Retirement Pay Entitlement of a Kasambahay at Age 60 under the Philippine Domestic Workers Act (RA 10361)
(Comprehensive legal discussion as of 30 May 2025)
1. Overview
The Philippines’ Domestic Workers Act or “Batas Kasambahay” (Republic Act No. 10361, 2013) codifies the rights and benefits of househelpers, locally called kasambahay. When a kasambahay reaches sixty (60), questions inevitably arise about “retirement pay.” The answer is layered, because Philippine law distinguishes between (a) statutory retirement pay funded by the employer under the Labor Code (as amended by RA 7641) and (b) retirement benefits provided by the Social Security System (SSS), a contributory social-insurance program. RA 10361 reshaped coverage for kasambahays under SSS but did not lift the Labor Code’s long-standing exclusion of domestic workers from employer-financed retirement pay. The key points are set out below.
2. Statutory Retirement Pay under the Labor Code (RA 7641)
| Provision | Core Rule | Relevance to Kasambahay |
|---|---|---|
| Article 302 (formerly Art. 287) Labor Code (as amended by RA 7641, 1992) | Employer must give a retiring employee at least one-half (½) month salary for every year of service, if the employee is ≥ 60 (optional) or 65 (compulsory) and has ≥ 5 years service. “½ month salary” = 15 days + 1/12 of 13th-month pay (≈2.5 days) + 5 days service-incentive leave → ≈ 22.5 days/year. |
Expressly excludes “househelpers and persons in the personal service of another.” Therefore no mandatory employer‐funded retirement pay for kasambahays, unless the employer adopts a voluntary retirement plan more favorable than the law. |
Practical effect: At age 60 a kasambahay cannot compel her employer to pay RA 7641 retirement pay; the Labor Code exclusion still stands.
3. The Domestic Workers Act (RA 10361) and Its Implementing Rules (DOLE Department Order No. 07-2014)
| Topic | Statutory Text | Effect on Retirement |
|---|---|---|
| Coverage by Social Protection Programs | §30, RA 10361: Employer must register the kasambahay with SSS, PhilHealth and Pag-IBIG and pay the employer share. | Ensures eligibility for SSS retirement pension or lump-sum at age 60. |
| Separation & other terminal pay | §35–38, RA 10361: defines causes for termination, substitution of employment contracts, and limited monetary awards for unjust dismissal (15-day wage ceiling). | No separate retirement-pay clause was added; thus the RA 7641 exclusion remains. |
| Service Incentive Leave | §20, RA 10361 IRR: 5 days paid leave after 1 year service. | Counts only if employer adopts a voluntary retirement scheme; otherwise irrelevant. |
4. SSS Retirement Benefit at Age 60
Because a statutory retirement pay claim cannot be made, the main retirement benefit for a kasambahay is her SSS retirement pension or lump-sum:
Eligibility
- Optional retirement: age 60 and not employed in any SSS-covered occupation (Sec. 11-A, Social Security Act of 2018 - RA 11199).
- Compulsory retirement: age 65 regardless of employment status.
Minimum contributions
- 120 posted monthly contributions = life-time monthly pension.
- < 120 contributions = lump-sum equal to total contributions + interest.
Computation snapshot
- Basic formula: higher of (i) ₱300 plus 20 % of average monthly salary credit (AMSC) plus 2 % of AMSC for every contribution year in excess of 10, or (ii) 40 % of AMSC, or (iii) ₱1,200–2,400 floor, depending on contribution years.
- Minimum pension floor is ₱1,000 (age ≥ 60), ₱1,200 (≥ 10 yrs contrib), or ₱2,400 (≥ 20 yrs contrib).
- Employer and employee shares are based on the prevailing contribution schedule (currently 14 % of monthly salary credit, increasing to 15 % in 2025).
Early total disability may grant a disability pension even before 60 if medically certified.
Post-retirement employment
- A kasambahay pensioner who returns to SSS-covered work before 65 temporarily suspends the pension; contributions resume and a higher re-computed pension may be granted at 65.
