The lost employees’ compensation program

Ignored and forgotten by legislators, government officials, workers, and its beneficiaries, the Employees’ Compensation Commission is a lost national social insurance institution that is now seldom mentioned despite its growing and very liquid assets of P45 billion.

For instance, the “Batas Kasambahay” of 2013 failed to mention ECC as an institution that should provide benefits to domestic workers unlike the Social Security System, Philippine Health Insurance Corporation and Pag-IBIG which were distinctly specified. Unbothered, ECC officials did not equate this snub as a repeal of the domestic workers’ coverage under its program.

To be entitled to EC benefits, workers while still employed must first become ill or disabled, or must die because of work-connected reasons. Otherwise, their contributions- all paid by the employer—would be lost like an insurance premium for a fire that thankfully did not happen.

Self-employed persons had never been covered under the EC program yet our national health insurance corporation—PhilHealth- never hesitated covering them.

But lately, SSS has adopted the desperate strategy of registering househelpers and drivers as self-employed persons even if they are actually employed by house owners and operators of taxis, jeepneys and tricycles.

SSS does this because it cannot compel compliance from these stubborn employers and for the sake of expediency. This is wrong. Someday, a smart SSS lawyer would simply reverse this action and declare their membership irregular. Their applications for SSS benefits would then be denied as what SSS has done in doubtful registrations.

Didn’t President Abraham Lincoln say that “calling a tail a leg does not make it a leg?”

Moreover, self-employed drivers and domestic helpers are deprived of their employers’ share in SSS, PhilHealth and Pag-IBIG contributions and of their administrative obligations to submit records and remit contributions.

Worse, as self-employed, they remain outside the coverage of the EC program and cannot claim for work-connected benefits. Ironically, their contribution is an affordable P10 per month only.

To the credit of formally-registered companies, employment has become safer and healthier in work premises. ECC has fewer claims to pay now than in the 1970s when it was first established to replace the cumbersome workmen’s compensation benefit plans that were being sold by private insurance companies.

But the present-day irrelevancy of the EC program could be blamed mostly on SSS and the Government Service Insurance System, to which the EC program for private and public sector workers is anchored.

With meager SSS benefits, EC benefits are also meager because they are computed based on the low SSS maximum salary credit. Even if SSS and EC benefits are both paid, they do not amount to anything much.

For instance, a widow may be entitled to her own SSS retirement pension and for the death of her husband to SSS and EC survivor’s pensions. Added together, they usually do not reach P10,000 monthly.

On the other hand, the GSIS law in 1997 innocently integrated EC benefits into its scheme by allowing beneficiaries to receive only one benefit – EC or GSIS – as if double recovery for the same contingency were like getting two insurance proceeds for the same fire.

Beneficiaries always choose the much higher GSIS benefit. Thus, nobody is now claiming under the EC program and the GSIS-administered EC contributions are accumulating practically untouched. The EC benefit program has become a useless social insurance scheme.

Consider the period January to September 2013. GSIS collected P1.6 billion in contributions – at P100 per member monthly – and paid out to 4,092 claimants only P21.7 million in EC benefits. Incredibly, GSIS collected a management fee of P150.4 million for this!

In the same period, SSS collected P1.2 billion in EC contributions, disbursed P690.7 million in benefits, and spent P54.7 million for operations. Even the SSS-administered EC program is obviously overfunded.

Strangely, SSS collects P30 from employed-members for their EC benefits if they earn P15,000 or more monthly, or only P10 if they earn less. Benefits are not based on these contributions, but on their actual SSS salary credits. Thus, two workers could have the same P10 as monthly contributions but end up receiving pensions based on P5,000 or P10,000, if these were their SSS salary credits.

Often challenged on its relevance, the ECC has initiated small improvements in 2013.

ECC started to allow SSS members to receive simultaneously disability benefits and sickness benefits from their employers. It increased funeral benefits from P10,000 to P20,000 and adjusted its pensions by 10 percent.

For GSIS members, ECC has likewise granted carer’s allowance to disability pensioners similar to what SSS members get, and increased funeral benefits from P3,000 to P10,000.

ECC has also asked Congress to allow the double recovery of benefits under the GSIS and EC programs.

Despite these efforts, ECC must do something more drastic to immediately straighten its program. Otherwise, ECC should be first in the list of government corporations for abolition on or before its 40th anniversary year on All Souls’ Day later this year, expectedly uneventful even if it would bring back memories of its creator—former Secretary of Labor and Senator Blas F. Ople. –Horace Templo, Manila Standard Today