Chapter Six

SOCIAL WELFARE LEGISLATION

TOPICS PER SYLLABUS
VI.
SOCIAL WELFARE LEGISLATION
(P.D. 626)

P.D. No. 626 [December 27, 1974], amended Title II of Book IV on Employees’
Compensation and State Insurance Fund of the Labor Code covering Articles 166 to 208 thereof. It
took effect on January 1, 1975.

[NOTE: A more extensive discussion on the pertinent provisions introduced by P.D.

No. 626 is found under the topic “VI. SOCIAL WELFARE LEGISLATION, D. Employee’s
compensation - coverage and when compensable”, infra].

Chapter Six
SOCIAL WELFARE LEGISLATION
TOPICS PER SYLLABUS
A. SSS Law (R.A. No. 8282)
1. Coverage
2. Exclusions from coverage
3. Benefits
4. Beneficiaries

A.
SSS LAW
(R.A. No. 8282)

1.
Coverage
1. COMPULSORY COVERAGE OF EMPLOYERS.
a. An employer or any person who uses the services of another person in business, trade,
industry or any undertaking.
A social, civic, professional, charitable and other non-profit organizations which hire the services
of employees are considered ―employers.‖
b. A foreign government, international organization or its wholly-owned instrumentality such
as an embassy in the Philippines, may enter into an administrative agreement with the SSS
for the coverage of its Filipino employees.1
2. COMPULSORY COVERAGE OF EMPLOYEES.
a. A private employee, whether permanent, temporary or provisional, who is not over 60 years
old.
b. A domestic worker or kasambahay who has rendered at least one (1) month of service.2
c. A Filipino seafarer upon the signing of the standard contract of employment between the
seafarer and the manning agency which, together with the foreign ship owner, act as
employers.
 d. An employee of a foreign government, international organization or their wholly-owned
instrumentality based in the Philippines, which entered into an administrative agreement
with the SSS for the coverage of its Filipino workers.
e. The parent, spouse or child below 21 years old of the owner of a single proprietorship
business.3
3. COMPULSORY COVERAGE OF SELF-EMPLOYED PERSONS.
A self-employed person,4 regardless of trade, business or occupation, with an income of at
least P1,000 a month and not over 60 years old, should register with the SSS. Included, but not limited to, are
the following self-employed persons:
a. Self-employed professionals;
b. Business partners, single proprietors and board directors;
c. Actors, actresses, directors, scriptwriters and news reporters who are not under an
employer-employee relationship;
d. Professional athletes, coaches, trainers and jockeys;
e. Farmers and fisherfolks; and
f. Workers in the informal sector such as cigarette vendors, watch-your-car boys, hospitality
girls, among others.5
Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to covered
employees shall also be applicable to the covered self-employed persons.6
A self-employed person shall be both employee and employer at the same time.7
4. VOLUNTARY COVERAGE.
1. Separated Members
A member who is separated from employment or ceased to be self-employed/OFW/non-
working spouse and would like to continue contributing.8
2. Overseas Filipino Workers (OFWs)
A Filipino recruited in the Philippines by a foreign-based employer for employment
abroad or one who legitimately entered a foreign country (i.e. , tourist, student) and is
eventually employed.9
3. Non-working spouses of SSS members
A person legally married to a currently employed and actively paying SSS member who
devotes full time in the management of household and family affairs may be covered on a
voluntary basis, provided there is the approval of the working spouse. The person should
never have been a member of the SSS. The contributions will be based on 50 percent
(50%) of the working spouse’s last posted monthly salary credit but in no case shall it be
lower than P1,000.10
5. EFFECTIVE DATE OF COVERAGE.
For compulsory coverage:
1. For employer - Compulsory coverage of the employer shall take effect on the first day of
his operation or on the first day he hires employee/s. The employer is given only 30 days
from the date of employment of employee to report the person for coverage to the SSS.11
2. For employee - Compulsory coverage of the employee shall take effect on the first day of
his employment.12
3. For self-employed - The compulsory coverage of the self-employed person shall take
effect upon his registration with the SSS13 or upon payment of the first valid contribution,
in case of initial coverage.14
For voluntary coverage:
1. For an OFW - upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse - upon first payment of contribution.
3. For a separated member - on the month he/she resumed payment of contribution.15

6. EFFECT OF SEPARATION FROM EMPLOYMENT.

 When an employee under compulsory coverage is separated from employment, his employer’s
contribution on his account and his obligation to pay contributions arising from that employment shall
cease at the end of the month of separation, but said employee shall be credited with all contributions
paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however,
continue to pay the total contributions to maintain his right to full benefit.16
7. EFFECT OF INTERRUPTION OF BUSINESS OR PROFESSIONAL INCOME.
If the self-employed realizes NO income in any given month, he shall not be required to pay
contributions for that month. He may, however, be allowed to continue paying contributions under the
same rules and regulations applicable to a separated employee member.17
2.
EXCLUSIONS FROM COVERAGE
1. EXCLUDED EMPLOYER.
Government and any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government18 with original charters.
2. EXCLUDED EMPLOYEES.
Workers whose employment or service falls under any of the following circumstances are not
covered:
(1) Employment purely casual and not for the purpose of occupation or business of the
employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is
employed when such vessel is outside the Philippines;
(3) Service performed in the employ of the Philippine Government or instrumentality or
agency thereof;
(4) Service performed in the employ of a foreign government or international organization, or
their wholly-owned instrumentality: Provided, however, That this exemption
notwithstanding, any foreign government, international organization or their wholly-
owned instrumentality employing workers in the Philippines or employing Filipinos
outside of the Philippines, may enter into an agreement with the Philippine Government
for the inclusion of such employees in the SSS except those already covered by their
respective civil service retirement systems:Provided, further, That the terms of such
agreement shall conform with the provisions of R.A. No. 8282 on coverage and amount of
payment of contributions and benefits: Provided, finally, That the provisions of this Act
shall be supplementary to any such agreement; and
(5) Such other services performed by temporary and other employees which may be excluded
by regulation of the Social Security Commission. Employees of bona-fide independent
contractors shall not be deemed employees of the employer engaging the service of said
contractors.19
3.
BENEFITS
1. TWO (2) MAIN CLASSIFICATIONS.
The SSS benefits may be classified as follows:
(a) Social security benefits:
1) Sickness
2) Maternity
3) Retirement
4) Disability
5) Death and funeral.
(b) Employees’ compensation benefits.
 I.
SOCIAL SECURITY BENEFITS
20
1. SICKNESS BENEFIT.
What is the sickness benefit?
The sickness benefit is a daily cash allowance paid for the number of days a member is unable to
work due to sickness or injury.
How does an SSS member qualify for the sickness benefit?
1. He is unable to work due to sickness or injury and confined either in a hospital or at home
for at least four (4) days;
2. He has paid at least three months of contributions within the 12 month period immediately
before the semester of sickness has been paid;
3. When all company sick leaves with pay for the current year has been used up;
4. The employer has been notified, or, if a separated, voluntary or self-employed member, the
SSS directly.
How much sickness benefit is a member entitled to receive?
The amount of a member’s sickness benefit per day is equivalent to ninety percent (90%) of the
member’s average daily salary credit.
How is the sickness benefit computed?
1. Exclude the semester of sickness.
A ―semester‖ refers to two consecutive quarters ending in the quarter of sickness.
A “quarter” refers to three consecutive months ending March, June, September or
December.
2. Count twelve (12) months backwards starting from the month immediately before the
semester of sickness.
3. Identify the six (6) highest monthly salary credits within the 12-month period.
“Monthly salary credit” means the compensation base for contributions and benefits
related to the total earnings for the month. (The maximum covered earnings or
compensation is P15,000 effective Jan 1, 2002) .
4. Add the six (6) highest monthly salary credits to get the total monthly salary credit.
5. Divide the total monthly salary credits by 180 days to get the average daily salary credit.
6. Multiply the average daily salary credit by 90 percent to get the daily sickness allowance.
7. Multiply the daily sickness allowance by approved number of days to arrive at the amount
of benefit due.
For example, let us say that an SSS member gets sick or injured in October 2004 for 20 days:

a. The semester of sickness would be from July 2004 to December 2004.

b. The 12-month period would be from July 2003 to June 2004 within which the six highest monthly
salary credits will be chosen.
c. Let us assume that the six highest monthly salary credits are P15, 000 each. The total monthly credit
would be P90, 000 (P15, 000 x 6) .
d. The total monthly salary would be divided by 180 to get the average daily salary credit or P500 (P90,
000/180) .
e. The sickness benefit due is P9,000 (P450 x 20 days) .

How many days in a year can a member avail himself of the sickness benefit?
A member can be granted sickness benefit for a maximum of 120 days in one calendar year. Any
unused portion of the allowable 120 days sickness benefit cannot be carried forward and added to the total
number of allowed compensable days for the following year.
The sickness benefit shall not be paid for more than 240 days on account of the same illness.
If the sickness or injury still persists after 240 days, his claim will be considered a disability claim.
Who should an employee notify regarding his sickness or injury?
 A member should notify the employer within five (5) calendar days after the start of sickness or
injury. The employer, in turn, must notify the SSS of the confinement within (5) calendar days after receipt of
the notification from the employee member.
Notification to the employer is not necessary if the member’s confinement is in a hospital or if the
member got sick or was injured while working or was within the company premises. In this case, the
employer must notify the SSS within five (5) calendar days from the start of the employee’s sickness or
injury while working or was within the company premises.
What is the procedure for notification for unemployed, self-employed and voluntary
members?
Unemployed, self-employed or voluntary-paying members should notify the SSS directly within
five (5) calendar days after the start of confinement, unless such confinement is in the hospital, in which case,
notification is not necessary.
What are the effects of failure or delay in notification?
1. If the employee notifies the employer, or the SSS, in the case of an unemployed, self-
employed or voluntary-paying member, beyond the prescribed 5-day period, the
confinement shall be deemed to have started not earlier than the 5 day immediately
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preceding the date of notification.

2. If the employer notifies the SSS beyond the five (5) calendar days after the receipt of the
notification from the employee, the employer shall be reimbursed only for each day of
confinement starting from the 10 calendar day immediately preceding the date of
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notification to the SSS.

3. If the employee has given the required notification to the employer, but the employer fails
to notify the SSS of the confinement within the prescribed period resulting in the reduction
of the benefit or denial of the claim, the employer shall have no right to recover the daily
sickness allowance advanced to the employee.
How would an employed member be paid his sickness benefit?
The payment of the daily sickness allowance is advanced by the employer every regular payday.
The SSS will then reimburse the employer of the amount legally advanced upon receipt of satisfactory proof
of such payment and legality thereof.
The SSS will reimburse the employer only for confinements within the one (1) year period
immediately preceding and the date the claim for benefit or reimbursement is received by the SSS, except
for confinements in hospital (i.e. SSS receives the employer’s reimbursement claim on Oct. 3, 2004 for the
sickness period September 23 to Oct. 14, 2003. The employer will be reimbursed for the period Oct. 4 to
14,2003 only as Sept. 23 to Oct. 3, 2003 falls outside the prescribed one-year period for reimbursement
claim) .
How about the unemployed, self-employed or voluntary member?
The sickness benefit will be paid directly by the SSS to the unemployed, self-employed or
voluntary members.
What is the prescribed period for filing for a member who is confined in a hospital?
For hospital confinement, the claim for benefit must be filed within one (1) year from the last day of
confinement from the hospital. For home confinement, the claim for reimbursement by the employer must
be filed within one (1) year from the start of illness. Failure to file the claim within the prescribed period will
result to denial of the claim.
2. MATERNITY BENEFIT. 21
What is the maternity benefit?
The maternity benefit is a daily cash allowance granted to a female member who was unable to work
due to childbirth or miscarriage.
What are the qualifications for entitlement to the maternity benefit?
1. She has paid at least three (3) monthly contributions within the 12-month period
immediately preceding the semester of her childbirth or miscarriage.
 2. She has given the required notification of her pregnancy through her employer if employed,
or to the SSS if separated, voluntary or self-employed member.22
Pregnant women, whether married or unmarried, are entitled to maternity leave benefits.
Entitlement to maternity leave benefits is not dependent on the civil status of the pregnant woman.
Every pregnant woman in the private sector, whether married or unmarried, is entitled to the maternity leave
benefits.23
Maternity benefits, not part of 13 month pay computation.
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Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of
wages and therefore may not be included in computing the employee’s 13 month pay for the calendar year.24
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Is the voluntary or self-employed member also entitled to the maternity benefit?

Yes, A voluntary or a self-employed member is entitled to the maternity benefit provided that she
meets the qualifying conditions.
How much is the maternity benefit?
The maternity benefit is equivalent to 100 percent of the member’s average daily salary credit
multiplied by 60 days for normal delivery or miscarriage,78 days for caesarean section delivery.
How is the maternity benefit computed?
1. Exclude the semester of contingency (delivery or miscarriage) .
A “semester” refers to two consecutive quarters ending in the quarter of contingency.
A “quarter” refers to three consecutive months ending March, June, September or
December.
2. Count 12 months backwards starting from the month immediately before the semester of
contingency.
3. Identify the six highest monthly salary credits within the 12-month period.
“Monthly salary credit” means the compensation base for contributions benefits related to the
total earnings for the month.
4. Add the six highest monthly salary credits to get the total monthly salary credit.
5. Divide the total monthly salary credit by 180 days to get the average daily salary credit.
This is equivalent to the daily maternity allowance.
6. Multiply the daily maternity allowance by 60 (for normal delivery or miscarriage) or 78
days (for caesarean section delivery) to get the total amount of maternity benefit.
For example, let us say that an SSS member gives birth in December 2004.
a. The semester of contingency would be from July 2004 to December 2004
b. The 12-month period before the semester of contingency would be from July 2003 to June 2004
c. Let us assume that the six highest monthly salary credits are P15,000 each. Thus, the total monthly
salary credit would be P90,000 (P15, 000 x 6) .
d. The daily maternity allowance would be P500 (P90,000/180) .
e. The total maternity benefit due would be P30, 000 (P500 x 60 days) for normal delivery or P39,000
(P500 x 78) for caesarian cases.

