You are on page 1of 4

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 workers 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 case pronounced 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

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

Endnotes:

1 R.A. No. 7699 is entitled An Act Instituting Limited Portability Scheme in the Social Security Insurance System by
Totalizing the Workers Creditable Services or Contributions in Each of the Systems approved on May 1, 1994.

2 Section 1, R.A. No. 7699.

3 R.A. No. 8282, for SSS members and R.A. No. 8291, for GSIS members.

4 Section 2, R.A. No. 7699; Section 1 [e], Rule III, Rules and Regulations Implementing R.A. No. 7699.

5 Section 2, Ibid. ; Section 1 [b], Rule III, Ibid.

6 Section 1, Rule VII, Rules and Regulations Implementing Republic Act No. 7699.

7 Section 1, Rule I, Ibid.

8 See Section 3 thereof.


9 Section 1, Rule IV, Rules and Regulations Implementing R.A. No. 7699.

10 Section 2, Rule IV, Ibid.

11 Section 4, R.A. No. 7699.

12 Section 2, Republic Act No. 7699; Section 1 [a], Rule III, Rules and Regulations Implementing R.A. No. 7699.

13 Section 1 [f], Rule III, Ibid.

14 Section 1 G], Rule III, Ibid.

15 Section 1 [h], Rule III, Ibid.

16 Section 2, Rule V, Ibid.

17 Section 1 [j], Rule III Ibid.

18 Section 3, Rule V, Ibid.

19 G.R. No. 141707, May 7, 2002.

20 Section 1 [j], Rule III, Ibid.

21 Section 4, Rule V, Ibid.

22 Section 5, Rule V, Ibid.

23 Section 6, Rule V, Ibid.

24 Section 7, Rule V, Ibid.

25 Section 1 [i], Rule III, Ibid.

You might also like