Section 8June 18, 1954, Sec./Art. 8

Terms Defined. For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings:

(a) SSS The Social Security System created by this Act. (As amended by Sec. 2, P.D. No. 1636, S-1979)

(b) Commission The Social Security Commission as herein created.

(c) Employer Any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government: Provided, That a self-employed professional shall be both employee and employer at the same time. (As amended by Sec. 2, P.D. No. 1636, S-1979)

(d) Employee Any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employer-employee relationship: Provided, That a self-employed professional shall be both employee and employer at the same time. (As amended by Sec. 4, R.A. 2658 and Sec. 2, P.D. No. 1636, S-1979)

(e) Dependent The legitimate, legitimated or legally adopted child who is unmarried, not gainfully employed, and not over twenty-one years of age, or over twenty-one years of age, provided that he is congenitally incapacitated and incapable of self-support, physically or mentally; the legitimate spouse dependent for support upon the employee; and the legitimate parents wholly dependent upon the covered employee for regular support. (As amended by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; and Sec. 5, P.D. No. 735, S-1975)

(f) Compensation All actual remuneration for employment, including the mandated cost of living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that part of the remuneration in excess of three thousand pesos received during the month. (As amended by Sec. 4, R.A. 1792; Sec. 4 R.A. 2658; Sec. 5, P.D. No. 24, S-1972; and Sec. 3, E.O. No. 102, S-1986)

(g) Monthly salary credit The compensation base for contributions and benefits as indicated in the schedule in section eighteen of this Act. (As amended by Sec. 4, R.A. 2658 and Sec. 5 P.D. No. 24, S-1972)

(h) Monthly The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly, daily or weekly basis; if on any other basis, "monthly" shall mean a period of one month.

(i) Contribution The amount paid to the SSS by the employee and by his employer in accordance with section eighteen of this Act. (As amended by Sec. 5, P.D. No. 24, S-1972)

(j) Employment. Any service performed by an employee for his employer, except

1. Agricultural labor when performed by a share or leasehold tenant or worker who is not paid any regular daily wage or base pay and who does not work for an uninterrupted period of at least six months in a year; (As amended by Sec. 4, R.A. 2658)

2. Domestic service in a private home;

3. Employment purely casual and not for the purposes of occupation or business of the employer;

4. Service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of twenty-one years in the employ of his parents;

5. Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines;

6. Service performed in the employ of the Philippine Government or an instrumentality or agency thereof;

7. Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentality: Provided, however, That his 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 this Act 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. (As amended by Sec. 1, R.A.

3839; Sec. 3, RA 4857; and Sec. 5, P.D. No.

735, S-1975)

8. Such other services performed by temporary employees who may be excluded by regulation of the Commission. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors. (As amended by Sec. 5, P.D. No. 735, S-1975)

(k) Beneficiaries The dependent spouse until he remarries and dependent children, who shall be the primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on dependent children, the legitimate descendents and illegitimate children who shall be the secondary beneficiaries. In the absence of any of the foregoing, any other person designated by the covered employee as secondary beneficiary. (As amended by Sec. 4, R.A. 2658; Sec. 3, R.A. 4857; Sec. 1, P.D. No. 177, S-1973; and Sec. 5, P.D. No. 735, S-1975)

(l) Contingency The retirement, death, permanent disability, injury or sickness of the covered employee. (As amended by Sec. 5, P.D. No. 735, S-1975)

(m) Average monthly salary credit The result obtained by dividing the sum of the monthly salary credits in the sixty-month period immediately preceding the semester of contingency by the number of months of coverage in the same period, or the result obtained by dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of calendar months of coverage in the same period, whichever is greater: except where the month of contingency falls within eighteen months from the month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits paid prior to the month of contingency by the total number of calendar months of coverage in the same period: Provided, That the injury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit.

(As amended by Sec. 3, R.A. 4857 and Sec. 5, P.D. No.

735, S-1975)

(n) Average daily salary credit The result obtained by dividing the sum of the six highest monthly salary credits in the twelve-month period immediately preceding the semester of contingency by one hundred eighty. (As amended by Sec. 3, R.A. 4857; Sec. 5, P.D. No. 735, S-1975; and Sec. 3, E.O. No. 102, S-1986)

(o) Semester A period of two consecutive quarters ending in the quarter of contingency. (As amended by Sec. 5, P.D. No. 735, S-1975)

(p) Quarter A period of three consecutive calendar months ending on the last day of March, June, September and December. (As amended by Sec. 3, R.A. 4857)

(q) Replacement ratio The sum of twenty per cent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average monthly salary credit. (As amended by Sec. 2, P.D. No. 1636, S-1979)

(r) Credited years of service For a member covered prior to January 1975, nineteen hundred seventy five minus the calendar year of coverage plus the number of calendar years in which six or more contributions have been paid from January 1975 up to the calendar year containing the semester prior to the contingency. For a member covered in or after January 1975, the number of calendar years in which six or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency. (As amended by Sec. 2, P.D. No. 1636, S-1979)

C. Scope of the System