House approves amendments to Social Security Act

MANILA, Philippines - The House of Representatives has approved on third and final reading a bill that amends the Social Security System (SSS) law to allow the pension fund to be more responsive to the financial needs of its members.

House Bill 1161, which seeks to amend Republic Act 8282, otherwise known as the “Social Security Act of 1997,” rationalizes the duties, powers and accountabilities of the Social Security Commission (SSC).

The SSC is the body that directs and controls the state pension fund and is composed of the Secretary of Labor and Employment or his or her duly designated undersecretary, the SSS president, and seven appointive members.

The proposed measure grants the SSC “with powers, duties, and accountabilities to allow it to respond with dispatch to clamors of additional benefits to its members and adjustments to any future fiscal and economic challenges.”

Akbayan party-list Rep. Ibarra Gutierrez III, principal author of the bill, said the measure would be a welcome development for ordinary and privately-employed individual SSS members, who would be able to avail of the privileges enjoyed by members of good standing, which would otherwise not be available under the existing law.

“This measure provides a strong incentive for those that have been in arrears on their principal payments for their employees’ contributions, to immediately settle what is due and overdue because of the possibility of eliminating the huge burden of dealing with delinquency penalties,” Gutierrez said.

The measure amends Section 4 of RA 1161, pertaining to the duties and powers of the SSC and the SSS, so the policy-making body is empowered to condone, enter into a compromise, or release, in whole or in part, penalties imposed upon delinquent social security contributions regardless of the amount involved under such valid terms and conditions it may prescribe when the financial position of the employer demonstrates a clear inability to pay the assessed delinquency.

The SSC shall submit to both the Senate and the House of Representatives an annual report on the exercise of powers under this provision, stating among others the names and addresses of employers whose penalty delinquencies have been the subject of compromise or condonation, amount involved, amount compromised or condoned; and the justifications to determine that said powers are reasonably exercised and the SSS is not unduly deprived of revenues.

The bill also allows the SSC to determine and fix from time to time, through rules and regulations, the minimum and maximum monthly salary credits of member-employees, the schedule and the rate of contributions of employers and member-employees, the rate of penalty on due but unremitted contributions of employers and member-employees and unpaid loan amortizations of member-employees, taking into consideration actuarial calculations, rate of benefits, inflation; and other relevant socio-economic data.