How many deliveries are covered under existing laws?

The maternity benefit shall be paid only for the first four (4) deliveries or
miscarriages starting May 24, 1997 when the Social Security Act of 1997 (R.A. No. 8282) took effect.
Can a member apply for sickness benefit if she has been paid the maternity benefit?
No. A female member cannot claim for sickness benefit for a period of 60 days for normal delivery
or miscarriage or 78 days for caesarean delivery within which she has been paid the maternity benefit. As a rule,
no member can be entitled to two benefits for the same period.
Is it necessary to notify the SSS of a member's pregnancy?
Yes. As soon as a member becomes pregnant, she must immediately notify her employer (if
employed) or the SSS (if separated/voluntary/self-employed) of such pregnancy and the probable date of her
childbirth at least 60 days from the date of conception by accomplishing SSS FORM MAT-1 (Maternity
Notification Form) and by submitting proof of pregnancy.
 The employer must, in turn, notify the SSS through the submission of the maternity
notification form and proof of pregnancy immediately after the receipt of the notification from the
employee member.
Failure to observe the rule on notification may result to the denial of the maternity claim.
How would the claimant be paid the maternity benefit?

(1) For employed members - the benefit is advanced by the employer to the qualified
employee, in full, within 30 days from the date of filing of the maternity leave
application. The SSS, in turn, shall immediately reimburse the employer 100 percent of the
amount of maternity benefit advanced to the female employee upon r eceipt of
satisfactory proof of such payment and legality thereof.
If the employee member gives birth or suffers miscarriage without the required
contributions having been remitted by the employer, or the employer fails to notify the SSS,
the employer will be required to pay to the SSS damages equivalent to the benefits the
employee would otherwise have been entitled to.
(2) For separated/voluntary/self-employed members - the amount of benefit is paid directly
to them by the SSS.
3. RETIREMENT BENEFIT. 25
What is the retirement benefit?
It is a cash benefit either in monthly pension or lump sum paid to a member who can no longer
work due to old age.
Who may qualify for a retirement benefit?
1. A member who is 60 years old, separated form employment or ceased to be self-employed,
and has paid at least 120 monthly contributions prior to the semester of retirement.
2. A member who is 65 years old whether employed or not and has paid at least 120 monthly
contributions prior to the semester of retirement.
For Underground Mineworkers:
1. Has reached the age of 55 years old and is an underground mineworker for at least 5 years
(either continuous or accumulated) prior to the semester of retirement but whose actual
date of retirement is not earlier than March 13, 1998; separated from employment or in the
case of self-employed, has ceased self-employment, and has paid at least 120 monthly
contributions prior to the semester of retirement.
2. Has reached the age of 60 years old whether employed or not.
What are the types of retirement benefits?
They are:
1. the monthly pension, and
2. the lump sum amount.
The monthly pension is a lifetime cash benefit paid to a retiree who has paid at least 120 monthly
contributions to the SSS prior to the semester of retirement.
The lump sum amount is granted to a retiree who has not paid the required 120 monthly
contributions. It is equal to the total contributionspaid by the member and by the employer including
interest.
How much monthly pension will a retiree receive?
The monthly pension depends on the members paid contributions, including the credited years of
service (CYS) and the number of dependent minor children but not to exceed five. The amount of monthly
pension will be the highest of:
1. the sum of P300 plus 20 percent of the average monthly salary credit plus 2 per cent of the
average monthly salary credit for each accredited year of service (CYS) in excess of ten
years; or
2. 40 per cent of the average monthly salary credit; or
 3. P1,200, provided that the credited years of service (CYS) is at least 10 or more but less than
20 or P2,400, if the CYS is 20 or more. The monthly pension is paid for not less than 60
months.
A retiree has the option to receive the first 18 monthly pension in lump sum discounted at a
preferential rate of interest to be determined by the SSS. The option should be exercised upon filing of
the first retirement claim. Only advance payments shall be discounted on the date of the payment. The
dependents’ pension and 13 month pensions are excluded from the 18 months lump sum pension.
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The member will receive the monthly pension on the 19 month and every month thereafter.
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What happens when the retirement pensioner resumes employment?

The monthly pension shall be suspended upon the re-employment or resumption of self-
employed of a retired member who is less than 65 years old. The member shall again be subjected to
compulsory coverage. At 65 year old whether employed or not, he can already claim for
retirement benefit.
How much is the monthly pension of a member who retires after age 60 and who has
contributed the required 120 monthly contributions?
The monthly pension shall be the higher of the following:
1. the monthly pension computed at the earliest time the member could have retired had been
separated from self-employment or ceased to be self-employed plus all adjustments
thereto; or
2. the monthly pension computed at the time when the member actually retires.
A pensioner who retires more than once shall be entitled to the higher of:
1. the monthly pension computed for the first retirement claim; or
2. the re-computed monthly pension for the new claim.
Aside from the retirement benefit, what else can a retiree receive?
The retiree is entitled to a 13 month pension payable every December. All retiree pensioners
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prior to the effectivity of R.A. No. 787526 on March 4, 1995 are automatically considered members of
PhilHealth and he and his legal dependents are entitled to its hospitalization benefits. On the other
hand, retirees effective March 4,1995 up to the present will be entitled to hospitalization benefits under
PhilHealth only if they have contributed 120 monthly Medicare contributions. The counting of 120
monthly contributions shall start in 1972, when the Medical Care Act of 1969 started implementation.
Are the children of a retiree member entitled to the dependent's pension?
The legitimate, legitimated, or legally adopted and illegitimate children, conceive on or before the
date of retirement of a retiree will each receive dependents’ pension equivalent to 10 percent of the member’s
monthly pension or P250, whichever is higher.
Only five minor children, beginning from the youngest, are entitled to the dependents’
pension. No substitution is allowed.
If there are more than five dependents, the legitimate, legitimated or legally adopted children shall
be preferred.
For how long will the dependent child receive his pension?
The dependents’ pension stops when the child reaches 21 years old, gets married, gets
employed or dies. However, the dependents’ pension is granted for life for children who are over 21 years
old, provided they are incapacitated and incapable of self-support due to physical or mental defect which
is congenital or acquired during minority.
What will happen to the monthly pension of a retiree in case of death?
Upon the death of a retiree pensioner, the primary beneficiaries as of the date of retirement
shall be entitled to 100 per cent of the monthly pension and the dependents to the dependents’ pension.
If the retiree pensioner dies within sixty (60) months from the start of the monthly pension and
has no primary beneficiaries, the secondarybeneficiaries shall be entitled to a lump sum benefit
equivalent to the total monthly pensions corresponding to the five-year guaranteed period excluding the
dependents’ pension.
4. DISABILITY BENEFIT. 27
What is the New Disability Program?
 The new SSS Disability program is a re-designed disability program that implements the
revised manual of disability assessment. The new program adopts the World Health Organization’s
(WHO) definition of disability that states that it is any ―restriction or lack (resulting from impairment)
of ability to perform an activity in the manner or within the range considered normal for a human
being.‖
What are the salient features of the new disability program?
The re-designed disability program -
a. adopts the WHO definition of disability which is any ―restriction or lack (resulting from
impairment) of ability to perform an activity in the manner or within the range considered
normal for a human being. ‖ Impairment is defined as any loss or abnormality of
psychological, physiological, or anatomical structure or function.
b. adopts the International Statistical Classifications of Diseases and Related Health
problems Codes (ICD-10) .
c. includes medical and functional assessments.
d. requires annual assessment of all pensioners except those with scheduled disabilities
stated under Section 13-A (f) of the SS Law.

What is the medical and functional assessment under the new disability program?
Under medical assessment, nature and degree of impairment of affected body part/system is
determined through physical examination and interview supported by appropriate diagnostic tests; while,
under functional assessment, the capacity of the individual to perform activities of daily living (ADL) is
tested using the Functional Independence Measure (FIM) .
Member should have 20% medical impairment to qualify for functional assessment.
Who is qualified for disability benefit under the new program?
A member who suffers partial or total disability with at least one (1) monthly contribution paid to
the SSS prior to the semester of contingency is qualified.
What are some of the permanent partial disabilities?
A complete and permanent loss or use of any of the following body parts and does not totally prevent
a member from engaging in any gainful occupation.

one thumb one big toe

one index finger one hand
one middle finger one arm
one ring finger one foot
one little finger one leg
hearing of one ear one ear
hearing of both ears both ears
sight of one eye

What are some of the permanent total disabilities?

The following fall under permanent total disability:
1. complete loss of sight of both eyes;
2. loss of two limbs at or above the ankle or wrists;
3. permanent complete paralysis of two limbs;
4. brain injury resulting to incurable imbecility or insanity; and
5. such cases as determined and approved by the SSS.
What are the types of disability benefits?
They are:
1. the monthly pension; and
2. the lump sum amount.
The monthly pension is a cash benefit paid to a disabled member who has paid at least 36 monthly
contributions to the SSS prior to the semester of disability.
 The lump sum amount is granted to those who have not paid the required 36 monthly
contributions.
How much is the monthly pension?
The amount of the monthly pension will be based on the member’s number of paid
contributions and the years of membership.
The lowest monthly pension is P1,000 for members with less than 10 credit years of service (CYS)
; P1,200 with at least 10 CYS and P2,400 with at least 20 CYS.
Is the monthly pension for life?
Only totally and permanently disabled members will receive a lifetime monthly pension.
However, the pension will be suspended if the pensioner recovers from the illness, resumes
employment or fails to report for annual physical examination when notified by the SSS. The member may
request for a domiciliary or a home visit if the disability inhibits the member from reporting for reexamination
by the SSS physician at any of SSS branch offices.
The monthly pension of a partially disabled member is paid up to a certain number of months only
according to the degree of disability. If with deteriorating and related permanent partial disability, the
percentage degree of disability of previously granted claim shall be deducted from the percentage degree of
disability of the current claim.
The monthly pension is also given in a lump sum if duration of pension is payable for less than 12
months.
How much is the lump sum amount?
For permanent total disability, the lump sum benefit is equivalent to the monthly pension times
the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is
higher.
For permanent partial disability, the lump sum is equivalent to the monthly pension times the number
of monthly contributions times the percentage of disability in relation to the whole body or the monthly pension
times 12 times the percentage of disability, whichever is higher.
Aside from the disability benefit, what else can a disability pensioner receive?
In addition to the monthly pension, a supplemental allowance of P500.00 is paid to the total or partial
disability pensioner. The allowance will provide additional financial assistance to meet the extra needs arising
from the disability.
Total disability pensioners and their legal dependents prior to the effectivity of R.A. 787528 on
March 4, 1995 are entitled to hospitalization benefits under PhilHealth. Total disabled pensioners upon
the effectivity of R.A. 7875 on March 4, 1995 and thereafter, are no longer covered exceptwhen they
have accumulated one hundred twenty (120) Medicare monthly contributions and have reached age
sixty (60) .
However, those who wish to avail of PhilHealth benefits may enroll in the IndividuallyPaying
Program (for voluntary/self-employed) or the Indigent Program (IP) of PhilHealth.
Are the children of a disabled member entitled to the dependent's pension?
The dependent legitimate, legitimated, legally adopted and illegitimate children, conceived on or
before the date of contingency of a totally disabled pensioner will each receive a dependent’s pension
equivalent to 10 per cent of the member’s pension or P250, whichever is higher.
Only five minor-children, beginning from the youngest are entitled to the dependents’ pension.
No substitution is allowed. Where there are legitimate and illegitimate minor children, the legitimated or
legally adopted ones will be preferred.
The minor children of a partially disabled pensioner are not entitled to the dependent’s
pension.
For how long will the dependent child receive his pension?
The dependent’s pension stops when the child reaches 21 years old, gets married, gets
employed or dies. However, the dependent’s pension is granted for life to children who are over 21
years old, provided, they are incapacitated and incapable of self-support due to physical or mental defect
which is congenital or acquired during minority.
What will happen to the monthly pension in case the pensioner gets re-employed,
resumes self-employment, recovers from his permanent total disability or his failure to
present himself/herself for examination upon notice by SSS?
The monthly pension of the member and the dependent’s pension will be suspended upon the
reemployment or resumption of self-employment or the recovery of the disabled member from
permanent total disability or failure to present himself/herself for examination at least once a year upon notice
by SSS.
What will happen to the monthly pension of a disability pensioner in case of death?
Upon the death of the permanent total disability pensioner, the primary beneficiaries as of the date of
disability, shall be entitled to 100 per cent of the monthly pension and the dependents to the dependents’
pension.
If the totally disabled pensioner has no primary beneficiaries and dies within sixty (60) months
from the start of the monthly pension, the secondary beneficiaries shall be entitled to a lump sum benefit
equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period
excluding the dependent’s pension.
The pension stops when a partial disability pensioner retires or dies.
What is the prescriptive period in filing disability claims?
The prescriptive period in the filing of disability benefit claim is ten (10) years from the date of
occurrence of disability.
5. DEATH AND FUNERAL. 29
What is the death benefit?
It is a cash benefit either in monthly pension or lump sum paid to the beneficiaries of a
deceased member.
What are the types of death benefits?
They are:
1. the monthly pension; and
2. the lump sum amount.
The monthly pension is granted only to the primary beneficiaries of a deceased member who had
paid 36 monthly contributions before the semester of death.
The lump sum is the amount granted to the primary beneficiaries of a deceased member who
had paid less than 36 monthly contributions before the semester of death.
The secondary beneficiaries shall be entitled to a lump sum benefit.
How much is the monthly pension?
The monthly pension depends on the member’s paid contributions, including the credited years of
service (CYS) and the number of dependent minor children but not to exceed five (5) .
The amount of monthly pension will be the highest of:
1. the sum of P300 plus 20 percent of the average monthly salary credit plus two percent of
the average monthly salary credit for each credited year of service (CYS) in excess of 10
years; or
2. 40 percent of the average monthly salary credit; or
3. P1,000 if the member had less than 10 credited years of service (CYS) ; P1,200 if with at
least 10 CYS; or P2,400 if with at least 20 CYS. The monthly pension is paid for not less
than 60 months.
If the deceased member is survived by legitimate, legitimated, or legally adopted and
illegitimate children, how is the monthly pension divided?
If a deceased member is survived by less than five (5) minor legitimate, legitimated, or legally
adopted children, the illegitimate minor children will be entitled to 50 percent of the share of the
legitimate, legitimated or legally adopted children in the basic pension and 100 percent of the
dependents' pension.
In cases where there are no legitimate, legitimated, or legally adopted children, the illegitimate minor
children shall be entitled to 100 percent of the basic pension.
How much is the lump sum death benefit?
The primary beneficiaries of a deceased member who has paid less than 36 monthly
contributions shall be entitled to lump sum benefit which shall be the higher of:
1) monthly pension times the number of monthly contributions paid prior to the semester of
death; or
2) twelve (12) times the monthly pension.
The secondary beneficiaries of the deceased member shall be entitled to a lump sum benefit
equivalent to:
a. 36 times the monthly pension; if the member has paid at least 36 monthly contributions
prior to the semester of death; or
b. monthly pension times the number of monthly contributions paid or twelve (12) times the
monthly pension, whichever is higher, if the member has paid less than 36 monthly
contributions prior to the semester of death.

