‘> receive >)
Receive
§ we 07 5 Pom)

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" Congress
Third Regular Session

HOUSE BILL No. 6104

Introduced by Honorable EVELINA G. ESCUDERO

EXPLANATORY NOTE

Republic Act No. 1161, as amended, or the Social Security Law, needs to be further
amended if only to equip the Social Security Commission with the prerogatives to address the
issues that presently beset the Social Security System or the SSS.

The proposed measure under consideration seeks to amend Sections 4, 18 and 22 of the
Social Security Law, as amended, thereby granting the Social Security Commission the power
of condonation, and the determination of monthly salary credits, the schedule and rate of
contributions, and the rate of penalty for deliquent contributions and unpaid loan amortizations.

It is submitted that with these amendments, the SSS may be given the flexibility and
prerogative to enhance collection of contributions, especially deliquent ones, and be in
consonance with the demands of a viable social security system given the changes brought
about by social, economic and other pertinent indicators.

Consequently, this bill is respectfully submitted for consideration and approval.

Gutied

C~ EVELINA G. ESCUDERO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

16" Congress
Third Regular Session

House BILL No, 6104

Introduced by Honorable EVELINA G. ESCUDERO-

AN ACT.
AUTHORIZING THE SOCIAL SECURITY COMMISSION TO CONDONE PENALTIES
ON DELINQUENT CONTRIBUTIONS AND TO DETERMINE THE MONTHLY SALARY
CREDITS, THE SCHEDULE AND RATE OF CONTRIBUTIONS AND THE RATE OF
PENALTY ON DELINQUENT CONTRIBUTIONS AND UNPAID LOAN AMORTIZATIONS,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE.
KNOWN AS THE SOCIAL SECURITY LAW.

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

SECTION 1. Section 4 of Republic Act No. 1161, as amended, otherwise known
as the “Social Security Law”, is hereby further amended to read as follows:

"SEC. 4. Powers and Duties of the Commission and SSS. ~ (a) The Commission.
- For the attainment of its main objectives as set forth in Section 2 hereof, the
Commission shall have the following powers and duties:

"(1) To adopt, amend and rescind, subject to the approval of the President of
the Philippines, such rules and regulations as may be necessary to carry out the
provisions and purposes of this Act;

"(2) To establish a provident fund for the members which will consist of
voluntary contributions of employers and/or employees, self -employed and
voluntary members and their earnings, for the payment of benefits to such
members or their beneficiaries, subject to such rules and regulations as it may
promulgate and approved by the President of the Philippines;

"(3) To maintain a Provident Fund which consists of contributions made by
both the SSS and its officials and employees and their earnings, for the payment of
benefits to such officials and employees or their heirs under such terms and
conditions as it may prescribe;


"(4) To approve restructuring proposals for the payment of due but unremitted
contributions and unpaid loan amortizations under such terms and conditions as
it may prescribe;

"(5) To authorize cooperatives registered with the cooperative development
authority or associations registered with the appropriate government agency to
act as collecting agents of the SSS with respect to their members: Provided, That
the SSS shall accredit the cooperative or association: Provided, further, That the
persons authorized to collect are bonded;

"(6) To compromise or release, in whole or in part, any interest, penalty or any
civil liability to SSS in connection with the investments authorized under Section
26, hereof, under such terms and conditions as it may prescribe and approved by
the President of the Philippines;[and]

(7) ANY PROVISIONS OF LAW TO THE CONTRARY
NOTWITHSTANDING, TO CONDONE, COMPROMISE OR
RELEASE, IN WHOLE OR IN PART, SUCH PENALTIES IMPOSED
UPON DELINQUENT SOCIAL SECURITY CONTRIBUTIONS
REGARDLESS OF THE AMOUNT INVOLVED UNDER SUCH VALID
TERMS AND CONDITIONS IT MAY PRESCRIBE SUCH AS WHEN
THE FINANCIAL POSITION OF THE EMPLOYER DEMONSTRATES,
BY CLEAR AND CONVINCING EVIDENCE, INABILITY TO PAY
THE ASSESSED DELINQUENCY AND THERE IS INDISPUTABLE
GOOD FAITH ON THE PART OF THE EMPLOYER OF SUCH
INABILITY TO PAY. THE IMPLEMENTING RULES AND
REGULATIONS TO CARRY OUT THIS PROVISION SHALL BE
ADOPTED AND PROMULGATED BY THE COMMISSION NOT
LATER THAN NINETY (90) DAYS AFTER THE APPROVAL OF THIS
ACT.

THE COMMISSION SHALL SUBMIT TO BOTH THE SENATE AND THE
HOUSE OF REPRESENTATIVES, AN ANNUAL REPORT ON THE
EXERCISE OF THE POWERS UNDER THIS SECTION, STATING THEREIN,
AMONG OTHERS, THE FOLLOWING: 1) NAMES AND ADDRESSES OF
EMPLOYERS WHOSE PENALTY DELINQUENCIES HAVE BEEN THE
SUBJECT OF COMPROMISE OR CONDONATION; 2) AMOUNT
INVOLVED; 3) AMOUNT COMPROMISED OR CONDONED; AND 4) THE
REASON/S FOR THE EXERCISE OF POWER TO DETERMINE THAT SAID
POWERS ARE REASONABLY EXERCISED AND THAT THE SSS IS NOT
UNDULY DEPRIVED OF REVENUES.

