Philippines Launches Social Security Partnership with Denmark

Filipino workers employed in Denmark will be entitled to social security benefits under the same conditions applicable to Danish nationals under the bilateral agreement signed by the two countries, according to the Social Security System (SSS) which led the negotiations for the Philippines.

SSS International Affairs Department Manager Roberto B. Bautista said the agreement, which was ratified last year and already in effect, will benefit Filipino and Danish nationals with current or previous work in the Philippines and Denmark who have been covered by social security legislation in either or both countries.

“The agreement is in line with the International Convention 118 on Equality of Treatment. We want to ensure that the covered Filipino workers will receive social security benefits during times of contingencies, regardless of whether they choose to stay here or in Denmark,” Bautista said.

Among the key features of the agreement is the “totalization” provision which allows the consolidating or adding together of contribution periods – excluding those that overlap – under Philippine and Danish legislation for the benefit of a worker who fails to meet the minimum qualifying period for pension entitlement in either or both countries.

For example, under the Philippine Social Security Law, a member must have at least 120 monthly contributions to qualify for retirement pension. Without the agreement, the member with only 100 monthly contributions will only receive a lump sum amount consisting of total contributions paid plus interest.

“But with the totalization provision of the agreement, if the member has at least 20 monthly contributions or creditable periods under Danish legislation, he or she will qualify for a pro-rated SSS retirement, disability, death or survivorship pension. However, a minimum of 12 monthly contributions is required to apply the totalization provision,” Bautista said.

As for Denmark, for a Filipino worker to be entitled to the country’s social pension under the same conditions as Danish nationals residing there, a total period of work of at least 12 months is required under the country’s legislation.

“The amount of benefit paid by each country will be proportional to the worker’s creditable periods or actual contributions. However, there will be no need to apply the totalization provision if the worker meets the minimum qualifying period or number of contributions needed for pension eligibility under social security legislation in either or both countries,” Bautista explained.

Under the bilateral agreement, the workers’ paid contributions and period of work in both countries will determine the amount and type of their retirement, disability, death or survivorship benefit as provided by applicable social security legislations in the Philippines and Denmark.

The Philippine agencies involved in the agreement’s implementation include the SSS and the Government Service Insurance System (GSIS), while their Danish counterparts are the Pensionsstyrelsen and the Denmark Pension Agency.

Bautista noted that the covered workers can file their claims in any of the designated Philippine and Danish agencies. For example, Filipino workers residing in Denmark no longer need to go to the Philippines to file their SSS or GSIS claim since they can do so in any of the Danish liaison agencies.

Moreover, the bilateral agreement provides for the export of benefits, which means that the eligible workers and beneficiaries will receive their social security claims regardless of whether they decide to reside in the Philippines or Denmark.

“We encourage SSS members to continue paying their SSS contributions even while employed in Denmark. That way, they will be able to meet the required contributions for both countries, which may allow them to receive social security benefits from two pension systems,” said Bautista.

The Philippines also has existing bilateral agreements with Austria, United Kingdom and Northern Ireland, Spain, France, Canada, Quebec, Switzerland and Belgium. Agreements with Germany, Sweden, Luxembourg and Japan have been concluded and signed and are currently undergoing the ratification process as mandated under the constitution.

“As the Philippines is among the top labor-sending countries, the government continues to pursue other agreements with countries that host overseas Filipinos to guarantee that they will be accorded much-needed social security protection,” Bautista said. (SSS)