Is there anything else a deceased member's beneficiaries can avail of?

Yes, the deceased member’s beneficiaries are entitled to a 13 month pension payable every
th

December and the funeral benefit, which is paid to whoever, shouldered the funeral expenses of the
deceased member.
Survivorship pensioners prior to the effectivity of R.A. 7875 30 on March 4, 1995 are also
entitled to hospitalization benefits under PhilHealth. They need to register under PhilHealth and must submit
a DDR print-out indicating the type of claim is survivorship in nature and the effectivity date of pension or a
copy of Death/Survivorship Certification issued by the SSS indicating the effectivity of the pension shall be
submitted to PhilHealth.
Survivorship pensioners under the effectivity of RA 7875 on March 4, 1995 and thereafter, are
no longer covered. However, those who wish to avail of PhilHealth benefits may enroll in the
Individually-Paying Program (for voluntary/self-employed) or the Indigent Program (IP) of PhilHealth.
If the deceased member has not paid any single contribution, are the beneficiaries still
entitled to the death and funeral benefits?
The primary or secondary beneficiaries of a deceased employee-member, who had no
contribution payment at all and who was reported for coverage shall be entitled to funeral benefit only.
Are the children of a deceased member entitled to the dependents' pension?
The dependent legitimate, legitimated, legally adopted or illegitimate children, conceived on or
before the date of death of a deceased will each receive a dependents’ pension equivalent to 10 percent of
the members’ monthly pension or P250, whichever is higher.
Only five (5) minor children, beginning from the youngest, are entitled to the dependents’ pension.
No substitution is allowed.
Where there are more than five (5) legitimate and illegitimate minor children, the legitimate shall
be preferred.
For how long will the dependent child receive his pension?
The dependents’ pension stops when the child reaches 21 years old, gets married, gets
employed or dies. However, the dependents’ pension is granted for life to children who are over 21 years
old, provided they are incapacitated and incapable of self-support due to physical or mental defect which
is congenital and acquired during minority.
What is the funeral grant?
 A funeral grant of P20,000 (effective September 1, 2000) is given to whoever pays the burial
expenses of the deceased member or pensioner.
4.
BENEFICIARIES
1. PRIMARY BENEFICIARIES.
The following are primary beneficiaries:
1. The dependent spouse until he or she remarries;
2. The dependent legitimate, legitimated or legally adopted, and illegitimate
children who are not yet 21 years of age.
The dependent illegitimate children shall be entitled to 50% of the share of the
legitimate, legitimated or legally adopted children. However, in the absence of the
dependent legitimate, legitimated children of the member, his/her dependent illegitimate
children shall be entitled to 100% of the benefits
2. SECONDARY BENEFICIARIES.
The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
2. Any other person designated by the member as his/her secondary beneficiary, in the
absence of all the foregoing primary beneficiaries and dependent parents.
II.
EMPLOYEES’ COMPENSATION BENEFITS
This is the second class of benefits under the SSS Law, the first being the social security
benefits discussed above. For purposes of discussing this topic in an orderly fashion, the same shall be
presented under the topic “D. Employee’s compensation - coverage and when compensable”, infra.

------------oOo------------

Chapter Six
SOCIAL WELFARE LEGISLATION
TOPICS PER SYLLABUS
B. GSIS Law (R.A. No. 8291)

1. Coverage
2. Exclusions from coverage
3. Benefits
4. Beneficiaries

B.
GSIS LAW
(R.A. No. 8291) 1
1.
COVERAGE
1. COMPULSORY MEMBERSHIP IN THE GSIS. 2
1. All government personnel, whether elective or appointive, irrespective of status of
appointment, provided they are receiving fixed monthly compensation and have not reached the
mandatory retirement age of 65 years, are compulsorily covered as members of the GSIS and shall be
required to pay contributions.3
2. However, employees who have reached the retirement age of 65 or more shall also be
covered, subject to the following rules:
An employee who is already beyond the mandatory retirement age of 65 shall be compulsorily
covered and be required to pay both the life and retirement premiums under the following situations:
a. An elective official who at the time of election to public office is below 65 years of age and
will be 65 years or more at the end of his term of office, including the period/s of his re-
election to public office thereafter without interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to
government position by the President of the Republic of the Philippines and shall remain in
government service at age beyond 65.4
c. Contractual employees including casuals and other employees with an employee-
government agency relationship are also compulsorily covered, provided they are
receiving fixed monthly compensation and rendering the required number of working
hours for the month.5
2. CLASSES OF MEMBERSHIP.
Membership in the GSIS is classified either by type or status of membership.6
As to type of members, there are regular and special members:
(a) Regular Members - are those employed by the government of the Republic of the
Philippines, national or local, legislative bodies, government-owned and controlled
corporations (GOCC) with original charters, government financial institutions (GFIs) ,
except uniformed personnel of the Armed Forces of the Philippines, the Philippine
National Police, Bureau of Jail Management and Penology (BJMP) and Bureau of Fire
Protection (BFP) , who are required by law to remit regular monthly contributions to the
GSIS.
(b) Special Members - are constitutional commissioners, members of the judiciary,
including those with equivalent ranks, who are required by law to remit regular monthly
contributions for life insurance policies to the GSIS in order to answer for their life
insurance benefits defined under RA 8291.7
As to status of membership, there are active and inactive members.
(a) Active member - refers to a member of the GSIS, whether regular or special, who is
still in the government service and together with the government agency to which he
belongs, is required to pay the monthly contribution.
(b) Inactive member - a member who is separated from the service either by resignation,
retirement, disability, dismissal from the service, retrenchment or, who is deemed
retired from the service under this Act.8
3. EFFECTIVITY OF MEMBERSHIP.
The effective date of membership shall be the date of the member’s assumption to duty on his
original appointment or election to public office.9
4. EFFECT OF SEPARATION FROM THE SERVICE.
A member separated from the service shall continue to be a member, and shall be entitled to
whatever benefits he has qualified to in the event of any contingency compensable under the GSIS
Law.10
2.
EXCLUSIONS FROM COVERAGE
11
1. EXCLUSION FROM COMPULSORY COVERAGE OF GSIS LAW.
The following employees are excluded from compulsory coverage:
 (a) Uniformed personnel of the Armed Forces of the Philippines (AFP) , Philippine National
Police (PNP), Bureau of Fire Protection (BFP) and Bureau of Jail Management and
Penology (BJMP) ;12
(b) Barangay and Sanggunian Officials who are not receiving fixed monthly
compensation; 13
(c) Contractual Employees who are not receiving fixed monthly compensation;14 and
(d) Employees who do not have monthly regular hours of work and are not receiving fixed
monthly compensation.15
3.
BENEFITS
1. KINDS OF BENEFITS.
The following are the benefits under the GSIS Law:
(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP)
(b) Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)
(c) Retirement Benefits
(d) Separation Benefit
(e) Unemployment Benefit
(f) Disability Benefits
(g) Survivorship Benefits
(h) Funeral Benefits

2. COMPULSORY LIFE INSURANCE BENEFITS UNDER THE LIFE ENDOWMENT

POLICY (LEP) 16
A member under this policy may be entitled to any of the following benefits, depending on the
circumstances:
a) Maturity benefits, which is the face amount payable to the member upon maturity of the
policy.
b) Cash Surrender Value, which is earned values during the term of the insurance payable to
the member when he is separated from the service before maturity date of the policy or
when he is considered as a case of PTD.
c) Death Benefit, which is the face value of the policy payable to designated
beneficiary/beneficiaries or legal heirs, in the absence of the former, upon the death of a
member.
d) Accidental Death Benefit (ADB) is an additional benefit equivalent to the amount of
Death Benefit when the member dies by accident. In this connection, proof must be
presented to sufficiently establish that the cause of the member’s death is accidental.
e) The right to present sufficient proof to show that death was accidental shall prescribe if
the claim for ADB is filed four (4) years after the death of the member.
f) Cash Dividend. A policyholder is entitled to dividends subject to the guidelines as
approved by the GSIS Board. This is not a guaranteed benefit.17
3. COMPULSORY LIFE INSURANCE BENEFITS UNDER THE ENHANCED LIFE POLICY
(ELP) . 18
A member under this policy may be entitled to any of the following benefits, depending on the
circumstances:
1. Death Benefit equivalent to the latest annual salary multiplied by amount of insurance
(AOI) factor which is 1.5 or 18 times the current monthly salary of the member or as
determined by the GSIS, payable to the legal heirs, less all outstanding obligations of the
member in accordance with the CLIP.
2. Termination Value. The policy earns a Termination Value during the life of the policy
computed from the percentage of life insurance premiums actually remitted and paid to
GSIS.
 Termination value is equivalent to a percentage of monthly life insurance premiums as
determined by the GSIS, due and paid in full, either by direct remittance or through an APL
facility.
The accumulated termination value will grow at such rate as determined by the Actuary.
The termination value shall be paid to the member upon his separation from the
government service less all indebtedness of the member with the GSIS in accordance with
CLIP.
3. Cash Dividend. A policyholder is entitled to dividends, subject to the guidelines as
approved by the GSIS Board. This is not a guaranteed benefit.19
4. RETIREMENT BENEFITS. 20
The retirement benefit consists of a monthly pension which is computed based on years of
creditable service and Average Monthly Compensation (AMC) for the last 3 years.
a. Eligibility.
The member:
1. has rendered at least Fifteen (15) years of service;
2. is at least Sixty (60) years of age; and
3. is not receiving a monthly pension benefit from permanent total disability.21
b. Retirement Benefit Options.
A retiring member has the following options:
(1) Five (5) year lump sum equivalent to sixty (60) months of the basic monthly pension
(BMP) , subject to qualification requirements, less all outstanding obligations of the member in
accordance with the Claims and Loans Interdependency Policy (CLIP) , plus an old-age pension
benefit equal to the BMP payable for life, starting on the first day of the month following the expiration of the
five year guaranteed period; or
(2) A cash payment benefit equivalent to eighteen (18) times of the BMP, subject to
qualification requirements, less all outstanding obligations of the member in accordance with the CLIP,
plus monthly pension for life payable on the first month following the date of retirement.22
c. Conversion in the mode of retirement.
Conversion in the mode of retirement from R.A. No. 8291 to any other retirement laws and vice
versa administered by the GSIS shall not be allowed.
Those who became GSIS members prior to the implementation of R.A. No. 8291 shall have
the option to retire under PD 1146, RA 660, or RA 1616, subject to eligibility. 23
d. Change of retirement benefit option under RA 8291.
Change of retirement benefit option from eighteen (18) months cash payment plus immediate
pension to five (5) year lump sum, or vice versa, shall not be allowed. The GSIS shall process the
claim for retirement benefits based on the member’s records in the GSIS database.24
e. Processing of retirement benefits of members who died while their claims are being
processed.
For those qualified for retirement benefits:
1. If the deceased member opted for five year lump sum benefit as indicated in his/her claim
for retirement application, his legal heirs shall be entitled to five-year lump sum benefit
equivalent to sixty (60) months basic monthly pension (BMP) . However, the survivorship
pension to qualified primary beneficiaries, if any, shall be granted after the end of the 5-
year guaranteed period, but filing of claim for survivorship benefit should be done before
the end of the 4-year prescription period.
2. If the deceased member opted for immediate pension as indicated in his/her claim for
retirement benefit his legal heirs shall be entitled to retirement benefits equivalent to
eighteen (18) months of BMP, plus accrued pension, if any, up to the date of death of the
retiree. The corresponding survivorship pension shall be paid to the qualified primary
 beneficiaries, if any, and shall be computed from the date of death of the retiree, subject to filing
of claim.
3. In case the deceased member failed to indicate in his/her retirement option, it shall be
computed as if he/she opted for immediate pension.
4. The proceeds of retirement benefits shall be paid and distributed to the legal heirs in
accordance with the law on succession under the Civil Code of the Philippines.25
For those not qualified for retirement benefits, the GSIS shall determine if he/she is qualified
to other applicable benefits under R.A. 8291 or such other laws administered by the GSIS.26
f. Effects of re-employment.
When a retired/separated member is re-employed or reinstated in the service, his/her previous
services credited at the time of his/her retirement/separation for which a corresponding benefit had
been awarded, shall be excluded in the computation of service. In effect, he/she shall be considered a
new entrant.
However, for those who retired prior to the enactment of R.A. 8291, the previous services of a
retired/separated member may be added in the computation of his creditable services (subject to
premium-based policy) upon subsequent retirement under R.A. 8291 only when both conditions are
met: (a) the retiree re-entered government service before June 24, 1997; and (b) the total amount of
benefit previously received, if any, including the prescribed interest was refunded to GSIS on or before
March 2, 2006.27
g. Basis of computation of total service.
Total Length of Service (TLS) is the number of years in government service regardless of status
of employment, with or without premium contributions.
For purposes of computing the total length of service under part-time status of employment,
services shall be converted to their full-time equivalent using forty-hour week and fifty two-week a
year as basis.28
h. Computation of creditable service.
The computation of creditable service for the purpose of determining the amount of benefits
payable shall include the period or periods of service with the required premium contributions.29
i. Computation of Average Monthly Compensation (AMC) .
The AMC shall be computed on the basis of the average salary of the member for the last 36
months of creditable service immediately preceding his retirement or separation.
The basis for computing the AMC of a separated or retired member requesting for
computation of benefits shall be the prevailing policy on AMC at the time the claim is being
processed.30
j. Computation of Revalued Monthly Compensation.
AMC plus Seven Hundred Pesos (P700.00) .31
k. Computation of Basic Monthly Pension.
The formula for computing the BMP may be adjusted subject to the approval of the Board upon the
recommendation by the President and General Manager.
As a general rule, the BMP shall only be computed for those members or dependents/heirs of
members who are eligible to receive benefits under this law. It shall be computed on the basis of a
percentage of the RAMC at the rate of 2.5% for every year of creditable service, but in no case shall it exceed
90% of the AMC of the member.
The formula for computing BMP shall be: BMP = RAMC x (2.5% x RCS) 32
l. Adjustment/Increase in pension.
Periodic adjustments of the monthly pension of all existing pensioners shall be done on the
basis of what is sustainable and prudent for the GSIS as recommended by its Actuary and approved by
the Board.33
 m. Policies affecting pension administration.
1. Regardless of the date of retirement, the monthly pension shall commence on the 1 day of the
st