(8) TO DETERMINE AND FIX FROM TIME TO TIME THROUGH
RULES AND REGULATIONS, THE MINIMUM AND MAXIMUM
MONTHLY SALARY CREDITS, THE SCHEDULE AND THE RATE OF
CONTRIBUTIONS, THE RATE OF PENALTY ON DUE BUT
UNREMITTED CONTRIBUTIONS AND UNPAID LOAN


AMORTIZATIONS TAKING INTO CONSIDERATION ACTUARIAL
CALCULATIONS, RATE OF BENEFITS, INFLATION AND OTHER
RELEVANT SOCIO-ECONOMIC DATA; AND

"[()\9)To approve, confirm, pass upon or review any and all actions of the SSS
in the proper and necessary exercise of its powers and duties hereinafter
enumerated.

"(b) The Social Security System - Subject to the provision of Section four (4),
paragraph{seven (7) hereof|(A), SUB-PARAGRAPH NINE (9) HEREOF, the
SSS shall have the following powers and duties:

"(1) To submit annually not later than April 30, a public report to the President
of the Philippines and to the Congress of the Philippines covering its activities in
the administration and enforcement of this Act during the preceding year
including information and recommendations on broad policies for the
development and perfection of the program of the SSS.

"(2) To require the actuary to submit a valuation report on the SSS benefit
program every four (4) years, or more frequently as may be necessary, to
undertake the necessary actuarial studies and calculations concerning increases in
benefits taking into account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years, including the
addition of new ones, under such rules and regulations as the Commission may
adopt, subject to the approval of the President of the Philippines: Provided, That
the actuarial soundness of the reserve fund shall be guaranteed: Provided, further,
That such increases in benefits shall not require any increase in the rate of
contribution;

"(3) To establish offices of the SSS to cover as many provinces, cities and
congressional districts, whenever and wherever it may be expedient, necessary
and feasible, and to inspect or cause to be inspected periodically such offices;

"(4) To enter into agreements or contracts for such service and aid, as may be
needed for the proper, efficient and stable administration of the SSS;

"(5) To adopt, from time to time, a budget of expenditures including salaries of
personnel, against all funds available to the SSS under this Act;

" (6) To set up its accounting system and provide the necessary personnel therefor;
" (2) To require reports, compilations and analyses of statistical and economic data
and to make investigation as may be needed for the proper administration and

development of the SSS;

(8) To acquire and dispose of property, real or personal, which may be necessary
or expedient for the attainment of the purposes of this Act;


"(9) To acquire, receive, or hold, by way of purchase, expropriation or otherwise,
public or private property for the purpose of undertaking housing projects
preferably for the benefit of low - income members and for the maintenance of
hospitals and institutions for the sick, aged and disabled, as well as schools for the
members and their immediate families;

"(10) To sue and be sued in court; and

"(11) To perform such other corporate acts as it may deem appropriate for the
proper enforcement of this Act.”

SEC. 2, Section 18, paragraph (a) of the Social Security Law is hereby further amended to
read as follows:

“SEC, 18, Employee's Contribution. - (a) Beginning as of the last day of the
calendar month when an employee's compulsory coverage takes effect and every
month thereafter during his employment, the employer shall deduct and withhold
from such employee’s monthly salary, wage, compensation or earnings, the
employee's contribution in an amount corresponding to his salary, wage,
compensation or earnings during the month in accordance with theffollowing
scheduleJMONTHLY SALARY CREDITS, THE SCHEDULE AND THE
RATE OF CONTRIBUTIONS AS MAYBE DETERMINED AND FIXED
BY THE COMMISSION.

[table of schedule deleted]

The foregoing MONTHLY SALARY CREDITS, schedule AND RATE of
contribution shall also apply to self-employed and voluntary members.

["The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00)
effective January Nineteen hundred and ninety six (1996): Provided, That it shall
be increased by One thousand pesos (P1,000.00) every year thereafter until it
shall have reached Twelve thousand pesos (P12,000.00) by Nineteen hundred and
ninety nine (1999): Provided, further, That the minimum and maximum monthly
salary credits as well as the rate of contributions may be fixed from time to time
by the Commission through rules and regulations taking into consideration
actuarial calculations and rate of benefits, subject to the approval of the President
of the Philippines.]

SEC. 3. Section 22, paragraph (a) of the Social Security Law is hereby further amended to
read as follows:

“SEC. 22. Remittance of Contributions. - (a) The contribution imposed in the
preceding section shall be remitted to the SSS within the first ten (10) days of each
calendar month following the month for which they are applicable or within such
time as the commission may prescribe. Every employer required to deduct and to
remit such contributions shall be liable for their payment and if any contribution


is not paid to the SSS as herein prescribed, he shall pay besides the contribution a
penalty thereon [of three percent (3%) per month]from the date the contribution
falls due until paid. THE RATE OF THE PENALTY ON DELINQUENT
CONTRIBUTIONS PER MONTH SHALL BE DETERMINED AND
FIXED BY THE COMMISSION THROUGH RULES AND
REGULATIONS TAKING INTO CONSIDERATION THE CURRENT
INFLATION RATE AND OTHER RELEVANT SOCIO-ECONOMIC
DATA. If deemed expedient and advisable by the Commission, the collection and
remittance of contributions shall be made quarterly or semi-annually in advance,
the contributions payable by the employees to be advanced by their respective
employers: Provided, That upon separation of an employee, any contribution so
paid in advance but not due shall be credited or refunded to his employer.”

SEC. 4. Separability Clause. If any provision or part hereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall
remain valid and subsisting.

SEC. 5. Repealing Clause. All laws, decrees, orders, rules and regulations and other
issuances or parts thereof which are inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 6. Effectivity. - This Act shall take effect fifteen (15) days following its complete
publication in the Official Gazette or in at least (2) national newspapers of general circulation
whichever comes earlier.

Approved,