Section 2Sec./Art. 2

Definition of Terms. Unless the context otherwise indicates, the following terms shall mean:

(a) System - The Government Service Insurance System created and established by Commonwealth Act No. 186;

(b) Board - The Board of Trustees of the Government Service Insurance System;

(c) Employer - The National Government, its political subdivisions, branches, agencies or instrumentalities, corporations owned and/or controlled by the Government, the Philippine Tuberculosis Society, the Philippine National Red Cross and the Philippine Veterans Bank;

(d) Employee - any person in the service of an employer who receives compensation for such service;

(e) Member - any person compulsorily covered by the System under Section 3 of this Act;

(f) Dependent - the legitimate, legitimated, legally adopted, acknowledged natural or illegitimate child who is unmarried, not gainfully employed, and not over twenty-one years of age or is over twenty-one years of age but physically or mentally incapacitated and incapable of self-support; the legitimate spouse dependent for support upon the member, and the legitimate parent/s wholly dependent upon the member for support;

(g) Primary beneficiaries - the dependent spouse until he marries and the dependent children;

(h) Secondary beneficiaries - the dependent parents and legitimate descendants other than dependent children;

(i) Compensation - the basic pay or salary received by an employee, pursuant to his employment/appointment/s, excluding per diems, bonuses, overtime pay, and allowances;

(j) Contribution - the amount payable to the System by the member and the employer in accordance with section five of this act;

(k) Average - monthly compensation the quotient after dividing the aggregate compensations received by the member for the last three years immediately preceding his death/separation/disability/retirement, by the number of months he received said compensation, or three thousand pesos, which ever is smaller;

(l) Revalued average - monthly compensation an amount equal to one hundred seventy percent of the first two hundred pesos of the average monthly compensation plus one hundred percent of the average monthly compensation in excess of two hundred pesos;

(m) Lump sum - the present value of the basic monthly pensions for five years discounted at a rate of interest to be determined by the System but not less than six percent per annum;

(n) Pensioner - any person who receives old-age or disability pension whether in lump sum or otherwise;

(o) Disability - any loss or reduction of earning capacity due to impairment of the normal functions of the physical and/or mental faculties which reduces a member's ability to engage in any gainful occupation;

(p) Total disability - accrues or arises when the loss or reduction of earning capacity amounts to at least seventy-five percent; or when the aggregate loss or reduction or earning capacity resulting from more than one injury and/or disease amounts to at least one hundred percent;

(q) Permanent total disability - accrues or arises when recovery from the impairment mentioned in section 2(o) is medically remote;

(r) Temporary total disability - accrues or arises when the impaired physical and/or mental faculties can be rehabilitated and/or restored to their normal functions;

(s) Permanent partial disability - accrues or arises when the loss reduction of earning capacity amounts to less than seventy-five percent or when the aggregate loss or reduction of earning capacity resulting from more than one injury and/or disease-amounts to less than one hundred percent, as a result of an irrecoverable anatomical loss;

B. COVERAGE OF THE SYSTEM