month following the month of retirement.

2. Annual Renewal of Active Status (ARAS) of Old Age and Survivorship Pensioners is
required on their birth month every year.
3. Effects of non-renewal of active status as pensioner:
a. Suspension of payment of monthly pension;
b. Non-entitlement to cash gift if status is suspended at the time of declaration;
c. Non-entitlement to pension increases if status is suspended at the time of declaration.34
5. SEPARATION BENEFIT. 35
Separation benefit Is either one of the following:
1. For those members who are separated from service and who have at least 3 years of service
but less than 15 years shall be entitled to cash payment equivalent to 100% of the member’s AMC for
each year of creditable service, but not less than P12,000.00, payable upon reaching age 60, or upon his
separation if he is already 60 years of age at the time of separation.36
2. A cash payment equivalent to eighteen (18) times the basic monthly pension payable at the
time of resignation or separation, provided the member resigns or separates from the service after he
has rendered at least 15 years of service and is below 60 years of age, plus an old-age pension benefit
equal to the basic monthly pension payable monthly for life upon reaching the age of sixty (60) .37
3. Reckoning Date of Separation of Uniformed PNP, BJMP and BFP Personnel shall be
February 1, 1996. The computation of benefit shall be based on their basic monthly salary (premium-
based) when they ceased to be members of the GSIS.38
4. Processing of separation benefit of members who died while their claims are being
processed:
1. If the member dies during the pendency of his claim for separation benefit and he has
rendered at least 15 years of creditable service, his legal heirs shall be entitled to receive cash payment
equivalent to eighteen (18) times the basic monthly pension, plus accrued BMP, if any, up to the date
of death of the member. Thereafter, the primary beneficiaries shall be entitled to survivorship
pension.39
2. If the member dies during the pendency of his claim for separation benefit and he has
rendered less than 15 years of creditable service, his legal heirs shall be entitled to cash payment
equivalent to one hundred percent (100%) of AMC for each year of creditable service, but not less than
Twelve Thousand Pesos (P12,000.00) .40
6. UNEMPLOYMENT BENEFIT. 41
a. Conditions for entitlement to unemployment benefit.
A member shall be entitled to the unemployment benefits if the following conditions are met:
1. he/she was a permanent employee at time of separation;
2. his/her separation was involuntary due to the abolition of his/her office or position resulting
from reorganization; and
3. he/she has been paying the required premium contributions for at least one (1) year but less
than 15 years prior to separation.42
b. Amount, duration and payment of unemployment benefit.
The amount of unemployment benefit is equivalent to 50% of the AMC and shall be paid in
accordance with the Schedule provided in the Implementing Rules of this Act (R.A. No. 8291) .43
7. DISABILITY BENEFITS. 44
a. Meaning.
Disability refers to any loss or impairment of the normal functions of the physical and/or
mental faculties of a member, which permanently or temporarily prevents him to continue with his
work or engage in any other gainful occupation resulting in the loss of income.45
 b. Basis of reckoning.
The corresponding disability benefits for each kind of disability shall be granted to a member
based on the duration of incapacity to work and actual loss of income. 46
c. Kinds of disability.
There are three (3) kinds of disability which shall be determined by the GSIS based on
established medical standards:
• Permanent Total Disability
• Permanent Partial Disability
• Temporary Total Disability47
d. Policies governing disability benefits.
1. Permanent Total Disability (PTD) - disability due to injury or disease causing complete,
irreversible and permanent incapacity that will permanently disable a member to work or to engage in any
gainful occupation resulting to loss of income.
The following disabilities shall be deemed total and permanent:
a. complete loss of sight for both eyes;
b. loss of two limbs at or above the ankle or wrists;
c. permanent complete paralysis of two limbs;
d. brain injury resulting in incurable imbecility or insanity; and
e. such other cases as may be determined and approved by the GSIS.48
2. Permanent Partial Disability (PPD) - arises due to the complete and permanent loss of the use
of any of the following resulting to the disability to work for a limited period of time:
1. any finger 2. any toe 3. one arm; 4. one hand; 5. one foot; 6. one leg; 7. one or both ears; 8.
hearing of one or both ears; 9. sight of one eye; 10. such other cases as may be determined and
approved by the GSIS.49
3. Temporary Total Disability (TTD) - accrues or arises when the impaired physical and/or
mental faculties can be rehabilitated and/or restored to their normal functions, but such disability shall
result in temporary incapacity to work or to engage in any gainful occupation.50
e. Disability or injury not covered.
Any disability or injury as a result of, or due to grave misconduct, participation in riots, gross
and inexcusable negligence, under the influence of drugs or alcohol or willful intention to injure or kill
himself or another, shall not be compensable.51
f. Actual loss of income.
The actual loss of income shall refer to the number of days when a member went on leave of
absence without pay (LWOP) reckoned immediately from the date of commencement of disability and
for the duration of entitlement thereto, based on medical evaluation. Any LWOP incurred after the
duration of entitlement to the benefit shall not be compensable.52
g. Entitlement in case of two or more different contingencies.
If the member has two or more different contingencies during the same period of benefit
entitlement, he shall be compensated only once for the overlapping periods.53
h. Exclusions by reason of P.D. 626.
All injuries, disabilities, illnesses and all other infirmities compensable under P.D. 626 shall
not be compensable under this Act (R.A. 8291) .54
i. Suspension of benefit.
Any applicable disability benefit shall be suspended when he/she:
a. is re-employed; or
b. recovers from his/her disability as determined by the GSIS, whose decision shall be final
and binding; or
c. fails to present himself for medical examination when required by GSIS; or
d. is receiving any other pension either from GSIS or another local or foreign institution or
organization.55
j. Computation of Benefit.
 1. Permanent Total Disability (PTD) . - A member who becomes permanently and totally
disabled shall be entitled to the monthly income benefits for life equivalent to the basic monthly
pension (BMP) effective from the date of disability.56
2. Permanent Partial Disability (PPD) . - The period of entitlement to PPD benefit shall be
determined after due medical evaluation; but such period of entitlement to the benefit shall not exceed
12 months for the same contingency. Only the leave of absence/s without pay incurred during the
period of entitlement, duly certified by the authorized officer of the agency where he is employed, shall
be compensable. The amount of PPD benefit shall be computed by dividing the BMP by 30 days and
multiplying the quotient by the number of compensable calendar days of leave of absence without pay
(LWOP) .57
3. Temporary Total Disability (TTD) . - The period of entitlement to TTD benefit shall be
determined after due medical evaluation and proof of actual loss of work resulting in loss of income by way
of the incurred actual number of days of leave of absence/s without pay duly certified by the authorized
officer of the agency where he is employed; but such period of entitlement to the benefit shall not exceed
120 days in one calendar year. However, if the disability requires more extensive treatment that lasts
beyond 120 days, the payment of the TTD may be extended by the GSIS but not to exceed a total of 240 days.
Only the leave of absence/s without pay incurred during the period of entitlement shall be
compensable. Entitlement, however, shall start from the fourth day of the disability.
The amount of TTD benefit shall be computed by multiplying 75% of the daily salary of the
member by the number of days of disability based on the medical evaluation but not to exceed 240
days for the same contingency. However, the computed daily salary shall not be less than seventy pesos
(P70.00) but not to exceed P340.00 per day.58
4. For the purpose of computing the corresponding benefit of inactive members for each kind
of disability, the BMP, with respect to PTD and PPD, and daily salary, with respect to TTD, shall be
computed as of the time of separation from GSIS.59
k. Conditions for Entitlement.
1. Permanent Total Disability (PTD) - A member who becomes permanently and totally
disabled shall be entitled to the PTD benefits when:
a. he/she is in the service at the time of disability; or
b. if separated from the service, he has paid at least thirty six (36) months contributions within
the five year (5) period immediately preceding his/her disability; or has paid a total of at
least one hundred eighty (180) months contributions prior to his/her disability;
Provided, however, that the following conditions shall be met:
• he/she is gainfully employed prior to the commencement of disability resulting in loss of
income as evidenced by any incontrovertible proof thereof;
• he/she is not a registered member of any social insurance institution; and
• he/she is not receiving any other pension either from GSIS or another local or foreign
institution or organization.60
In addition to the monthly income benefits for life, a cash payment equivalent to eighteen (18)
times his/her basic monthly pension (BMP) , shall be paid to a member who was in the service at the
time of his/her permanent total disability and who has paid a total of one hundred eighty (180) monthly
contributions.61
A separated member who has at least three (3) years of service and becomes permanently and
totally disabled but has not paid a total of at least one hundred eighty (180) monthly contributions prior
to his/her disability shall be entitled only to cash payment equivalent to one hundred percent (100%) of
his/her average monthly compensation for each year of service with paid contributions but not less than
twelve thousand pesos (P12,000.00).62
2. Permanent Partial Disability (PPD) . - A member whose disability is partial shall be entitled
to the PPD benefit when:
a. he/she is in the service at the time of disability; or
 b. if separated from the service, he has paid at least thirty six (36) months contributions within
the five (5) year period immediately preceding his/her disability; or has paid a total of at
least one hundred eighty (180) months contributions prior to his/her disability; Provided,
however, that the following conditions shall be met:
• he/she is gainfully employed prior to the commencement of disability resulting in loss of income
as evidenced by any incontrovertible proof thereof;
• he/she is not a registered member of any social insurance institution; and
• he/she is not receiving any other pension either from GSIS or another local or foreign
institution or organization.63
3. Temporary Total Disability (TTD) . - A member shall be entitled to the TTD benefit
when:
a. he/she is in the service at the time of disability; or
b. if separated from the service, he has paid at least thirty six (36) months contributions within
the five (5) year period immediately preceding his/her disability; or has paid a total of at
least one hundred eighty (180) months contributions prior to his/her disability; Provided,
however, that the following conditions shall be met:
• he/she is gainfully employed prior to the commencement of disability resulting in loss
of income as evidenced by any incontrovertible proof thereof;
• he/she is not a registered member of any social insurance institution; and
• he/she is not receiving any other pension either from GSIS or another local or foreign
institution or organization.64
The payment of TTD benefit may be extended by the GSIS up to a maximum of two hundred
forty (240) days, subject to medical evaluation.65
l. Forfeiture of disability benefits.
All the foregoing provisions notwithstanding, any member who is enjoying disability benefits shall
automatically forfeit his/her right to the continued enjoyment thereof if he/she refuses or deliberately
fails to:
a. have himself/herself medically treated by a physician when required by the GSIS; or
b. take the prescribed medications ; or
c. have himself/herself confined in a hospital without justifiable reason, when such
confinement is required by the GSIS; or
d. avail himself/herself of such rehabilitation facilities as may be duly recommended by the
GSIS and made available for him/her; or
e. observe such precautionary and/or preventive measures as prescribed by a physician or
expressly required of him/her to prevent the aggravation or continuance of his/her
disability.
However, upon compliance with the requirements, his/her benefits shall be resumed if he/she
is still qualified.66
8. SURVIVORSHIP BENEFITS. 67
a. Survivorship benefits upon death of member or pensioner.
When a member or pensioner dies, the beneficiaries shall be entitled to the following
survivorship benefits, whichever is applicable:
1. Survivorship pension consisting of:
a. the basic survivorship pension which is fifty percent (50%) of the BMP; and
b. the dependent children’s pension equivalent to 10% of the BMP for each child but not to
exceed fifty percent (50%) of the BMP.68
2. Cash payment equivalent to eighteen (18) months BMP; 69
3. Cash payment equivalent to one hundred percent (100%) of the AMC for every year of
service with paid contributions but not less than Twelve Thousand Pesos (P12,000.00) .70
b. Survivorship benefits of members in active service.
 If at the time of death, a member was in the service and has rendered at least fifteen (15) years of
creditable service:
a. his primary beneficiaries shall receive the survivorship pension and cash payment
equivalent to 18 x the BMP; or
b. in the absence of primary beneficiaries, his secondary beneficiaries shall receive the cash
payment equivalent to 18 x the BMP; or
c. in the absence of secondary beneficiaries, the legal heirs shall receive the cash payment
equivalent to 18 x the BMP.71
2. If at the time of death, the member was in the service with less than fifteen (15) years of
creditable service; his primary beneficiaries shall receive the cash payment equivalent to 100% of the
AMC for every year of creditable service.72
c. Survivorship benefits of inactive members.
Primary beneficiaries of inactive members who have at least 15 years of creditable service shall
receive the survivorship pension only.
1. Primary beneficiaries of inactive members who have at least 3 years but less than 15 years
of creditable service and were less than 60 years old at the time of death shall receive the
cash payment equivalent to 100% of the AMC for every year of creditable service, but not
less than P12,000.00.
2. Primary beneficiaries of inactive members who have less than 15 years of creditable service
but were at least 60 years old at the time of separation and have received the corresponding
separation benefit, shall not be entitled to survivorship benefits. However, if the member
has not received yet his separation benefit within four years after his/her separation, the
primary beneficiaries shall receive the cash benefit equivalent to 100% of the inactive
member’s AMC for every year of creditable service, but not less than P12,000.00.73
d. Payment of survivorship benefits.
The survivorship benefits shall be paid as follows:
1. When the dependent spouse is the only survivor, he shall receive the basic survivorship
pension;
2. When only the dependent children are the survivors, they shall be entitled only to the
dependent children’s pension equivalent to 10% of the BMP for every dependent child, not
exceeding five (5) , counted from the youngest and without substitution;
3. When the survivors are the dependent spouse and the dependent children, the dependent
spouse shall receive the basic survivorship pension for life or until he remarries or
cohabits, and the dependent children shall receive the dependent children’s pension.
4. When the dependent spouse and dependent children are already receiving the basic
survivorship pension and dependent children’s pension, respectively, any subsequent
death, emancipation or disqualification of any one of them shall not entitle the other
beneficiaries to the forfeited share.
5. In the absence of a natural guardian, the guardian de facto of dependent children, as well as
the physically or mentally incapacitated dependent children, must file a Petition for
Guardianship to be able to claim the survivorship benefits on behalf of the dependent
children.
6. When the pensioner dies within the 5-year period after receiving the five-year lump sum,
the survivorship pension shall be paid only after the end of the said five-year period.
However, filing of claim for survivorship benefit should be done before the end of the 4-
year prescription period.74
e. Conditions for entitlement to survivorship benefits.
The primary and secondary beneficiaries, except dependent children, shall be entitled to
applicable survivorship benefits, subject to the following:
a. not engaged in any gainful occupation as defined in Sec 2 (p) of R.A. 8291;
b. the surviving spouse and the deceased member were living together as husband and wife;
 c. not gainfully engaged in a business or economic activity (self- employed) ;
d. employed/engaged in a business or economic activity but receiving income less than the
minimum compensation of government employees.
e. not receiving any other pension from the GSIS or another local or foreign institution or
organization; and
f. In the case of the dependent spouse, payment of the basic survivorship pension shall
discontinue when he remarries, cohabits, or engages in common-law relationship.
The foregoing conditions, except the last one, must be present immediately preceding the
death of the member or pensioner.75
9. FUNERAL BENEFITS. 76
a. Nature of benefit.
Funeral benefit is intended to help defray the expenses incident to the burial and funeral of the
deceased member, pensioner or retiree under R.A. 660, R.A. 1616, P.D. 1146 and R.A. 8291.77
b. To whom payable.
It is payable to any qualified individual, in accordance with the following order of priority:
1. Legitimate spouse,
2. Legitimate child who spent for the funeral services, or
3. Any other person who can show incontrovertible proof that he shouldered the funeral
expenses of the deceased.78
c. Amount of funeral benefit.
The amount of funeral benefit are as follows:
1. The prevailing amount approved by the Board of Trustees at the time of death of the
member or pensioner.
2. For uniformed members of the PNP, BJMP and BFP, the amount of funeral benefit is fixed
at P10,000.00.79
d. Conditions for entitlement.
Funeral benefit shall be paid upon the death of:
1. An active member; or
2. A member who has been separated from the service with more than 15 years of creditable
service, but entitled to future separation or retirement benefits; or
3. Old age or disability pensioner; or
4. A retiree who at the time of his retirement is at least 60 years of age and with at least 20
years of service but who opts to retire under R.A. 1616 on or after June 24, 1997; or
5. A member who retired under R.A. 1616 prior to June 24, 1997 with at least twenty (20)
years of service, regardless of age.80
4.
Beneficiaries
1. BENEFICIARIES.
There are two (2) kinds of beneficiaries under the GSIS Law as follows:
1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the
dependent children.
2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on
dependent children, the legitimate descendants.81
2. DEPENDENTS.
Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or pensioner;
(b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is
unmarried, not gainfully employed, not over the age of majority, or is over the age of
 majority but incapacitated and incapable of self-support due to a mental or physical defect
acquired prior to age of majority; and
(c) the parents dependent upon the member for support.82
Gainful Occupation — Any productive activity that provided the member with income at least
equal to the minimum compensation of government employees.83

