Can self-employed Social Security System (SSS) members enjoy the same retirement benefits as members employed by companies?
The good news is, the retirement benefits are not only granted to SSS members who are employed because it is also given to self-employed members. This is according to Republic Act No. 8282 or the Social Security Law of 1997 .
What does it take to be qualified for retirement benefits?
A self-employed will only be qualified for these retirement benefits if they have made a payment of at least one hundred twenty (120) monthly contributions prior to the semester of the member's retirement. The benefits will be enjoyed the moment you reach the age of sixty years and have already ceased being self-employed, or you have reached the age of sixty-five years.
You also have an option to receive your first eighteen monthly pensions in lump sum discounted at preferential rate of interest and this will be determined by the SSS. However if the self-employed member failed to pay the required contributions upon reaching sixty years of age, the lump sum that will be received will be based on the total contributions already paid.
In the event of self-employed member's death, primary beneficiaries will be entitled to receive a monthly pension if the member had already been receiving the retirement benefit. Your secondary beneficiaries will be the ones to receive the lump sum if you pass away within sixty months from the start of your monthly pension, provided you do not have primary beneficiaries.
Additional details about the benefits and contributions of self-employed members are stipulated in Republic Act. No. 8282:
"SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the Commission under such rules and regulations as it may prescribe, including but not limited to the following:
"1. All self-employed professionals;
"2. Partners and single proprietors of businesses;
"3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act;
"4. Professional athletes, coaches, trainers and jockeys; and
"5. Individual farmers and fishermen.
"Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons.
"SEC. 10. Effective Date of Coverage. - Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment: Provided, That the compulsory coverage of the self-employed person shall take effect upon his registration with the SSS.
"SEC. 11. 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.
"SEC. 11-A. 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: Provided, That no retroactive payment of contributions shall be allowed other than as prescribed under Section Twenty-two-A hereof.
"SEC. 12. Monthly Pension. - (a) The monthly pension shall be the highest of the following amounts:
"(1) The sum of the following:
"(i) Three hundred pesos (P300.00; plus
"(ii) Twenty percent (20%) of the average monthly salary credit; plus
"(iii) Two percent (2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; or
"(2) Forth percent (40%) of the average monthly salary credit; or
"(3) One thousand pesos (P1,000.00): Provided, That the monthly pension shall in no case be paid for an aggregate amount of less than sixty (60) months.
"(b) Notwithstanding the preceding paragraph, the minimum pension shall be One thousand two hundred pesos (P1,200.00) for members with at least ten (10) credited years of service and Two thousand four hundred pesos (P2,400.00) for those with twenty (20) credited years of service.
"SEC. 12-A. Dependents' Pension. - Where monthly pension is payable on account of death, permanent total disability or retirement, dependents' pension equivalent to ten percent (10%) of the monthly pension or Two hundred fifty pesos (P250.00), whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding five (5), beginning with the youngest and without substitution: Provided, That where there are legitimate or illegitimate children, the former shall be preferred.
SEC. 12-B. Retirement Benefits. - (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS.
"(b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own.
"(c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act.
"(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his 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 dependents' pension.
"(e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires.