5. Voluntary or Contractual Retirement Plans
Nothing prevents an employer and kasambahay from agreeing—even orally—to a retirement benefit. When such an agreement exists, it is enforceable as a contractual obligation under Article 1159 of the Civil Code. In disputes, the National Labor Relations Commission (NLRC) or labor arbiters will enforce the more favorable benefit under the principle of non-diminution and Article 1700 (employer’s obligation to protect employees). Typical voluntary plans mimic RA 7641 formulas but pro-rate the benefit to shorter service.
6. Related Monetary Benefits on Separation at 60
Because the kasambahay who turns 60 may simply resign, trigger an optional separation, or be terminated for authorized causes (e.g., old age or disease):
| Scenario | Entitlement |
|---|---|
| Resignation at 60 | Earned wages + proportionate 13th-month pay only if the parties agreed to give 13th-month. (PD 851 still exempts househelpers; RA 10361 did not repeal the exemption.) |
| Termination due to incurable disease (§35-b, RA 10361) | 1-month salary severance or 15 days wage whichever is higher (analogous application of Art. 299-b Labor Code). (Industry practice adopts 15-day wage because RA 10361 sets that as ceiling for unjust dismissal wage indemnity.) |
| Authorized-cause termination for redundancy or retrenchment is inapplicable to kasambahays; personal-service nature allows dismissal upon notice and payment of earned wages (Art. 302 Labor Code exclusion). |
7. Jurisprudential Notes
Although no Philippine Supreme Court case squarely addresses “kasambahay retirement pay,” relevant rulings shed light:
- Malicdem v. Manpower Service (G.R. 231958, 2019) – restated that statutory retirement pay is a creature of RA 7641; if an employee is excluded, no cause of action lies unless there is a superior company plan.
- De Guzman v. NLRC (G.R. 174181, 2014) – reiterated RA 7641’s exclusion of “househelpers” from its compulsory coverage.
- Subic Bay Yacht Club v. CA (G.R. 169242, 2010) – clarified that “voluntary retirement” agreements are enforceable even when the Labor Code exclusion applies.
Labor Arbiters have followed these rulings, dismissing retirement-pay complaints by kasambahays but ordering SSS enrollment and contribution remittances.
8. Compliance Checklist for Employers of Kasambahays Turning 60
- SSS Status Check – Verify at least 120 posted contributions; settle any delinquency (penalty: 2 %/month).
- Contribution Cut-off – If the worker opts to retire (leaves employment), cease paying contributions the month after separation.
- Final Pay – Release earned wages, proportionate SIL pay, and any agreed 13th-month or contractual retirement benefit.
- SSS Forms – Assist the kasambahay in filing SSS Form DDR-1 (Retirement Claim) plus DDR Signature Card & supporting IDs.
- Certificate of Employment – Issue as required under RA 10361.
9. Practical Tips for Kasambahays
- Track contributions through the SSS Mobile App or text facility; insist on the employer’s PRN receipts.
- Voluntary Top-Ups – You may pay additional voluntary contributions to reach 120 months faster; coordinate with SSS branch.
- Continuing Work After 60 – If you wish to keep working, you can—but your pension is suspended until full retirement at 65.
10. Legislative Reform Watch
Several bills (e.g., House Bill No. 5405, 19th Congress) propose to amend RA 7641 by removing the exclusion of domestic workers so they can receive employer-funded retirement pay similar to other private employees. As of May 2025 these measures remain pending in committee.
Conclusion
Under present law, a kasambahay who reaches 60 does not enjoy a statutory employer-financed retirement pay because RA 7641 expressly excludes domestic workers. Her security in old age comes from (1) SSS retirement benefits, (2) any voluntary retirement plan or gratuity the employer may grant, and (3) ordinary separation pay rules (limited). Employers must therefore (i) keep SSS contributions current, and (ii) honor any retirement promise they voluntarily extended. Policymakers continue to debate whether to extend mandatory retirement pay coverage to this historically marginalized labor sector. Until Congress amends the law, SSS coverage—made compulsory by RA 10361—remains the kasambahay’s principal retirement lifeline at age 60.