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Chapter Six
SOCIAL WELFARE LEGISLATION
TOPICS PER SYLLABUS
C. Limited Portability Law (R.A. No. 7699)

C.
LIMITED PORTABILITY LAW
(R.A. No. 7699) 1

1. LIMITED PORTABILITY SCHEME - TOTALIZING THE WORKERS’ CREDITABLE

SERVICES OR CONTRIBUTIONS TO BOTH SSS AND GSIS.
a. Declared policy is to establish a unitary social security system.
It is the declared policy of the State to institute a scheme for totalization and portability of
social security benefits with the view of establishing within a reasonable period, a unitary social
security system.2
b. Rationale.
R.A. No. 7699 was enacted to enable those from the private sector who transfer to the
government service or from the government sector to the private sector to combine their years of
service and contributions which have been credited with the SSS or GSIS, as the case may be, to satisfy
the required number of years of service for entitlement to the benefits under the applicable laws.3
c. Totalization, defined.
The term “totalization” refers to the process of adding up the periods of creditable services or
contributions under each of the Systems, SSS or GSIS, for the purpose of eligibility and computation of
benefits.4
d. Portability, defined.
On the other hand, the term “portability” refers to the transfer of funds for the account and
benefit of a worker who transfers from one system to the other.5
e. Applicability of limited portability scheme. -

The benefits provided under R.A. No. 7699 apply to active or inactive members of either
System (GSIS/SSS) as of the date of its effectivity on May 20, 1994.6
f. Coverage.
R.A. No. 7699 and its implementing rules apply to all worker-members of the GSIS and/or
SSS who transfer from the public sector to the private sector or vice-versa, or who wish to retain their
membership in both Systems.7
g. Creditability and totalization of contributions and benefits in SSS and GSIS.
Under R.A. No. 7699,8 it is enunciated that provisions of any general or special law or rules
and regulations to the contrary notwithstanding, a covered worker who transfers employment from one
sector to another (i. e. , from private sector to public sector, or vice versa) , or is employed in both sectors,
shall have his creditable services or contributions in both Systems (GSIS and SSS) credited to his service or
contribution record in each of the Systems and shall be totalized for purposes of old-age, disability,
survivorship and other benefits in case the covered member does not qualify for such benefits in either or
both Systems without totalization provided, however, that overlapping periods of membership shall be
credited only once for purposes of totalization.
h. Limited portability of funds.
The processes involved in the prompt payment of money benefits to eligible members are the joint
responsibility of the GSIS and SSS.9
The System or Systems responsible for the payment of money benefits due a covered worker
shall release the same within fifteen (15) working days from receipt of the claim, subject to the
submission of the required documents and availability of complete employee/employer records in the
System or Systems.10
i. Totalization of contributions and benefits; how processed.
1. Contributions.
All contributions paid by such member personally and those that were paid by his employers
to both Systems (GSIS and SSS) shall be considered in the processing of benefits which he can claim
from either or both Systems, provided, however, that the amount of benefits to be paid by one System
shall be in proportion to the number of contributions actually remitted to that System.11
The term “contributions” refers to the contributions paid by the employee or worker to either
the GSIS or the SSS on account of the worker’s membership.12
2. Creditable services or periods of contributions.
All creditable services or periods of contributions made continuously or in the aggregate of a
worker under either of the sectors shall be added up and considered for purposes of eligibility and
computation of benefits. (Section 1, Rule V, Rules and Regulations Implementing Republic Act No.
7699) .
The term “creditable services” insofar as the public sector is concerned, refers to the
following:
1. All previous services rendered by an official/employee pursuant to an appointment, whether
permanent, provisional or temporary;
2. All previous services rendered by an official/employee pursuant to a duly-approved
appointment to a position in the Civil Service with compensation or salary;
3. The period during which an official or employee was on authorized sick leave of absence
without pay not exceeding one (1) year;
4. The period during which an official or employee was out of the service as a result of illegal
termination of his services as finally decided by the proper authorities; and
5. All previous services with compensation or salary rendered by elective officials.13
The term “periods of contributions” for the private sector refers to the periods during which a
person renders services for an employer with compensation or salary, and during which contributions
were paid to the SSS. A “self-employed person” is considered an employee and employer at the same
time.14
The term “eligibility” means that the worker has satisfied the requirements for entitlement to
the benefits provided for under R.A. No. 7699.15
3. Benefits.
All services rendered or contributions paid by a member personally and those that were paid
by the employers to either System shall be considered in the computation of benefits which may be
claimed from either or both Systems. However, the amount of benefits to be paid by one System shall
be in proportion to the services rendered or periods of contributions made to that System.16
“Benefits” refer to the following:
1. Old-age benefit;
2. Disability benefit;
3. Survivorship benefit;
 4. Sickness benefit;
5. Medicare benefit, provided that the member shall claim said benefit from the System where
he was last a member; and
6. Such other benefits common to both Systems that may be availed of through totalization.17
j. Totalization; when applicable. - Totalization applies in the following instances:
a. if a worker is not qualified for any benefits from both Systems; or
b. if a worker in the public sector is not qualified for any benefits from the GSIS; or
c. if a worker in the private sector is not qualified for any benefits from the SSS.
For purposes of computation of benefits, totalization applies in all cases so that the
contributions made by the worker-member in both Systems shall provide maximum benefits which
otherwise will not be available. In no case shall the contribution be lost or forfeited.18
Gamogamo v. PNOC Shipping and Transport Corp. 19 - Following the concept of
totalization, the High Court in this casepronounced that obviously, totalization of service credits is only
resorted to when the retiree does not qualify for benefits in either or both of the Systems. In case the
employee is qualified to receive benefits granted by the GSIS or the SSS, as the case may be, he cannot avail
of the benefits under R.A. No. 7699.
k. Effect if worker is not qualified after totalization. - If after totalization, the worker-
member still does not qualify for any benefit as listed in the law,20 the member will then get whatever
benefits correspond to his/her contributions in either or both Systems.21
l. Effect if worker qualifies for benefits in both Systems.
If a worker qualifies for benefits in both Systems, totalization shall not apply.22
m. Processes of totalization; joint responsibility of GSIS and SSS.
The processes of totalization of creditable services or periods of contributions and computation of
benefits provided under R.A. No. 7699 are the joint responsibility of the GSIS and the SSS.23
n. Effect of overlapping periods of creditable services.
Overlapping periods of creditable services or contributions in both Systems shall be credited
only once for purposes of totalization.24
“Overlapping of periods” refers to the periods during which a worker simultaneously
contributes to both Systems.25

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Chapter Six
SOCIAL WELFARE LEGISLATION
TOPICS PER SYLLABUS

