; and
c) undertake coverage campaigns among the working poor.

SECTION 9. Identification of the Working Poor. - On a nationwide
basis, the government shall select the working poor using a standardized
targeting system and shall verify their monthly average income. ‘The
government shall conduct a revalidation of this slection every three (3) years.

ARTICLE IV
MISCELLANEOUS PROVISIONS

SECTION 10. Transitory Provision. - Section 4 of this Act shall be
implemented in the beginning of the year following the approval of this Act.

SECTION 11. Implementing Rules and Regulations. - Within six
(6) months from the effectivity of this Act, the Lead Convenor of the National
Anti-Poverty Commission, in coordination with the Secretary of Labor and
Employment, the President and Chief Executive Officer of the Social Security
System, and the Executive Director of the Employee's Compensation
Commission shall promulgate the necessary rules and regulations for the
effective implementation of this Act.

ARTICLE V
FINAL PROVISIONS

SECTION 11. Separability Clause. - If any provision of this Act is
subsequently declared invalid or unconstitutional, other provisions hereof
which are not affected thereby shall remain in full force and effect.

SECTION 13. Repealing Clause. - All laws, acts, presidential
decrees, executive orders, issuances, presidential proclamations, rules and
regulations or parts thereof which are contrary to and inconsistent with any
provision of this Act are hereby repealed, amended or modified accordingly.

SECTION 15. Effectivity Clause. - This Act shall take effect fifteen

(15) days after its complete publication in the Official Gazette or in at least
two (2) national newspapers of general circulation.

Approved,