D. Employee’s compensation - coverage and when compensable

D.
EMPLOYEE’S COMPENSATION
COVERAGE AND WHEN COMPENSABLE1
1. BACKGROUND ON THE STATE INSURANCE FUND [SIF].
a. SIF created from contributions of employers. - The State Insurance Fund (SIF) is built up by
the contributions of employers based on the salaries of their employees as provided under the Labor Code.
 b. Two (2) separate SIFs. - There are two (2) separate and distinct State Insurance
Funds: one established under the SSS for private sector employees; and the other, under the GSIS for
public sector employees. The management and investment of the Funds are done separately and
distinctly by the SSS and the GSIS. It is used exclusively for payment of the employees’ compensation
benefits and no amount thereof is authorized to be used for any other purpose.2
c. Three (3) agencies involved in the implementation of the ECP. - There are three (3)
agencies involved in the implementation of the Employees’ Compensation Program (ECP) . These
are: (1) The Employees’ Compensation Commission (ECC) which is mandated to initiate, rationalize
and coordinate policies of the ECP and to review appealed cases from (2) the Government Service
Insurance System (GSIS) and (3) the Social Security System (SSS) , the administering agencies of
the ECP.
d. Role of the GSIS and SSS. - As administering agencies of the ECP, both GSIS and SSS are
tasked to:
1. Evaluate all employees compensation (EC) claims filed within a given period and pay the
corresponding EC benefits;
2. Collect EC premiums remitted by employers; and
3. Manage the State Insurance Fund.
Both the GSIS and the SSS invest the funds in profitable ventures to generate earnings which will
form part of the State Insurance Fund (SIF) from which payments for employees’ compensation claims are
sourced.
e. Role of the ECC. -The law applies the social security principle in the handling of
workmen’s compensation. Towards this end, the Employees’ Compensation Commission (ECC)
administers and settles claims from a fund under its exclusive control. The employer does not intervene in the
compensation process and it has no control, as in the past, over payment of benefits. The open -
ended Table of Occupational Diseases requires no proof of causation. A covered claimant suffering from an
occupational disease is automatically paid benefits.
f. Role of the employer. - On the part of the employer, its duty is only to pay the regular monthly
premiums to the System (GSIS/SSS) . It does not look for insurance companies to meet sudden demands
for compensation payments or set up its own funds to meet those contingencies. It does not have to defend
itself from spuriously documented or long past claims.
g. Role of the employee. - The injured worker does not have to litigate his right to
compensation. There is no notice of injury or requirement of controversion. The sick worker is simply required
to file a claim with the ECC which determines, on the basis of the employee’s supporting papers and
medical evidence, whether or not compensation should be paid. The payment of benefits is more prompt ad the
cost of administration is low.
The employer no longer opposes or fights a claim for compensation by the employee.
Resultantly, the lop-sided situation of an employer against one employee is absent.3
2. SCOPE OF COVERAGE OF THE ECP.
a. General coverage. - The following shall be covered by the Employees’ Compensation
Program (ECP) :
1. All employers;
2. Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System
(GSIS/SSS) prior to age sixty (60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily
covered by both Systems.4
b. Sectors of employees covered by the ECP. - The following sectors are covered under the
ECP:
1. All public sector employees including those of government-owned and/or controlled
corporations and local government units covered by the GSIS;
2. All private sector employees covered by the SSS; and
3. Overseas Filipino workers (OFWs) , namely:
a. Filipino seafarers compulsorily covered under the SSS.
 b. Land-based contract workers provided that their employer, natural or juridical, is
engaged in any trade, industry or business undertaking in the Philippines; otherwise,
they shall not be covered by the ECP.
c. Start of coverage of employees under the ECP. - The coverage under the ECP of
employees in the private and public sectors starts on the first day of their employment.
d. Nature of coverage. - The coverage is compulsory in nature.5
3. EMPLOYEES’ COMPENSATION BENEFITS.
The following are the benefits provided under the Labor Code:
a. Medical Benefits6
b. Disability Benefits7
1. Temporary total disability8
2. Permanent total disability9
3. Permanent partial disability10
c. Death Benefit11
d. Funeral Benefit12
3.1. MEDICAL BENEFITS.
a. Conditions for entitlement to medical services, appliances and supplies. - Any
employee is entitled to such medical services, appliances and supplies as the nature of his disability and
the progress of his recovery may require, subject to the expense limitation as contained inAnnex “C” of
the Amended Rules on Employees‟ Compensation, if all of the following conditions are satisfied:
1. He has been duly reported to the System (GSIS/SSS) ;
2. He sustains an injury or contracts sickness; and
3. The System has been duly notified of the injury or sickness.13
b. Period of entitlement. - The medical services, appliances and supplies are required to be
provided to the afflicted employee beginning on the first day of injury or sickness, during the
subsequent period of his disability, and as the progress of his recovery may require.14
The obligation of the SIF to provide medical services shall continue for as long as the
employee is sick. This duty is not ended even if employment was terminated.15
c. Extent of services. - The employee is entitled to the benefits only for the ward services of
an accredited hospital and accredited physician. However, if the employee chooses accommodations
better than ward services, the excess of the total amount of expenses incurred over the benefits
provided under Annex “C” of the Amended Rules on Employees‟ Compensation (infra) , shall be borne
by the employee.16
The hospital shall provide all the medicines, drugs or supplies necessary for the treatment of the
employee at a cost not exceeding the retail prices prevailing in local drug stores.17
Payments shall be made directly to the providers of such services in such amount as are
prevailing in the community for similar services or provided under the schedule set forth in said Annex
“C,” whichever is less.18
The right of the employee to seek reimbursement for medical expenses does not only pertain to those
incurred for the principal or primary ailment but extends to those incurred for complications arising
therefrom even if the same occurred after the employee had already retired.
d. Loss of wages or earning capacity not required. - It is worthy to note that Article 185
does not impose as a pre-requisite for the grant of medical benefits, that the injured or sick employee
should show proof that he suffered loss of wages or earning capacity as a result of such injury or
sickness. The law is clear that the injured or sick employee is “immediately” entitled to be provided
during the subsequent period of his disability, with such medical services and appliances as the nature
of his sickness or injury and progress of his recovery may require.19
3.2. TEMPORARY TOTAL DISABILITY.
 a. Total disability, when temporary. - A total disability is temporary if, as a result of the
injury or sickness, the employee is unable to perform any gainful occupation for a continuous period of
not exceeding 120 days, except when such disability still requires medical attendance beyond 120
days, but not to exceed 240 days.20
If the disability is the result of an injury or sickness, the period of compensability shall be
counted from the first day of such injury or sickness.
An employee who later had to stop working due to a compensable illness is also entitled
to temporary total disability benefits.21
b. Conditions to entitlement in case of temporary total disability. An employee shall be
-

entitled to an income benefit for temporary total disability if all of the following conditions are
satisfied:
1. He has been duly reported to the System (GSIS/SSS) ;
2. He sustains the temporary total disability as a result of the injury or sickness; and
3. The System has been duly notified of the injury or sickness which caused his disability.
His employer shall be liable for the benefit if such illness or injury occurred before the
employee is duly reported for coverage to the System (GSIS/SSS) .22
c. When to commence payment of benefits. - The income benefit in the case of temporary
total disability should be paid beginning on the first day of such disability. If caused by an injury or
sickness, it should not be paid longer than 120 consecutive days except where such injury or sickness
still requires medical attention beyond 120 days but not to exceed 240 days from the onset of the
disability, in which case, benefit fortemporary total disability shall be paid. However, the System
(GSIS/SSS) may declare the total and permanent status at any time after 120 days of
continuous temporary total disability as may be warranted by the degree of actual loss or impairment
of physical or mental functions as determined by the System (GSIS/SSS) .23
d. Cash payment of temporary total disability benefit. - Temporary total disability
resulting from the injury or sickness is compensable by cash payments and not the injury or sickness
itself.24
e. Income benefit for temporary total disability. - Any employee entitled to the benefit
for temporary total disability shall be paid an income benefit equivalent to ninety percent (90%) of
his average daily salary credit as determined by the System (GSIS/SSS) , subject to the following
conditions:
1. The income benefit shall not be more than P200.00 per day for private sector workers and
P90.00 per day for public sector employees and shall not be paid longer than 120 days for the
same disability unless the injury or sickness requires more extensive treatment that lasts
beyond 120 days but not to exceed 240 days from the onset of the disability, in which case, he
shall be paid benefit for temporary total disability during the extended period.
2. The monthly income benefit shall be suspended if the employee fails to submit a monthly
medical report certified by his attending physician as required under the Amended Rules on
Employees‟ Compensation.25
An employee enjoying temporary total disability benefits shall submit to the
System (GSIS/SSS) a monthly medical report on his disability certified by his attending
physician; otherwise, his benefit shall be suspended until such time that he complies with this
requirement. Further, he must also submit himself for examination upon being notified by the
System (GSIS/SSS) , at least once a year.26
3.3. PERMANENT TOTAL DISABILITY.
a. Permanent disability, defined. - “Permanent disability” is the inability of a worker to
perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his
body.27
b. Total disability, defined. - “Total disability,” on the other hand, means disablement of an
employee to earn wages in the same kind of work, or work of a similar nature that he was trained for,
or accustomed to perform, or any kind of work which a person of his mentality and attainment could
do.28
 Total disability is lack of ability to follow continuously some substantial gainful occupation
without serious discomfort or pain and without material injury to health and danger to life.29
Total disability does not mean a state of absolute helplessness. A total disability does not
require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the
injury must be such that the employee cannot pursue his usual work and earn therefrom.30
c. Disability, when total and permanent. - A disability is total and permanent if, as a result
of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous
period exceeding 120 days.31
Moreover, the fact that the permanently and totally disabled employee continues to work after
such disability does not deprive him of the benefits provided under the law.32
For what is important consideration is the inability to do substantially all material acts
necessary for the prosecution of a gainful occupation without serious discomfort or pain and without
material injury or danger to life. In disability compensation, it is not the injury per se which is
compensated but the incapacity to work.33
Disability is intimately related to one’s earning capacity. The test to determine its gravity is
the impairment or loss of one’s capacity to earn and not its mere medical significance.
Seagull Maritime Corp. v. Dee. 34 - It was held in this case that although private
respondent’s injury was undeniably confined to his left foot only, however, the inescapable impact of private
respondent’s injury on his capacity to work as a seaman cannot be disregarded. In their desire to escape
liability from private respondent’s rightful claim, petitioners denigrated the fact that even if private
respondent insists on continuing to work as a seaman, no profit-minded employer will hire him. His injury
erased all these possibilities.
GSIS v. Cadiz. 35 - It was declared in this case that the fact that the employee did not lose the
use of any part of his body does not justify the denial of his claim for permanent total disability.
GSIS v. CA. 36 - The High Court held here that while permanent total disability invariably
results in an employee’s loss of work or inability to perform his usual work, permanent
partial disability occurs when an employee loses the use of any particular anatomical part of his body
which disables him to continue with his former work. Stated otherwise, the test of whether or not an
employee suffers from permanent total disability is the capacity of the employee to continue
performing his work notwithstanding the disability he incurred. If by reason of the injury or sickness he
sustained, the employee is unable to perform his customary job for more than 120 days and he does not
come within the coverage of Rule X of the Amended Rules on Employees Compensation (which, in a
more detailed manner, describes what constitutes temporary total disability) , then the said employee
undoubtedly suffers from a permanent total disability regardless of whether or not he loses the use of
any part of his body. Permanent total disability does not mean a state of absolute helplessness, but
means disablement of an employee to earn wages in the same kind of work, or work of similar nature
that he was trained for, or any work which a person of similar mentality and attainment could do.
d. Total disabilities considered permanent. - The following total disabilities are
considered permanent:
1. Temporary total disability lasting continuously for more than 120 days and prevents an
employee from pursuing his usual work and earning therefrom.37
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankles or wrists;
4. Permanent and complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility or insanity; and
6. Such cases as determined by the System (GSIS/SSS) and approved by the ECC.38
Palisoc v. Easways Marine, Inc. 39 - The petitioner here was unable to perform his job for
more than 120 days from the time of his repatriation which entitles him to permanent disability
benefits. Thus, even in the absence of an official finding by a company-designated physician that
petitioner is unfit for sea duty, he is deemed to have suffered permanent disability because of his
inability to work for more than 120 days. The Court of Appeals erred in ruling that petitioner’s
operation involving the removal of his gallbladder is not a compensable injury, disease, or illness under
Appendix 1 of the POEA-SEC. Permanent disability refers to the inability of a worker to perform his
job for more than 120 days, regardless of whether he loses the use of any part of his body. What
determines petitioner’s entitlement to permanent disability benefits is his inability to work for more
than 120 days.
 e. Litmus test and distinction between permanent total disability and permanent partial
disability.
In Vicente v. ECC. 40 - The Supreme Court laid down the litmus test and distinction
between Permanent Total Disability and Permanent Partial Disability, to wit:
―[W]hile „permanent total disability‟ invariably results in an employee’s loss of work
or inability to perform his usual work, „permanent partial disability,‟ on the other hand,
occurs when an employee loses the use of any particular anatomical part of his body which
disables him to continue with his former work. Stated otherwise, the test of whether or not an
employee suffers from „permanent total disability‟ is a showing of the capacity of the
employee to continue performing his work notwithstanding the disability he incurred. Thus, if
by reason of the injury or sickness he sustained, the employee is unable to perform his
customary job for more than 120 days and he does not come within the coverage of Rule X of
the Amended Rules on Employees Compensability (which, in a more detailed manner,
describes what constitutes temporary total disability) , then the said employee undoubtedly
suffers from „permanent total disability‟ regardless of whether or not he loses the use of any
part of his body.” 41
f. Requisites for entitlement to income benefit for permanent total disability. - An
employee is entitled to an income benefit forpermanent total disability if all of the following conditions are
satisfied:
1. He has been duly reported to the System (GSIS/SSS);
2. He sustains the permanent total disability as a result of the injury or sickness; and
3. The System has been duly notified of the injury or sickness which caused his disability.
His employer shall be liable for the benefit if such injury or sickness occurred before the
employee is duly reported for coverage to the System (GSIS/SSS) .42
g. ECC Board Resolution No. 98-09-0563 [September 25, 1998]. - This enunciated the
following conditions that should be taken into account in considering disability as permanent, in addition
to the existing rules and regulations relative to permanent total disability, and in consonance with the Supreme
Court’s pronouncement on liberal construction in disability claims cases:
1. If the disability results to disablement of an employee or worker to earn wages in the same
kind of work, or work of similar nature that he/he was trained for;
2. If the disability results to disablement of an employee or worker to earn wages in any kind
of work which a person of his mentality and attainment could do;
3. If the disability results to the inability of an employee or worker to do substantially all
material acts necessary to the prosecution of an occupation for remuneration or profit in
substantially customary and usual manner;
4. If the disability results to the lack of ability of an employee or worker to follow
continuously the same substantial gainful occupation without serious discomfort or pain
and without injury or danger to life;
5. If an employee or worker is compelled to retire or cease from employment before reaching
the age of compulsory retirement by reason of work-related contingency;
6. If, after retirement, an employee or worker dies within a reasonable period of time, and the
cause of his death is the disability ailment or injury, in which event, his disability shall be
considered permanent and total;
7. If the temporary and total disability shall last continuously for more than 120 days, except
as otherwise provided in Rule X of the existing implementing rules and regulations of P.D.
No. 626, as amended.
Garcia v. Compensation Appeals and Review Staff.43 - The denial of permanent
total disability benefits to the claimant in this case,who was a school teacher with thirty-eight (38)
years of dedicated service, would render inutile and meaningless, the social justice precept guaranteed
by the Constitution. The claimant is entitled not only to partial disability but to full compensation
because her illness rendered her incapable of teaching. That claimant’s employment had contributed
even in a small degree to the development of the disease is enough for compensability of claim.44
 h. Payment for all compensable months of disability. - In case of permanent total
disability, the full monthly income benefits should be paid for all compensable months of disability.45
i. Effect of cessation of grant of employees’ compensation benefits to entitlement to
benefits for the same disability in another law being administered by the System. - After the
benefit under the Employees’ Compensation Program (ECP) has ceased, and if the employee is
otherwise qualified for benefit for the same disability under another law administered by the System
(GSIS/SSS) , he should be paid such benefit in accordance with the provisions of that law. This rule
applies to contingencies which occurred prior to May 1, 1978.46
j. 5-year guaranteed monthly income benefits; grounds for suspension of grant of
benefits. - Except as otherwise provided in other laws, decrees, orders or letters of instructions, the
monthly income benefit is guaranteed for five (5) years and shall be suspended under any of the
following conditions:
1. Failure to present himself for examination at least once a year upon notice by the System;
2. Failure to submit a quarterly medical report certified by his attending physician as required
under Section 5, Rule IV of the Amended Rules on Employees‟ Compensation;
3. Complete or full recovery from his permanent disability; or
4. Upon being gainfully employed.47
Said Section 5 of Rule IV of the Amended Rules provides that an employee
enjoying permanent disability benefit where the disability resulted from a disease should submit to the System
(GSIS/SSS) a quarterly medical report on his disability certified by his physician; otherwise his benefit shall
be suspended until such time that he complies with this requirement.
k. Cash payment of permanent total disability benefit. - Permanent total disability
resulting from the injury or sickness is compensable by cash payments and not the injury or sickness
itself.48
l. Monthly income benefit. - Any employee entitled to permanent total disability benefits
shall be paid by the System (GSIS/SSS) a monthly income as defined in Section 9, Rule VI of
the Amended Rules on Employees‟ Compensation.49
1. In the case of the SSS.
In the case of the SSS, the monthly income benefit is the amount equivalent to one hundred
fifteen percent (115%) of the sum of the average monthly salary credit multiplied by the replacement
ratio and one and a half percent (1-1/2%) of the average monthly salary credit for each credited year of
service in excess of ten (10) years; provided, that the monthly income benefit shall in no case be less
than P250.00; provided, however, that the monthly pension of surviving pensioners shall be increased
automatically and simultaneously to the extent that the fifteen percent (15%) difference in monthly
income benefit between EC and SS and the twenty percent (20%) difference in monthly income benefit
between EC and GSIS, should be maintained.50
2. In the case of the GSIS.
In the case of the GSIS, the monthly income benefit shall be the basic monthly pension as
defined in P, D. No. 1146 [May 31, 1977] plus twenty percent (20%) thereof, but shall not be less than
P250.00 nor more than the actual salary at the time of contingency.51
m. Amount of benefit for dependent children. - Under Section 4, Rule XI of the Amended Rules
on Employees‟ Compensation, it is provided that each dependent child, but not exceeding five (5) , counted
from the youngest and without substitution, shall be entitled to ten percent (10%) of the monthly income
benefit of the employee. The Amended Rules on Employees Compensation, however, shall not apply to causes
of action which accrued before May 1, 1978.
Except the benefit to dependent children under said Section 4 of Rule XI of the Amended
Rules on Employees‟ Compensation, the aggregate monthly benefit payable, in the case of the GSIS,
shall in no case exceed the monthly wage or salary actually received by the employee as of the date of
his permanent total disability per ECC Resolution No. 2819 dated August 9, 1984.52
3.4. PERMANENT PARTIAL DISABILITY.
a. Disability, when partial and permanent. - A disability is partial and permanent if, as a
result of the injury or sickness, the employee suffers a permanent partial loss of the use of any part of
his body.53
 b. Requisites for entitlement. - An employee shall be entitled to an income benefit
for permanent partial disability (PPD) if all of the following conditions are satisfied:
1. He has been duly reported to the System (GSIS/SSS) ;
2. He sustains the permanent partial disability as a result of the injury or sickness; and
3. The System has been duly notified of the injury or sickness which caused his disability.
His employer shall be liable for the benefit if such injury or sickness occurred before the
employee is duly reported for coverage to the System (GSIS/SSS).54
c. Effect of gainful employment. - For purposes of entitlement to income benefits
for permanent partial disability, a covered employee shall continue to receive the benefits provided
thereunder even if he is gainfully employed and receiving his wage or salary.55
d. Income benefit in case of permanent partial disability (PPD) - Permanent
partial disability is the exception to the rule that disability resulting from the injury or sickness is
compensable by cash payments and not the injury or sickness itself.56
Consequently, in the case where the period covered for payment of income benefit for PPD
does not exceed twelve (12) months, the System (GSIS/SSS) may pay in lump sum; otherwise the
income benefit shall be paid in monthly pension.57
In other words, if the indicated number of months exceeds twelve (12) , the income benefit
should be paid in monthly pension; otherwise, the System may pay the income benefit in lump sum or
in monthly pension.58
Under ECC Board Resolution 93-08-0068 issued on August 5, 1993, permanent
partial disability benefit is granted up to a maximum of two hundred forty (240) days if the claimant's
disability persist exceeding the 120-day limit.
Any employee entitled to PPD benefit shall be paid by the System (GSIS/SSS) a monthly
income benefit for the number of months indicated inSection 2, Rule XII of the Amended Rules on
Employees‟ Compensation [See Schedule below].59
e. Schedule of income benefit payment. - Under said Section 2, Rule XII of the Amended Rules
on Employees‟ Compensation, the income benefit shall be paid beginning with the first month of such
disability, but no longer than the designated number of months in the following schedule:
Complete and Permanent Loss
of the use of No. of Months
one thumb - 10
one index finger - 8
one middle finger - 6
one ring finger - 5
one little finger - 3
one big toe - 6
any toe - 3
one hand - 39
one arm - 50
one foot - 31
one leg - 46
one ear - 10
both ears - 20
hearing of one ear - 10
 hearing of both ears - 50
sight of one eye - 2560

In case of permanent partial disability less than the total loss of the member, the same
monthly income shall be paid for a portion of the period established for the total loss of the member in
accordance with the proportion that the partial loss bears to the total loss. If the result is a decimal
fraction, the same shall be rounded off to the next higher integer.61
In case of simultaneous loss of more than one member or a part thereof, the same monthly
income shall be paid for a period equivalent to the sum of the periods established for the loss of the
member or part thereof but not exceeding seventy-five (75) . If the result is a decimal fraction, the same
shall be rounded off to the higher integer.62
The degree of permanent disability shall be equivalent to the ratio that the designated number
of months of compensability bears to seventy-five (75).63
f. Consequence of loss of a part of body. - The following rules shall apply in case of loss of a part
of the employee’s body:
1. A loss of a wrist is considered a loss of the hand;
2. A loss of an elbow is considered a loss of the arm;
3. A loss of an ankle is considered a loss of the leg;
4. A loss of more than one joint is considered a loss of the whole finger or toe; and
5. A loss of only the first joint shall be considered a loss of one-half of the whole finger or toe.
Other permanent partial disabilities shall be determined by the Medical Officer of the System
(GSIS/SSS) .64
g. Unlisted injuries and illnesses (non-scheduled disabilities) . - In cases of injuries or
illnesses not listed in the schedule underSection 2, Rule XII of the Amended Rules on Employees‟
Compensation [supra], the benefit shall be an income benefit equivalent to the percentage of the
permanent loss of the capacity for work.65
3.5. DEATH BENEFIT.
a. Death, meaning. - Within the context of the employees’ compensation program, the
term “death” means loss of life resulting from an injury or sickness.66
b. Compensable death. - “Compensable death” refers to death which is the result of a workrelated
injury or sickness.
c. Proof required in order for death to be compensable. - Death compensation benefit cannot
be awarded unless there is substantial evidence showing that:
(a) The cause of the employee’s death was reasonably connected with his work; or
(b) The sickness for which he died is an accepted occupational disease; or
(c) His working conditions increased the risk of contracting the disease for which he died.67
d. Income benefit in case of death. - Death resulting from the injury or sickness is
compensable by cash payments and not the injury or sickness itself.68
The monthly income benefit provided under Article 194 of the Labor Code is the new amount
of the monthly income benefit for the surviving beneficiaries upon the approval of P.D. No. 1368 [May
1, 1978] which introduced amendments to Title II, Book IV of the Labor Code.69
e. Requisites for entitlement to death benefit. - The beneficiaries of a deceased employee shall be
entitled to an income benefit if all of the following conditions are satisfied:
1. The employee had been duly reported to the System (GSIS/SSS) ;
2. He died as a result of an injury or sickness; and
3. The System has been duly notified of his death, as well as the injury or sickness which
caused his death.
His employer shall be liable for the benefit if such death occurred before the employee is duly
reported for coverage to the System (GSIS/SSS).70
 f. Death to be compensable must occur while in the performance of job; exception. -
Under the law on employees’ compensation, death is compensable only when it results from a work-
connected injury or sickness.71
Lu v. WCC.72 - It was ruled in this case that the benefits of the Workmen’s Compensation Act
for the death of the employee cannot be extended to the claimant since it did not occur while in the
performance of his duties as a gasoline attendant.
Tolosa v. ECC,73 - It was pronounced here that the employee’s widow is not entitled to death
benefits because her husband had stopped working when he became physically disabled to do his work
at the time of his retirement in 1975 and death on February 14, 1984, or almost nine (9) years after,
which is clearly not within the two-year period required by the old Workmen’s Compensation Act.
But in Manuzon v. ECC.74 - The dependents were held entitled to the benefits from the
employee’s death which occurred about 4 ½ years after retiring from the service due to a stroke, a
cardiovascular accident caused by thrombosis. This is so because although the death occurred after the
retirement, the cause of death, myocardial infarction, is closely related to the cause of his compulsory
retirement.
In the 2004 case of GSIS v. Cuanang,75 the employee died a year after retirement. The
Supreme Court held that indeed, if the death which occurred almost 4 ½ years after retirement was held
to be within the coverage of the death benefits under P.D. 626, as in the Manuzon case, with more
reason should the death which occurred within one year after retirement be considered as covered
under the same law. A claim for benefit for such death cannot be defeated by the mere fact of
separation from service.76
g. Death of a member while under permanent partial disability. - Upon the death of a covered
member during the period that he/she was receiving permanent partial disability (PPD) benefits, the
remainder of his PPD benefits shall be paid to his primary beneficiaries. However, the beneficiaries shall
be entitled to the same benefits enjoyed by the beneficiaries of a permanent total disability (PTD)
pensioner upon his death, provided that the cause of death was the same illness or injury for which he/she was
awarded PPD benefits.
h. Additional requisites; proof of marriage. - If the employee has been receiving monthly
income benefit for permanent total disability at the time of his death, the surviving spouse must show
that the marriage has been validly subsisting at the time of his disability.77
i. Material date to determine the amount of death compensation benefits. - It is well-
settled that the material date to determine the amount of death compensation benefits is the date of the
death of the employee and not the amount provided by law at the time of payment.78
j. Period of entitlement to death benefit.
1. For primary beneficiaries.
The income benefit for primary beneficiaries shall be paid beginning at the month of death and
shall continue to be paid for as long as the beneficiaries are entitled thereto.
The monthly income benefit shall be guaranteed for 5 years which in no case shall be less
than P15,000.00. Thereafter, the beneficiaries shall be paid the monthly income benefit for as long as
they are entitled thereto.79
2. For secondary beneficiaries.
The income benefit for secondary beneficiaries shall be sixty (60) times the monthly income
benefit of a primary beneficiary which in no case shall be less than P15,000.00 which shall likewise be
paid as monthly pension.80
k. Presumptive death.
1. When death benefits should be paid.
Payment of death benefits shall be reckoned from the date a worker was declared
presumptively dead after he/she had been reported missing for sometime, by proper authority, in
accordance with law; except when the declaration of death specified another date, in such a case,
payment of death benefits shall start from the latter date.81
2. Entitlement to funeral benefits.
 The beneficiaries shall be entitled to funeral benefits as provided for under the law, even
though the body of a missing person had not been recovered and that no burial activities had been
undertaken.
l. Death benefits, not part of the estate of the deceased.
The death benefits being paid under the law are not part of the deceased’s estate. They are not in the
nature of inheritance. They are granted by operation of law as financial compensation and aid for the death of
the employee.
It must be noted that the dependents mentioned in the law are not referred to as the
“heirs” but rather as “beneficiaries.” It may be further observed that the dependents are not necessarily
the “heirs” of the deceased, as this term is understood in civil law.
3.6. FUNERAL BENEFIT UNDER THE LABOR CODE.
a. Entitlement to funeral benefit. - A funeral benefit of P3,000.00 shall be paid upon the death of
a covered employee or a permanently totally disabled pensioner to one of the following:
1. The surviving spouse; or
2. The legitimate child who spent for the funeral services; or
3. Any other person who can show incontrovertible proof of his having borne the funeral
expenses.82
b. Increases in the amount of funeral benefit.
1. The amount of funeral benefit was increased from P3,000.00 as provided in the Labor Code
and its implementing rules, to P6,000.00.83
2. Subsequently, in 1992, the amount of funeral benefit to private sector employees was
increased to P8,000.00 effective May 1, 1992.84
3. Effective May 1, 1994, the funeral benefit was increased to P10,000.00 for the private sector
and P3,000.00 for the public sector.
c. Effect of denial of death benefit on entitlement to funeral benefit. - The denial of the
death benefit being claimed has an adverse effect on the claim for funeral benefit. The Supreme Court
in the case of Tolosa v. ECC,85 held that the widow is not entitled to funeral benefit in view of its
ruling that she is not entitled to death benefit.
4. DEPENDENCY.
a. Dependency, meaning. - The term “dependency” does not mean absolute dependency for the
necessities of life but rather, that the dependent looked to and relied on the contribution of the claimant, in
whole or in part, as a means of supporting and maintaining himself in accordance with his station in life.
Under this concept, a person may be considered a dependent although he is able to maintain
himself without any assistance from the decedent.86 For instance, the legitimate spouse may be
gainfully employed himself or herself but he/she is considered a dependent for as long as he/she is living
with the deceased employee at the time of the occurrence of death.
b. Test of dependency. - There is no uniform test to ascertain dependency. What the law imposes
is that the dependency relationship should exist at the time of the occurrence of the injury. What would be
ordinary necessity and comfort for one person may not necessarily apply to another. However, such factors as
standards of living, station in life, the necessity and comfort required and the like, may prove helpful in
determining dependency.
Total or partial dependency is a question of fact which may be established by appropriate
evidence. In Paragatos v. Barredo,87 the Supreme Court ruled that based on the evidence presented,
the plaintiff-parent was partially dependent upon his son for support, taking into account the
circumstances and conditions prevailing in the country where any amount sent by a son to his father who
lives in the rural area and who can hardly provide for the needs of his minor children is sufficient evidence of
partial dependency.
c. Classification of dependency. - Dependency may be classified as follows:
i. As to the amount - partial or total; or
ii. As to status - legal or actual.
 1. Partial dependency.
A partial dependent is a person who has some means or income of his own and who receives less
than all of his support from the employee. If the contributions from the employee enable him to live in
accordance with his station in life, without which he could not live in accordance therewith, such person is
a partial dependent.
2. Total dependency.
A total dependent is one who has no means of support and entirely depends for support upon the
contribution from the employee or one who may have an income from other sources but the amount of which
is too small and insignificant as would enable him to support himself without the major support from the
employee.
3. Legal dependency.
Legal dependency proceeds from the mandate or operation of the law, irrespective of the ability
of the dependent to support himself. This type of dependency, having been established by operation of
law, is conclusive.
4. Actual dependency.
Under this type of dependency, the reasonable expectation of continuing support appears to be the
general and important criterion to consider. An actual dependent, therefore, is one who looked to the
employee for support, partially or wholly.
d. Specific dependents under the Labor Code.
1. Dependents provided under the Labor Code.
Under the Labor Code, the term “dependent” refers to the following:
a. The legitimate, legitimated or legally adopted or acknowledged natural child who is
unmarried, not gainfully employed, and not over twenty-one (21) years of age or over
twenty-one (21) years of age provided he is incapacitated and incapable of self-support
due to a physical or mental defect which is congenital or acquired during minority;
b. The legitimate spouse living with the employee; and
c. The parents of said employee wholly dependent upon him for regular support.88
2. Children as dependents.
The children referred to as dependents under the law are:
1. Legitimate children;
2. Legitimated children;
3. Legally-adopted children; and
4. Acknowledged natural children.
As a general rule, minor children of the deceased employee are conclusively presumed to be
dependents.
As far as children of majority age are concerned, they should prove their dependency in
accordance with the requirements of the law. Thus, a child who is over 21 years of age may still be
considered dependent if he satisfies the two (2) requirements as follows:
i. He is incapacitated; and
ii. Incapable of self-support due to a physical or mental defect which is congenital or acquired
during minority.89
Under the old Workmen’s Compensation Act, as amended, stepchildren as well
as brothers and sisters of the deceased employee are considered dependents. However, under the Labor
Code, reference to them is absent. Therefore, they should no longer be considered as dependents.
As far as illegitimate children are concerned, paragraph [i] of Article 167 of the Labor Code
defining the term “dependent” does not mention or make reference to them as dependents. However,
paragraph [j] thereof and Section 1 [c], Rule XV of the Amended Rules on Employees‟ Compensationtreat
illegitimate children as secondary beneficiaries.
Legally-adopted children, to be considered dependents, must have been judicially-decreed as
such prior to the occurrence of the injury and death of the deceased employee. Without judicial
pronouncement on the adoption, as when the child was merely taken into the home and treated as a
member of the family, would not be sufficient for purposes of entitlement to the benefits.
3. Legitimate spouse as dependent.
At the outset, it bears stressing the fact that, unlike the old Workmen’s Compensation Act where
Sections 9 and 10 thereof explicitly made a distinction between “widow” and “widower” in terms of
entitlement to benefits, the Labor Code uses the generic term “spouse” which may refer either to a widow
(wife) or a widower (husband) .
In order for the widowed spouse of the deceased employee to be entitled to compensation benefits,
the law imposes the following requirements:
1. He/she is a legitimate spouse; and
2. He/she should be living with the deceased employee at the time of death.
A widowed spouse is, as a general rule, conclusively presumed to be a dependent when living
with the deceased at the time of the latter’s death, irrespective of whether he/she is gainfully employed.
The only time when this conclusive presumption does not attach is when the surviving spouse
is not the legitimate spouse or is voluntarily living apart from the deceased employee at the time of
death.
In case there are two (2) wives claiming the benefits under the law, the Workmen’s (now
Employees’) Compensation Commission, according to the Supreme Court, is empowered to rule on the
issue of who is the legitimate spouse who shall be awarded the benefits. The Commission may act as
referee and arbitrator to help the two (2) claimants reach an amicable settlement.90
In case the legitimate surviving spouse was living separately from the deceased employee at
the time of death, he/she may be treated as dependent if such separation was necessary and justified as
when the same was caused by health or business reasons or because of the fault of the deceased spouse.
Under these situations, it is believed that the conclusive presumption of dependency should still apply.
In Vda. de Makabenta v. Davao Stevedore Terminal Company,91 a marriage celebrated in
a hospital where the deceased employee was confined after the fatal accident where he sustained the
injury but before his death, was held sufficient for purposes of determining the dependency of the wife.
For three (3) months prior to such marriage, they were already living together as common-law husband
and wife.
4. Policy on surviving spouse.
A policy92 has been enunciated as regards surviving spouse found not to be living with the
covered employee at the time the employee died. Said surviving spouse is entitled to employees'
compensation benefits provided that the separation occurred owing to any of the following
circumstances:
1. Refusal of the covered employee to continue living with the surviving spouse; or the
employee's abandonment of the said spouse, without justifiable or valid cause;
2. Attempt of the covered employee against the life of the surviving spouse, common
child/children of the spouse;
3. Commission of an act of sexual abuse against the surviving spouse, common child/children
of the spouse;
4. The covered employee's recurrent commission of physical violence, or grossly, abusive
conduct, against the surviving spouse, common child/children of the spouse;
5. The covered employee's infliction of physical violence, or imposition of moral duress, to
compel the surviving spouse, common child/children or child/children of the spouse to
change their religious or political affiliation;
6. Attempt of the covered employee to corrupt or induce the surviving spouse, common
child/children or child/children of the spouse to engage in prostitution, or to make them
connive with the employee in such an act of corruption or inducement;
7. Drug addiction or habitual alcoholism of the covered employee;
8. Lesbianism or homosexuality of the covered employee;
9. Contraction of bigamous marriages by the covered employee, whether in the Philippines or
abroad;
10. Sexual infidelity or perversion of the covered employee;
 11. The covered employee's act of allowing the surviving spouse, common child/ children or
child/children of the spouse to be subjected to acts of lasciviousness; and
12. The covered employee's contraction of serious sexually transmitted disease extra-
maritally.
5. Parents of deceased employee as dependents.
In order for the parents of the deceased employee to qualify as dependents, the law simply
imposes one (1) requirement, i.e. , that they arewholly and not partially, dependent upon the latter for
regular support. Living with the deceased employee is not a requirement. The conclusive presumption
applicable to the other dependents is not followed in the case of parents. Consequently, the burden of proof
is upon such parents to prove dependency.
As to what is meant by “regular support,” the law and the implementing rules failed to define or
describe it. However, such regularity of support which is certainly a question of fact may be inferred from the
peculiar facts of a case.
In Malate Taxicab v. Del Villar,93 the parents were considered dependents despite the
substantial income of the father who is an accountant earning P300.00 per month. The test of
dependency, according to the High Court, is not merely whether the contributions were necessary to
bare subsistence. Dependency may exist although the dependents could have subsisted without the
assistance he received, if such contributions were relied on by the claimant for his means of living as
determined by his position in life. So, it is immaterial that claimant could have so reduced his living
expenses that he could have been supported independently from the earnings of the employee. One
need not be actually a part of the deceased employee’s household in order to be a dependent. There
may be dependency notwithstanding the fact that the employee did not work steadily or was absent
from the home at the time of his accidental death, and notwithstanding the employee’s unlawful acts or
his statement in his application for employment that he had no dependents.
5. BENEFICIARIES.
a. Beneficiaries, defined. - The term “beneficiaries” means the dependent spouse until
he/she remarries and dependent children who are the primary beneficiaries. In their absence, the
dependent parents and subject to the restrictions imposed on dependent children, the illegitimate
children and legitimate descendants, who are the secondary beneficiaries, provided that the dependent
acknowledged natural child shall be considered as a primary beneficiary when there are no other
dependent children who are qualified and eligible for monthly income benefit.94
b. General classification. - Beneficiaries under the Labor Code may be classified as follows:
1. Primary; or
2. Secondary.95
c. Primary beneficiaries. - The following beneficiaries shall be considered primary:
1. The legitimate spouse living with the employee at the time of the employee’s death until
he/she remarries; and
2. The legitimate, legitimated or legally adopted or acknowledged natural children who are
unmarried, not gainfully employed, not over 21 years of age, or over 21 years of age,
provided that he is incapacitated and incapable of self-support due to a physical or mental
defect which is congenital or acquired during minority. A dependent acknowledged natural
child shall be considered as a primary beneficiary only when there are no other dependent
children who are qualified and eligible for monthly income benefit. If there are two or
more acknowledged natural children, they shall be counted from the youngest and without
substitution, but not exceeding five (5) .96
d. Secondary beneficiaries. - The following beneficiaries shall be considered secondary:
1. The legitimate parents wholly dependent upon the employee for support;
2. The legitimate descendants and illegitimate children who are unmarried, not gainfully
employed and over 21 years of age, or over 21 years of age provided that he is
incapacitated and incapable of self-support due to a physical or mental defect which is
congenital or acquired during minority.97
 e. When to determine beneficiaries. - Beneficiaries shall be determined at the time of the
employee’s death.98
Consequently, although in other jurisdictions, posthumous children who died before the
employee’s death are considered as dependents,99under the laws of the Philippines, they cannot, as a
general rule, be so considered since beneficiaries are determined at the time of the death of the
employee.
However, in Vda. de Makabenta v. Davao Stevedore Terminal Company,100 the daughter
born after the death of the employee and, therefore, a posthumous child, was considered a legal
dependent of the deceased employee.
f. Rule on priority of beneficiaries.
1. Priority of primary beneficiaries; secondary beneficiaries excluded.
Primary beneficiaries have priority claim to death benefits over secondary beneficiaries.
Whenever there are primary beneficiaries, no death benefit should be paid
to secondary beneficiaries.101
2. In the absence of primary beneficiaries, death benefits should be paid to secondary
beneficiaries.
If the deceased employee has no primary beneficiaries at the time of his death, the death
benefits should be paid to his secondarybeneficiaries.102
3. In the absence of both primary and secondary beneficiaries, death benefits shall
accrue to the Employees’ Compensation Fund.
If the deceased employee has no primary or secondary beneficiaries at the time of his death,
the death benefit shall accrue to the Employees’ Compensation Fund.103
g. Benefits payable. - Primary beneficiaries shall be entitled to a monthly income benefit. In
their absence, the secondary beneficiaries shall be entitled to a monthly income benefit not to exceed
sixty (60) months and the death benefit shall not be less than P15,000.00.104
h. Monthly income benefit, how distributed. - The distribution of monthly income benefits
shall be as follows:105
1. Monthly income benefits shall be shared equally by all the primary beneficiaries including
dependent children who were not considered in the determination of dependent pensions.
Upon emancipation or otherwise disqualification to entitlement to the dependent pension
of a dependent child, only ten percent (10%) shall be deducted from the benefits and the
remaining income benefits shall, once again, be divided equally by the
qualified primary beneficiaries.106
2. If there are no primary beneficiaries, the secondary beneficiaries shall also share equally in
the monthly income benefits.107
i. Evidence to prove relationship and dependency. - A marriage certificate issued by the
parish priest who solemnized the marriage between the surviving spouse and the deceased is sufficient
to establish marriage relationship.108
The baptismal certificates and birth certificates of the children are also sufficient evidence to
prove the relationship of the dependents with the deceased. Strict observance of the technical rules of
evidence is not properly demanded in employees’ compensation cases.109

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